Posts with tag: Buy-to-Let

Rogue landlord fined for HMO failings

Published On: May 31, 2016 at 11:54 am

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A rogue landlord from the Midlands has become the latest to be brought to justice, after being found guilty of a number of failings relating to a HMO.

Birmingham based landlord Salih Mahfood Hassan Mohamed was told to pay £24,158 after being prosecuted at Birmingham City Council.

Fines

The fine received by Mr Mohamed was split as follows:

  • Failure to obtain a HMO licence-£2,000
  • Breaches of HMO Management Regulations-£2,000 per breach
  • Court costs-£2,038
  • Victim surcharge-£120

All charges relate to a rental property in the Sparkhill area of the city. The property had an HMO licence until May 2014, since when it has never been renewed.

Poor living conditions at the address became apparent when Midlands Fire Service referred the property to Birmingham City Council.

Multiple failings

Housing officers subsequently visited the property and found a whole host of failings. These included:

  • fire alarm not working
  • blocked fire escape
  • mouldy shower rooms
  • low windows, which weren’t fitted with safety glass
  • faulty fire doors
  • overgrown and cluttered garden
  • broken front door lock
Rogue landlord fined for HMO failings

Rogue landlord fined for HMO failings

Councillor Peter Griffiths, Birmingham City Council’s cabinet member for Housing and Homes, noted, ‘HMO licensing exist because tenants living in this type of accommodation are almost 17 times more likely to be killed in a fire than an adult living in a similar single-occupancy house.’[1]

‘West Midlands Fire Service raised concerns about this property and our officers found a shocking list of breaches,’ Griffiths continued.[1]

Leave of absence

Mr Griffiths also said that Mohamed left the country for a prolonged period, and instructed his friend to collect rent on his behalf during this time.

Additionally, Griffiths noted that the tenants in the property were subject to appalling conditions, putting their overall safety at risk.

‘The council has over 1,800 licensed properties. Most landlords are responsible and law abiding but the council’s HMO Licensing Team will continue to pursue and prosecute those that aren’t,’ Mr Griffiths pledged.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/5/landlord-hit-with-25k-fine-for-hmo-failings

Buy-to-let landlord numbers continue to rise

Published On: May 31, 2016 at 10:56 am

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New buy-to-let landlords are continuing to invest in the sector, according to new figures released by estate agent ludlowthompson.

Record low interest rates, stock market volatility and more than healthy demand are all contributing in driving new landlords to the sector.

Buy-to-let boom

Ludlowthompson’s data, collated with HM Revenue & Customs, indicates that the number of UK landlords increased by 7% during 2013-14 to hit 1.75m. This was in comparison to 1.63m in 2012-13.

During 2013-14, landlords accumulated £14.2bn in net income from their rental assets, a rise from the £13.1bn in the previous twelve months.

The data provided from HMRC is the most up to date information available on landlord numbers. However, the actual volume is greatly expected to have increased, given the surge in mortgage lending to landlords ahead of the Stamp Duty alterations earlier this year.

Buy-to-let landlord numbers continue to rise

Buy-to-let landlord numbers continue to rise

Undeterred 

Despite the Stamp Duty changes, alongside the reduced tax breaks for buy-to-let landlords coming into force in 2017, early signs are that investors are not being deterred.

A recent report discovered that buy-to-let is performing better than all other asset classes, including UK Government bonds, shares and commercial property.

Stephen Ludlow, chairman of ludlowthompson, observed that buy-to-let returns, ‘routinely outperform those of other investments.’

Mr Ludlow went on to say, ‘investors continue to be drawn to the buy-to-let market as the returns routinely outperform those of other investments. Buy-to-let investments are a highly popular alternative to the volatility investors often risk when investing in the stock market.’

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/5/number-of-uk-landlords-edges-closer-to-two-million

 

Seaside property prices soar in last decade

Published On: May 31, 2016 at 9:41 am

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New research from the Halifax has discovered that British seaside property prices have enjoyed substantial rises during the last decade.

Data from the report shows that prices of towns on the coast have seen a 32% rise during the past ten years. Values have increased from £166,565 in 2006 to £219,386 in 2016. This equates to an average rise of £440 per month.

Seaside property prices soar in Scotland

The analysis indicates that Scottish seaside towns have seen the greatest price growth. Seven of the top ten locations were found to be in Aberdeenshire, with profitable growth in the oil and gas sectors bearing fruit.

Fraserburgh saw the most substantial house price growth, with rises of 139% in the last decade. Prices in the region have grown from £63,540 in 2006 to £151,719 in 2016, equivalent to a monthly rise of £735.

The top five house value increases in Scotland were located in:

  • Fraserburgh-139%
  • Macduff-102%
  • Peterhead-95%
  • Cove Boy-94%
  • Newtonhill-91% 

English increases 

Outside of Scotland, Brighton recorded the largest increase in property price growth in the last decade, with 59%. Prices here have risen from £214,863 to £341,235 over the decade.

The top five house price increases in England were found to be in:

  • Brighton-59%
  • Whitstable-53%
  • Shoreham on Sea-53%
  • Leigh on Sea-52%
  • Truro-50% 
Seaside property prices soar in last decade

Seaside property prices soar in last decade

Expensive England  

Despite the substantial growth seen in property prices in Scotland during the past decade, nine of the most expensive seaside locations in Britain are located in England. Of these, eight are located in the South West. Sandbanks in Poole tops the list, where average house prices stand at £664,655.

