Written By Em

Em

Em Morley

Section 21 Ban is “Short-Sighted Move by Government”, Expert Claims

Published On: May 15, 2019 at 9:45 am

Author:

Categories: Law News

Tags:

The Government’s proposed Section 21 ban is a “short-sighted move”, according to Marc Trup, the CEO and Founder of proptech firm Arthur Online.

With so many changes affecting the private rental sector and further proposals outlined by the Government, we decided to interview Marc about the upcoming challenges facing landlords and how they can overcome them.

Read on for his expert opinions…

Q. Is it now easier or more difficult to let properties?

A. I have found no difference in the London area, where I operate my rentals. If the price is right and the property in a good location, property will always get rented. All I can say is prices are at 2008 levels in my area.

Q. Do you think that buy-to-let will remain profitable in the future – why?

A.Difficult question. If you only plan to invest in one or two properties, I’d say no. But, as a business with a growing portfolio, there is still potential to profit from buy-to-let. If you’re in this as a yield play, then it’s a fine line. If you believe in capital growth, then yes, but there may be better places to put your money.

Q. What are your thoughts on the Section 21 ban?

A. I think it is a very short-sighted move by the Government. Landlords are already being bombarded with penalising new legislation and landlords want to feel assured that they can repossess their property, should a tenant refuse to pay rent. The lack of available housing is already becoming a national scandal, so the last thing the private rental sector needs is landlords being forced out of buy-to-let.

Q. How do you think proptech will help landlords to stay compliant ahead of new law changes?

A. Adopting proptech is the first step for landlords to ensure they are offering more transparent and consistent levels of service. Automation offers many new and exciting opportunities in proptech, eliminating any risk of human error. For example, using automated events, you can notify Council Tax and utilities of a new tenant, so that all the tenancy information is kept up to date. You can also set reminders so that you know when to renew your property’s gas safety certificate and, that way, always stay in line with regulation.

Q. How has the rise of proptech changed the property industry?

A. Proptech is all about interconnected solutions, with everything you need all in one place. Property management software on the market currently offers a way to seamlessly integrate core operational systems, allowing better collaboration across teams and departments, enhancing their efficiency and flexibility to meet greater demand. Proptech offers a way to scale business operations, while reducing costs.

Q. What do you think the next year holds for landlords?

A. I think it depends on the uncertainty around Brexit. If we know where it’s going, the property market can prepare for whatever the outcome. I guess we’ll just have to wait and see what the future holds. The outcome of Section 21 is also something to watch out for. I believe that if powers granted to landlords to evict tenants in Section 8 are strengthened, scrapping Section 21 shouldn’t pose too much of a threat to good landlords. However, if the right to sell with vacant possession is not maintained, I fear there may be a substantial number of landlords leaving the sector for good.

Q. If landlords leave the sector as a result of Government intervention, how will the housing market adapt to high tenant demand?

A. Good question. The sector is bringing in build to rent and there is an increasing number of smaller units – Houses in Multiple Occupation (HMOs) – time will tell how these work out. HMOs offer cheaper accommodation but with greater churn, as tenants strive to afford large accommodations. It is certainly an interesting time.

Q. Do you have any advice for those looking to enter the buy-to-let sector?

A. For those looking at entering the sector, my advice would be, be very careful. A lot has changed in the property sector within the last couple of years. Before you invest, I would urge you to get clued up about new rules and regulations around tenants, such changes to HMO licensing, and changes that are coming or are likely to come, so that you aren’t breaking any laws.

Marc Trup is the Founder and CEO of Arthur Online

After selling his business to BUPA in 1998, Marc started investing in rental properties in London. Over the next 15 years, Marc grew his portfolio to over 85 properties. While successful, self-managing his portfolio became increasingly difficult. Following a long search, he found that nothing quite cut the mustard. So, being an entrepreneur, he started Arthur Online to make not only his life easier, but also that of other property managers.

Safety Issues Increasingly Identified by Inventory Clerks

Published On: May 15, 2019 at 9:02 am

Author:

Categories: Lettings News

Tags: ,

The AIIC claims that the recent introduction of the Homes (Fitness for Human Habitation) Act 2018 has led to a rise in compliance and safety issues being picked up by the clerks it works with.

Inventory clerks are increasingly reporting compliance and safety issues within tenanted properties, according to the Association of Independent Inventory Clerks (AIIC).

The organisation fears that independent inventory clerks are identifying and reporting on safety issues that could be criminal offences in private rental housing in the UK.

The AIIC claims that the recent introduction of the Homes (Fitness for Human Habitation) Act 2018 has led to a rise in compliance and safety issues being picked up by the clerks it works with.

