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Em Morley

Major Fine “Should Act as a Lesson to All Landlords”

Published On: February 6, 2018 at 9:51 am

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Categories: Landlord News

After a buy-to-let landlord was fined almost £34,000 for putting his tenants at risk, a councillor has insisted that the case “should act as a lesson to all landlords” in the private rental sector.

Harbhajan Singh Dhami pleaded guilty to a whopping 32 housing offences regarding a House in Multiple Occupation (HMO) that he owned in Merridale Lane, Wolverhampton.

Fire hazards, electrical issues, damp and a pile of waste were among the main issues discovered by inspectors last summer at the property, which had been converted into flats without consent, making it an HMO that should be regulated under current HMO rules.

Be aware that the Housing Minister has confirmed that new HMO licensing rules should be in place in October.

Dhami, of Ednam Road, Wolverhampton, and his company, Dhami Accommodation Ltd, received fines, charges and costs totalling £33,995 at Wolverhampton Magistrates’ Court.

Councillor Peter Bilson, the Deputy Leader and Cabinet Member for City Assets and Housing at Wolverhampton Council, comments on the case: “We are determined to bring to task landlords who are not complying with housing laws and building regulations.

“Our residents’ health and wellbeing is of paramount importance to us, and this case should act as a lesson to all landlords in the private sector.”

He adds: “Thankfully, the majority of landlords in Wolverhampton abide by the rules and regulations, and co-operate with the council.

“The council takes very seriously its commitment to monitoring the private housing sector and we will continue to do so to ensure tenants’ living standards are of the highest quality.”

Landlords, use this case as a warning to stick to your legal responsibilities in protecting your tenants and complying with all regulations that govern the private rental sector.

You can stay up to date with all of your obligations with our helpful, free guides: http://landlordnews.co.uk/guide/

Government to make it Easier to Build Upwards on Existing Homes

Published On: February 6, 2018 at 9:37 am

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Categories: Property News

The Government has announced plans for a consultation that would revise planning policy to make it easier to build upwards on existing homes.

The Secretary of State for Housing, Sajid Javid, said that a consultation draft of the revised National Planning Policy Framework will be published early this year, and will include “building up” policy, alongside others, to make efficient use of land and buildings, and building at higher densities.

Under the changes, it would be easier to build upwards on existing blocks of flats and houses, as well as shops and offices.

An additional two levels could be added to a property, provided it was in keeping with the rooflines of other buildings in the area, Javid explained.

The proposals, he said, will ensure that councils can protect valuable open space in inner city areas, maintain the character of residential areas, safeguard people’s privacy and stop unwanted garden grabbing.

Javid continued: “The answer to building new homes isn’t always an empty plot, or developing on a derelict site. We need to be more creative and make more effective use of the space we already have available.

“That’s why we are looking to strengthen planning rules to encourage developers to be more innovative and look at opportunities to build upwards where possible when delivering the homes the country needs.”

Mark Hayward, the Chief Executive of NAEA Propertymark (the National Association of Estate Agents), comments on the plans: “We fully welcome any move to increase housing stock – the market is in crisis with a severe lack of available properties, which is pushing prices up and pricing first time buyers out of the market.

“The fact that this will enable existing residential areas throughout the UK to expand is especially welcome, as it should increase stock in the areas which most need it, rather than being confined to more expensive urban areas.”

What do you think of the Government’s proposals?

New London Homes to be Offered to UK Buyers First

Published On: February 6, 2018 at 9:03 am

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Categories: Property News

New, affordable homes in London are to be offered exclusively to UK buyers for three months, before they can be marketed overseas, the Mayor of London, Sadiq Khan, has announced.

In his draft London Plan, Khan offers new opportunities when it comes to buying homes, with 65,000 affordable new homes due for completion every year in the capital.

Homes worth up to £350,000 could also be ring-fenced for Londoners for one month when they first go on the market.

When the three months of marketing solely to UK buyers is up, the new builds could then be marketed to overseas investors.

Some developers have voluntarily taken up the offer, after Khan insisted that he would crack down on London homes being marketed extensively overseas, cutting prospective homebuyers out of the equation.

