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Nottingham landlord licensing scheme a farce, says RLA

Published On: November 21, 2019 at 9:43 am

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Nottingham landlord licensing scheme

Fewer than 3% of full licences applied for in Nottingham as part of a landlord licensing scheme have so far been issued.

It was in August 2018 that Nottingham City Council introduced a Selective Licensing Scheme across many parts of the city. This was a key part of its efforts to address the quality and management of private rented housing.

However, the figures provided to the Council’s Overview and Scrutiny Committee show that it has not worked according to plan. By August 2019, whilst 17,523 applications for a licence had been received, only 472 final licences were issued. The Council has estimated that a total of 24,000 applications are eventually likely to be received.

The Residential Landlords Association (RLA) is branding the painfully slow progress in processing applications a farce and has called on the Council to scrap this pointless scheme.

The RLA has highlighted that the issuing of a licence is not linked to any form of property inspection by the Council. Tenants cannot be sure that such a licence will actually mean landlords will meet all the required standards.

In addition, because there is no way of checking whether or not a licence application has been made, tenants cannot tell if their landlord has applied and is simply waiting for the Council to process the application or is flouting the law altogether.

The RLA is calling for all forms of landlord licensing schemes to be scrapped as part of the General Election campaign. Instead, it is calling for councils to use the wide array of data they can already access such as from council tax returns, benefit and electoral roll data and information from the Land Registry to identify landlords.

It is further calling on councils such as Nottingham to spend more time and resources finding and rooting out criminal landlords rather than wasting resources tying good landlords up in bureaucratic knots.

David Smith, Policy Director for the RLA, said: “Nottingham Council cannot have it both ways. Either it believes landlord licences are important, in which case they should process applications promptly, or they do not, in which case they should scrap what amounts to a money-making scheme.

“The reality is that the Council is targeting responsible landlords whilst doing nothing to find and root out bad landlords who will have no intention of applying for a licence. This is purely a money-making bureaucratic exercise which will not benefit tenants in any way.”

UK Finance lending trends show steady month for mortgages

Published On: November 20, 2019 at 10:35 am

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steady month for mortgages

UK Finance has released the latest lending trends data for September 2019, revealing strong mortgage figures. The report highlights:

  • There were 29,100 new first-time buyer mortgages completed in September 2019, 1.6% more than in the same month in 2018. There were 29,050 homemover mortgages completed in September 2019, 1.8%more than in the same month a year earlier.
  • There were 17,740 new remortgages with additional borrowing in September 2019, 5.9% more than in the same month in 2018. For these remortgages, the average additional amount borrowed in September was £50,000. There were 19,140 new pound-for-pound remortgages (with no additional borrowing) in September 2019, 8% more than in September 2018.
  • There were 5,500 new buy-to-let home purchase mortgages completed in September 2019, 3.5% fewer than this time last year. There were 12,900 remortgages in the buy-to-let sector, the same amount as in September 2018.

Conor Murphy, CEO of end-to-end mortgage platform Smartr365, comments on UK Finance’s mortgage lending trends statistics: “Strong mortgage figures are mainly down to the remortgage market, with competition between lenders aiming to attract as much business as possible underpinning performance. For brokers, where there is competition there is also opportunity.

“As borrowers remortgage to take advantage of the lowest rates the industry has seen in years, most will be looking for advice to help them find the best deal. Brokers need to be available to handle both new business and existing clients, and they can only do so if they’re efficient with their time. 

“Technology which removes manual tasks and the burden of admin is essential, and using it or not could make the difference between a healthy pre-Christmas bonus and a gloomy December.”

steady month for mortgages
UK Finance lending trends show steady month for mortgages

Nick Chadbourne, CEO of conveyancing solutions provider LMS, comments: “Overall remortgage activity is steady, with a slight bounce due to a peak in ERC expiries, but we are starting to see a shift in the balance of power within this market.

“Lower rates on 2-year deals have sparked competition between lenders, aiming to turn the heads of remortgagers, and borrowers have been taking advantage. 

“Recent LMS data shows that although 5-year fixes remain the most popular product, purchases of 2-year deals have surged and closed the gap to just a few%. It’s tough to call whether this will continue as we move into the new year, but with low rates and slow price growth set to stay, we can be sure that the remortgage market is in good health.”

Shaun Church, Director at Private Finance comments: “The remortgage market continues to boom, as homeowners capitalise on the current price war between lenders.

“With mortgage rates hovering near record lows, borrowers coming up to the end of their terms should make the most of this opportunity and lock into the ultra-competitive rates of today well into the future through a five, 10 or perhaps even 15-year fix.

“The current rate war means there’s plenty of choice for borrowers looking to secure an affordable deal. However, cost-conscious mortgage customers should remember to look beyond the headline rate and take all fees and charges into consideration.

“Enlisting the advice of an independent mortgage broker can enable borrowers to secure the most suitable and affordable deal.”

Mark Gordon, Director of Money and Mortgages at Comparethemarket.com: “Remortgage activity has picked up again, with additional borrowing increasing by nearly 6% year on year. Providers are competing amongst themselves, slashing rates to attract new customers.