Danny Zane, the Chair of the AIIC and Founder of My Property Inventories, is concerned: “The level of mandatory checks has increased greatly over the last decade, from gas safety to smoke detectors being present in the right places and working on the move-in date. For example, when a landlord instructs us to carry out the inventory check-in, they can gain solid proof that the detectors were present, power tested and working on the move in day.

“However, our clerks are finding properties that just do not tick all the required boxes when it comes to habitation and lawful responsibility. Thankfully, landlords and agents are always very grateful that we are on site and able to note issues in order to get them resolved.”

He adds: “Independent property inventory reports are now about much more than the cosmetics of a property; our services are a vital part of the system that keeps tenants and landlords safe and well.”

Landlords, we urge you to identify and rectify any safety issues within your properties, either before new tenants move in, during periodic inspections, or when a tenant alerts you to a problem. 

Meanwhile, if an inventory clerk identifies a compliance issue with your property, then you must work to resolve it immediately. Even if you compile your own inventory, your checks should uncover any safety issues.

The Forgotten Property Hotspots of Prime London

Published On: May 15, 2019 at 8:01 am

Author:

Categories: Property News

Tags:

Buy-to-let landlords looking to buy property in prime London are being urged to consider the forgotten property hotspots that Black Brick describes as “two areas they may have overlooked in the past”.

The buying agency has identified Bermondsey and Fitzrovia as prime London’s forgotten property hotspots.

On the southern side of the River Thames, stretching east from London Bridge, Bermondsey was recently named the capital’s best place to live by The Sunday Times. While buyers can find loft apartments for seven-figure sums, it is also still possible to buy a one or two-bedroom ex-local authority home for around £350,000.

Tom Kain, a Buying Consultant at Black Brick, says: “For investors looking at buying in London, but without the budget for super prime/prime areas, Bermondsey, and the SE1 area in general, presents an opportunity to buy into a very centrally located area with excellent transport links.” 

North of the river, Fitzrovia – bounded by Oxford Street to the south, Tottenham Court Road to the east, Great Portland Street to the west and Euston Road t the north – is one of the similarly forgotten property hotspots.

Historically somewhat drab and dominated by office buildings and the estate of University College Hospital, Fitzrovia is undergoing a wave of development and modernisation that promises significant enhancement, if not outright transformation.

The Crossrail development of Tottenham Court Road station is heralding a smartening up of the east end of Oxford Street and of Tottenham Court Road itself, and developers have been moving in to take advantage.

Camilla Dell, a Managing Partner at Black Brick, comments: “There are a raft of other smaller, more boutique new build developments and redevelopments of previously commercial buildings popping up in Fitzrovia. Combined with significant investment into commercial buildings and infrastructure, we predict the area should outperform other parts of central London over the next few years.”

Are you interested in investing in prime London’s forgotten property hotspots? 

Government Pledges Court Reforms to Support Landlords

Published On: May 14, 2019 at 10:03 am

Author:

Categories: Landlord News

Tags: ,

A Government minister has pledged to reform the court system to speed up landlords’ abilities to repossess their properties in legitimate circumstances.

Writing exclusively for the Residential Landlords Association (RLA), the Minister for Housing and Homelessness, Heather Wheeler MP, says that “landlords who experience the eviction process via the courts” often find it “unduly slow and complex”. 

She pledges: “Changes in the law, the court process and resourcing will need to go hand in glove with tenancy reform, to meet these concerns.”

Wheeler acknowledges that “the vast majority of landlords provide their tenants with a decent home and good quality service” and that “few landlords evict good tenants without a sound reason”.

The Minister confirms that, following the Government’s decision to abolish Section 21, the Government will ensure that the changes work for both good landlords and tenants. She says that she is looking forward to working closely with the RLA, to make sure that the Government’s changes to the sector are put in place properly.

The RLA is currently surveying the landlord community to seek its views on what is required for them to have confidence that they can repossess their properties swiftly and effectively for legitimate reasons.

David Smith, the Policy Director for the RLA, says: “The Minister’s comments are welcome. As the RLA has long argued, landlords are left frustrated at almost every stage where they want to repossess property through the courts. This makes it harder to address the problem of bad tenants, including those committing anti-social behaviour, who cause misery for their neighbours.”

We are pleased to hear confirmation from the Government on ensuring that the new system works for landlords, as well as tenants. We will continue to keep you informed on all updates to the proposed ban on Section 21 notices in the private rental sector.