However, UK buyers would still have to be relatively well off, earning around £90,000 per year, even if they are eligible for affordable housing schemes, such as Help to Buy.

Khan said: “Through extensive research I commissioned, I was alarmed to discover that overseas buyers were focusing to such an extent on the lower-cost end of new build homes – many of which were being sold long before Londoners even knew they were available.

“That is why I have been discussing steps with the capital’s leading homebuilders and I welcome their landmark offer to give Londoners first dibs for up to a month on all their new homes under £350,000, with sales ring-fenced to UK buyers for three months before they are marketed overseas.”

He added: “The industry offer is an important breakthrough.”

The following developers have already signed up to Khan’s scheme, in addition to some social housing providers: Bellway, Berkeley, Barratt, Redrow and Taylor Wimpey.

Do you support Khan’s plans to enable more UK buyers to purchase new London homes?

UK Rent Price Growth Halved During 2017, According to The DPS

Published On: February 5, 2018 at 10:24 am

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Categories: Lettings News

Average UK rent price growth halved during 2017 when compared to the previous year, according to the latest Rent Index from The Deposit Protection Service (The DPS).

The report shows that the average monthly rent across the UK rose by just 1.63%, from £761.31 to £773.74 in 2017. This is half the rate recorded during 2016, when the average rent price increased by 3.25%.

The slowdown was particularly pronounced in London, which experienced the lowest increase of any British region, rising by just 0.44% (£5.83), from £1,318.46 per month to £1,324.29.

Julian Foster, the Managing Director of The DPS, comments: “Rent growth was slower in 2017 than 2016 and when compared to inflation and wages, suggesting that general economic uncertainty is affecting the private rental sector particularly.

“London’s growth was particularly sluggish, bringing down the national average further, although rents here and outside the capital remain a large proportion of wages.”

He continues: “The current slowdown in fact began in mid-2016, and is likely to be linked to the EU referendum result; it will be interesting to watch the index as the UK Government’s negotiations with the E27 and other economic influences progress during 2018.”

Excluding London, the average monthly rent in the UK grew faster, by 2.11% (£13.95), from £661.88 to £675.82.

Nevertheless, rent growth outside of London was still significantly slower than in 2016, when the average rent rose by 3.40% (£21.78).

For the first time since 2013, rent growth in 2017 was lower than the rate of inflation (2.70%).

During the past 12 months, incomes grew slightly faster than rent prices. The average rent represented 32.54% of the typical salary, compared to 32.65% in 2016.

Northern Ireland experienced the highest increase in the average monthly rent last year, at 3.66% (£18.76), from £512.74 to £531.74.

In the rest of the UK, the East of England saw the greatest rise in the average rent during 2017, at 3.15% (£24.57), from £782.44 a month to £807.01.

Rents in London represented the highest proportion of wages in 2017, at an average of 43.04%. Meanwhile, outside of the capital, the average rent in the South East represented the highest proportion of a tenant’s salary (35.01%), with the North East being the lowest (25.05%).

Northern Ireland witnessed the largest increase in rent as a proportion of wages during 2017, rising by 0.85%, from 23.88% to 24.73%.

The average rent on a semi-detached house experienced the greatest rise in value of the four property types over the past 12 months, at 2.43% (£18.93), from £780.57 per month to £799.50.

Rent prices for flats witnessed the lowest increase in value of the four property types, at 1.22% (£9.56), from £782.20 to £791.76.

New Landlord Gas Safety Regulations Expected in April

Published On: February 5, 2018 at 9:43 am

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Categories: Law News

For once it seems like the law may be in favour of landlords, as new landlord gas safety regulations are expected to come into force from April.

At present, it is a landlord’s responsibility to ensure that the gas appliances, fittings and flues in their properties are safe and regularly checked by a Gas Safe registered engineer.

The engineer must issue a Gas Safety Certificate confirming that the appliances, fittings and flues have been tested and are safe to use. A copy of this certificate must be given to the tenant.

Subsequently, the landlord must organise an annual gas safety check, with a new certificate issued after each annual visit.

To help you fully understand your duties as a landlord and comply with the regulations, we have created a handy, free guide.