“Some of the most significant rate cuts are on five and ten-year deals, with homeowners increasingly opting for the longer-term options. With rates so low, borrowers coming up to re-mortgaging could end up overpaying if they don’t search out a cheaper deal.

“FCA research shows over 800,000 UK homeowners are on a standard variable rate mortgage, which usually has an interest rate of around 4.5%. Comparing the different deals out there could save thousands of pounds, the equivalent of a pay rise, holiday or home improvements.

“Regardless of whether you are a first-time buyer or homeowner, shopping around online can help you find the best mortgage deal.”

Will unfair evictions in the private rental sector be reduced by next government?

Published On: November 20, 2019 at 9:47 am

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unfair evictions

We could see homelessness cases reduced by 10% with our next government, according to an analysis by Generation Rent.

By protecting tenants from unfair evictions, this could make a substantial difference to homelessness in the UK.

The findings, based on Ministry of Housing data, also reveal that Boris Johnson and Shadow Chancellor John McDonnell are among the MPs whose constituents face the highest risk of being made homeless by an arbitrary eviction.

Election battleground areas, such as Corby, Milton Keynes, Enfield, and Crawley, are among the worst-affected by homelessness caused by Section 21 evictions.

Tenants in the London Borough of Havering were most at risk of their landlord selling up or reletting, with 39 in every 1000 private renter households being owed a homelessness duty by the council for these reasons in 2018-19. Corby had the second highest rate, with 25 renters in every 1000 facing homelessness.

Tenants in the Prime Minister’s local authority, Hillingdon, were the 6th most at risk of losing their home on no-fault grounds, with 20 in every 1000 private renter households owed a homelessness duty. Shadow Chancellor John McDonnell represents the borough’s other constituency, Hayes & Harlington.

CouncilSize of private renter population (households, 2011)Number of homelessness cases following no-fault evictionNo-fault eviction homelessness rate per 1000 renter householdsKey seats, incumbent party (2017), majority
Corby3,8399525Corby, Conservative, 2,690
Barking & Dagenham12,32829224Dagenham, Labour, 4,652
Crawley6,21413622Crawley, Conservative, 2,457
Hillingdon18,14136920Uxbridge and South Ruislip, Conservative, 5,034Hayes and Harlington, Labour, 18,115
Enfield26,59148418Enfield North, Labour (Change MP Joan Ryan stepping down), 10,247Enfield Southgate, Labour, 4,355
Milton Keynes17,06626816Milton Keynes North, Conservative, 1,975Milton Keynes South, Conservative, 1,725
unfair evictions

The Ministry of Housing, Communities and Local Government has released figures showing that of the 263,720 households that faced homelessness in 2018-2019, just over 10% were being evicted because their landlord was selling up, reletting the property or responding to a complaint by the tenant about disrepair.

Section 21 of the Housing Act 1988 is what makes these ‘no fault’ evictions possible. It allows landlords to take back properties without needing a reason.

The May government pledged to abolish Section 21 and a consultation on the details ended on 12th October. Labour and the Liberal Democrats also support the policy.

Further to this, 5.7% if homelessness cases were the result of rent arrears. Changes to housing benefit in recent years have made it harder for recipients to pay the rent.

A freeze of Local Housing Allowance (LHA) means that tenants can’t cover rent rises and the five-week wait to receive Universal Credit means tenants can easily get behind on their rent payments.

One in four private renters receives housing benefit, but the Bureau of Investigative Journalism has found that just one in 20 private rented homes is affordable to someone receiving housing benefit.

Government action could help tenants in all these situations. Alongside ACORN, London Renters Union, New Economics Foundation, Renters Rights London and Tenants Union UK, Generation Rent has published a Renter Manifesto to encourage parties to adopt policies to improve life for private renters. The policies include:

  • A commitment to end Section 21 evictions and require landlords who evict to sell to pay their tenant’s costs of moving home;
  • Changes to the benefits system so that recipients are able to keep a roof over their head, including linking local housing allowance to 30% of local rents and ending the delay for receiving Universal Credit; and
  • Legally binding guidance on the Equality Act that prohibits discrimination against people receiving benefits.

Dan Wilson Craw, Director of Generation Rent, said: “For private renters, the most common reason for becoming homeless is that your landlord wants to sell or simply re-let the property.

“Landlords don’t have to prove grounds or help you move – it’s left to tenants themselves and councils to cover the costs. In this way, the law prioritises the pursuit of profit over the need for a home.

“The next government would dramatically reduce homelessness by abolishing Section 21 evictions, making landlords foot the tenant’s bill if they want to sell, and making it easier for renters receiving benefits to pay market rents.”

Buy-to-Let is STILL one of the best investments you can make

Published On: November 19, 2019 at 9:58 am

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Categories: Landlord News

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Independent landlords 'vital' to a fair rental market housing secretary tells NRLA

Buy-to-let continues to deliver solid returns that beat many other types of investment. Even with reduced tax breaks, and the addition of new legislation, the market appears to be very profitable. Many investors are seeking to add to their portfolio in the near future.