Letting Agents’ Workload at All-Time High, Warns Management Service

Published On: May 14, 2019 at 9:31 am

Author:

Categories: Lettings News

Tags: ,

A huge spike in the number of tenants, combined with increased Government regulation of the private rental sector, means that letting agents are faced with a higher workload than ever before.

Utility management service Tenant Shop is therefore urging letting agents to consider solutions that can help them to reduce their administrative burden, so that they can continue to offer an effective service to landlords and tenants.

The firm believes that two of the issues agents should consider when reducing workload include notifying local councils and utility companies about tenancy changeovers, and dealing with stray bills.

Letting agents’ workload has been increasing steadily as the private rental sector continues to grow.

The latest English Housing Survey (2017/18) shows that there are approximately 4.5m households renting privately in the country, which is equivalent to 19% of all homes.

The size of the private rental sector has hovered at around a fifth of all households since 2013/14, but has doubled since 2002.

An influx of family renters has also been recorded, with approximately 795,000 households with dependent children entering the private rental sector since 2007/08. The proportion of middle-aged tenants (35-44-year-olds) has also increased, climbing from 13% to 28% during the same period.

Glenn Seddington, the Managing Director of Tenant Shop, says: “Feedback from our agents indicates that this influx of tenants over the last two decades has equated to a significant increase in extra work for letting agents in the form of referencing checks, inventories and drafting tenancy agreements.

Letting Agents’ Workload at All-Time High, Warns Management Service

“As a result, this means more moves in, out and within the private rental sector, which creates more work for agents when it comes to managing utilities in rental properties and helping landlords to deal with void periods.”

Alongside a rise in the number of tenants in recent years, the private rental sector also became more regulated, landlords and agents responsible for carrying out immigration checks on prospective tenants and ensuring that all properties meet new Minimum Energy Efficiency Standards (MEES).

The latest piece of legislation governing the private rental sector is the Tenant Fees Act, which is due for introduction on 1st June 2019. It will ban upfront fees charged to tenants, and cap security and holding deposits.

Tenant Shop believes that, as well as affecting agents’ finances, the tenant fees ban could unwittingly lead to increase pressure on workload.

Seddington explains: “It’s widely expected that there could be a rush of tenant moves immediately after fees are banned, as tenants who have delayed moving home in recent months to avoid paying fees all spring into action at once.

“A flurry of moves over the summer, when considered in the context of an already inflated tenant population and increased administrative burden, could put even more pressure on an already stretched workforce of letting agents.”

As the amount of work that letting agents are required to conduct continues to rise, finding solutions and practices that can help to reduce workload is becoming crucial.

“Difficult market conditions in 2019 mean agents need to use all the available tools that can help to take the pressure of their staff,” says Seddington. “Solutions which save time, automate tasks and simplify processes are invaluable, and can help an agency to deliver the same high levels of service, despite an ever-increasing workload.”

He adds: “And, with measures like the fees ban becoming a reality, the need to increase profitability is greater than ever this year.”

Agents, how will you manage your workload once the fees ban is introduced? 

Rise in the Amount of Over-65s Investing in Buy-to-Let Recorded

Published On: May 14, 2019 at 8:50 am

Author:

Categories: Landlord News

Tags: ,

There has been a notable rise in the amount of over-65s investing in buy-to-let property, according to figures from Commercial Trust.

The mortgage broker has seen borrowers aged between 65-75 increase their share of buy-to-let mortgage applications by 5.43% in 2018, owed in part to the fact that a number of mortgage lenders have recently raised their maximum age at the end of the mortgage term criteria from 75 to 85-years-old, while also pushing up their maximum mortgage terms.

The data from Commercial Trust shows a 4% increase in the proportion of buy-to-let purchases and remortgages from over-55s, who now account for 39% of all buy-to-let mortgage activity.

For purchase-only applications, over-55s were responsible for almost a third (29.7%) of all business in 2018, which is up by 8% year-on-year.

Andrew Turner, the Chief Executive of Commercial Trust, says: “Our look at the age demographics for 2018 buy-to-let mortgage activity suggests that increasing numbers of older people are recognising the potential of buy-to-let investments.

“Our data indicates that many people reaching retirement are choosing to invest in bricks and mortar and the rental market, as a means to fund their retirement years.”

He adds: “Investing in property has the potential to deliver attractive rental yields and achieve capital growth, despite industry changes. I fully expect that the returns fare better than many other forms of investment.”

Are you an older investor who has decided to take the leap into the property market? Let us know what has encouraged you to enter the buy-to-let industry and why you’ve chosen to put money into the private rental sector.

We remind all landlords, whether you’re new to the industry or not, to stay up to date with the latest changes to lettings law, so that you provide safe and comfortable homes for your tenants.