Throughout the private rental sector, concerns have been raised surrounding the timing and validity of Gas Safety Certificates, as it can be challenging to co-ordinate the availability of an engineer with approval of access by the tenant. In addition, landlords often try to keep the appointment as close to the renewal date as possible, to avoid any days where the existing and new certificate overlap.

For example, the existing Gas Safety Certificate is due to expire on 31st March. The only available appointment with the engineer is 17th March. This means that the landlord has lost two weeks of the original certificate.

The new, proposed landlord gas safety regulations do not relax legal requirements or reduce safety standards, but instead introduce a degree of flexibility to the timing of landlords’ annual gas safety checks.

An MOT-style certificate would mean that landlords can arrange the annual gas safety check in the two months before the due date and retain the existing expiry date. So, if the gas safety check is due on 31st March, but is carried out on 17th March, the new certificate will retain the 31st March expiry date and there will be no foreshortening of the inspection period.

This would also make it much simpler to keep track of the renewal date, as it would remain the same.

The planned landlord gas safety regulations would also avoid landlords having to wait until the last minute and not gaining access, or having to shorten the annual cycle to comply with the law.

Subject to Parliament approval, the Gas Safety (Installation and Use) (Amendment) Regulations 2018 will come into force on 6th April 2018.

The current legislation will continue to apply up to and including 5th April 2018.

The Health and Safety Executive (HSE) has published a draft copy of a new, approved code of practice, which you can download here.

Celebrate the Positives in an Uncertain Climate, Urges PRS Expert

Published On: February 5, 2018 at 9:04 am

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Categories: Landlord News

The coming year looks nothing if not challenging for landlords and letting agents, particularly when new regulations, designed to protect tenants, come into force. With Brexit also on the horizon, and the possible economic slowdown that may bring, a certain amount of trepidation is natural. However, we should also remember the innovations transforming the rental market, says Paul Staley, PRS Director at SDL Group.

New rules set out by the Government are a clear indication that there is no longer a place for unscrupulous landlords who fail to maintain their properties and/or charge unfair fees. Even those who have previously benefitted from a few buy-to-lets, or by renting out a second property, may think twice about whether the return on investment is actually worth it.

Having seen their mortgage interest relief cut last year, landlords must now ensure they comply with the Government’s Minimum Energy Efficiency Standards from April. They are also anxiously awaiting approval on the Government’s draft Tenants’ Fees Bill, which could leave landlords and agents seriously out of pocket.

Nobody knows yet what the impact of Brexit will be on the economy in general, and the housing market in particular, though some are understandably concerned. If we are heading for a slowdown, access to mortgages could well be an issue for landlords, as could tenants falling into rental arrears.

All this comes at a time when the Government is continuing its drive for homeownership rather than rental – whether through developer-led house building programmes or incentives like Help to Buy.

While many people hope to own their own home (eventually), it’s not necessarily a top priority. The Build to Rent (B2R) boom means there is more high quality housing available, making renting a more attractive choice for families, professionals in their 30s and 40s, and retirees.

Lifestyle changes have been fuelling this demand, as people seek the flexibility and convenience of a ready-to-move-into house over ongoing property maintenance. This was certainly the case for our 1,000th B2R tenant, who had relocated from London to Greater Manchester. In his mid-30s, he was keen to get to know the local area before committing to buying, while also avoiding the expense and upheaval of home renovation.

Clearly, the most successful property firms are those who are working hard to win over tenants and, in so doing, they are transforming the rental industry.

Institutional landlords usually have the resources to deliver a more professional and valuable service for tenants, including portals allowing them to view contracts and safety certificates or raise an issue.

We’re also seeing a rise in zero deposit schemes, like the one headed up by ex-Zoopla chief Jon Notley, aimed at helping people get into properties quickly. It’s all contributing to the growing professionalism in the sector, which in turn, helps increase demand.

In the coming year, SDL Group has set itself an ambitious target of increasing the number of B2R tenants on our books at a rate of 100 per month. It’s a sign that we, and our investors, are expecting strong growth in the market, even with the anticipated challenges.