Property investment is a buyer’s market right now, with the average price of property coming onto the market dropping by 1.3%, or £3,904 over the last month. This fall can be attributed to political uncertainty stemming from Brexit and the upcoming general election.

Unfortunately for sellers, this uncertainty has led to many of them abandoning plans to sell into a more certain time. 

However, investors looking for a bargain are able to get more bang for their buck. Prospective landlords can use the savings on buying cheaper property to mitigate the effects of Section 24 tax changes and other increased costs around letting that have cropped up in the last year. 

Miles Shipside, Rightmove director and housing market analyst, commented: “I’ve seen lots of unusual events affecting the property market in my 40-year career, but a Brexit deadline followed by a snap general election six weeks later is obviously a new combination for me and for many thousands of buyers and sellers. 

“Elections normally dampen activity as uncertainty causes a degree of hesitation, but this one is being called to try to break the deadlock after three years of uncertainty. A more certain outlook, whatever it may be, would be a welcome change for those who are contemplating moving.”

The uncertainty seems to be a positive for buyers, which may explain why the number of sales agreed remains largely unchanged, at only 2.9% lower than this time last year. This suggests that there are still a lot of buyers looking to take advantage of those opportunities.

Rightmove has ‘failed miserably’ to see estate agents’ point of view

Published On: November 18, 2019 at 10:18 am

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Rightmove has ‘failed miserably’

A new video interview with estate agent Simon Shinerock has been released, in which he claims Rightmove has ‘failed miserably’ to show empathy for estate agents and see things from their point of view.

This statement comes on the back of reports that multiple members of the Federation of Independent Agents are considering cancelling their Rightmove subscriptions due to fee increases.

Simon Shinerock is the Chairman of Choices Estate Agents. The interview was conducted by industry commentator Christopher Watkin and focuses on Rightmove’s relationship with the estate agency industry.

‘A lack of empathy for the industry’

Shinerock states that Rightmove has failed to see estate agents’ point of view in a number of ways. The example of his own website is used in his interview with Watkin.

“I have a website, I want to promote my website, they do everything possible to stop the traffic going from Rightmove to my website,” he says.

“Why can’t they offer me an open market search on my website? Why can’t they develop my business?”

‘Market leader that has brought little creativity to property’

Shinerock also criticises the property portal for its lack of creativity. He highlights that Rightmove’s offering has not changed much at all since it launched, but now agents are charged a huge amount more for the same product.

He describes Rightmove’s proposition as ‘purely passive’.

“How come Rightmove – the so-called leader in the portal business – has done nothing on social media? You could almost say they are anti-social media,” Shinerock argues.

“As a company, they are holding the industry back to some degree because of their dominant position.”

Agents should be suspicious of Rightmove

When discussing the portal’s relationship with the estate agency industry, Shinerock tells Watkin that agents are right to be suspicious.

“Right from the beginning when Rightmove was free, I was super suspicious of them. That suspicion has carried on entirely through our relationship with Rightmove,” he says.

He also voices his worries about the portal’s plan for an instant transaction function on its commercial platform. He believes that if Rightmove puts an instant transaction function on its residential platform, it could decide to disintermediate agents.

Watkin suggests this could see Rightmove becoming the estate agents themselves, even though they have promised they’d never do that.

The full video can be viewed here.

Number of additional homes reaches record high, but still behind Government targets

Published On: November 18, 2019 at 9:23 am

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Number of additional homes reaches record high

The Ministry of Housing, Communities & Local Government (MHCLG) has now released its report ‘Housing supply; net additional dwellings, England: 2018-2019′.

The report highlights:

  • The annual housing supply in England amounted to 241,130 net additional dwellings in 2018 to 2019. This is up 9% on the 2017 to 2018 report.
  • The 241,130 net additions in 2018 to 2019 resulted from 213,660 new build homes, 29,260 gains from change of use between non-domestic and residential, 5,220 from conversions between houses and flats and 940 other gains (caravans, houseboats, etc.), offset by 7,940 demolitions.
  • 14,107 of the net additions from change of use were through ‘permitted development rights’ (full planning permission not required). These were made up of 12,032 additional dwellings from former offices, 883 from agricultural buildings, 199 from storage buildings, 69 from light industrial buildings and 924 from other non-domestic buildings. 

Chris Sykes, Mortgage Consultant at Private Finance, has commented: “The number of additional homes created each year has reached a new high, outstripping the previous peak seen in 2007-08 before the full effects of the financial crisis hit the market. 

“Insufficient supply has been a longstanding issue for the UK’s property market, pushing up prices and slowing down movement at all levels of the housing chain. Any boost in supply will, therefore, be welcomed by homebuyers, who are already experiencing more favourable conditions thanks to a slowdown in price growth and record low mortgage rates.

“There is still some way to go if the Government is to reach its target of 300,000 new homes a year by the mid-2020s, with more than 86,000 homes still needing to be built based on this year’s figures.

“Whatever the outcome of December’s general election, the next government must ensure reaching this target remains a key priority if affordability is to continue improving for homebuyers.”