The top five most expensive seaside towns were located in:

  • Sandbanks-£664,655
  • Padstow-£443,396
  • Aldeburgh-£439,379
  • Lymington-£426,112
  • Dartmouth-£401,361

Seaside soars

Martin Ellis, housing economist at the Halifax, said, ‘seaside towns are highly popular places to live, offering sough-after scenery, weather and lifestyle which no doubt come at a price. They also attract those looking for holiday properties, which add upward pressure on house prices, which our research shows have increased by an average of £440 per month since 2006.’[1]

‘Over the 10-year period, coastal towns north of the border have been the strongest performing in terms of house price rises, but locations in the South West remain the most expensive. So if you’re looking for a bargain, it’s still easier to find the further North you go, where average price in several areas is still below £100,000,’ he added.[1]

 

[1] http://www.propertyreporter.co.uk/property/oh-i-do-like-to-live-beside-the-seaside.html

 

 

 

Rents rise by 2.6% in year to April

Published On: May 27, 2016 at 10:57 am

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Rents paid by private sector tenants in Britain rose by 2.6% in the year to April 2016, according to data released by the Office of National Statistics.

This was unchanged when compared to year-on-year results to March.

Rental rises

Since January 2011, rental prices in England have risen more than those in Wales and Scotland. This particular trend continued into the last month, with data from the private housing rental index from the ONS showing that rents rose by:

  • 8% in England
  • 2% in Wales
  • 5% in Scotland

In the year to March, rental prices rose in all regions of England. Unsurprisingly, London saw the greatest increase, of 3.7%.

As a whole, rental prices in England can be grouped in three periods. Prices increased markedly from January 2005 until February 2009, then dipped between July 2009 and February 2010. Since then, prices have spiralled.

Taking London out of the results, rental prices in England have followed a similar pattern, albeit with reduced rental rises from the end of 2010.

Rents rise by 2.6% in year to April

Rents rise by 2.6% in year to April

Regional growth

Year-on-year to April 2016, private rental prices have increased in all nine regions of England. London led the way, followed by the East and South East, with rises of 3% and 2.9% respectively. However, annual price rises have been greater in London than the rest of England since November 2010.

On the other hand, the North East, North West and Yorkshire and the Humber have continued to record the smallest annual rent rises.

Paul Smith, CEO of haart estate agents, believes rental accommodation will soon decline, as investors withdraw from the market in the wake of tax changes implemented by the Chancellor. He fears that this could lead to upward pressure on rental prices in the future.

Affordability issues

Smith said: ‘today’s data shows UK private housing rental prices increased 2.6% on the year as affordability issues in the sales market push up demand and therefore prices in the rental sector.’[1]

‘While the number of properties available to rent surged following a rush from buy-to-let investors in advance of the stamp duty changes on the 1st April, we are now seeing a decline in stock as investors withdraw from the market,’ Smith continued.[1]

Concluding, Mr Smith said, ‘ironicallym the government’s efforts to help first-time buyers by penalising investors, could end up hindering them as a shortage of rental properties will drive up rents in the long term, making it more difficult to save up for a deposit.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/5/uk-private-sector-rents-up-2-6-year-on-year

Housing demand falls during April

Published On: May 26, 2016 at 10:47 am

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New research from the National Association of Estate Agents has discovered that estate agents reported a substantial drop in housing demand during April.

The number of house-hunters registered per member branch actually fell to the lowest levels seen by the firm since March 2014.

Housing demand drop

According to the report, 325 would-be homeowners were registered per member branch during April. Demand has dropped by 22% in comparison to March, where 417 members were registered.

In addition, the supply of houses available for potential buyers also fell significantly, by 35%. This was a fall of 54 properties available to just 35.

Of the total number of sales made in April, 26% were made to first-time buyers, a fall of 2% from March. This said, 33% of estate agents expect sales to this group to rise in the wake of the stamp duty changes affecting the buy-to-let market. In turn, less buy-to-let landlords are thought to have interest, freeing up properties for first-time purchasers.

Housing demand falls during April

Housing demand falls during April

Brexit fears

24% of estate agents said that they expect property prices to fall, with 23% expecting demand to decrease should Britain vote to leave the European Union.

Mark Hayward, managing director of the National Association of Estate Agents, noted, ‘it’s no surprise that demand dropped significantly in April. 80% of agents saw an increase in purchasers trying to beat the buy-to-let stamp duty changes before the April 1st deadline, so we expected to see a slow-down immediately following the deadline. Whilst the number of house-hunters registered per branch dropped in April, the supply of available housing to buy also fell quite sharply, so supply and demand are still moving in the opposite direction, rather than balancing out.’[1]

‘Additionally, the upcoming EU Referendum means we’ve entered a period of uncertainty, as buyers put off their hunt in anticipation of the result and what might happen to prices as a result,’ Mr Hayward added.[1]

[1] http://www.propertyreporter.co.uk/property/house-hunters-at-lowest-levels-for-2-years.html

Landlords seeing more dirty properties at checkout

Published On: May 25, 2016 at 10:45 am

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A concerning new report has revealed that buy-to-let landlords are facing increasing problems with dirty properties at the conclusion of tenancy agreements.

The investigation, conducted by online letting agent PropertyLetByUs, has uncovered the items most frequently left in a poor condition by outgoing tenants.

Dirty properties

Mucky ovens were discovered to be extremely common, with 56% of agents reporting that they had faced this issue. Next came dirty carpets and flooring (25%), grimy showers (21%), smelly sinks (19%), full fridges and freezers (18%) and grubby baths (14%).

Shockingly, 70% of landlords said that their rental properties were returned to them in a poor condition after their tenants had moved out.

Over half of cases dealt with by the Tenancy Deposit Scheme are associated with cleaning. In fact, disputes over cleaning are now at their greatest level since the beginning of the scheme. This in turn means many investors are claiming more on their landlord insurance.

Lack of respect

PropertyLetByUs.com suggests that tenants have little or no respect for their rental home.

Jane Morris, the firm’s managing director, said: ‘unfortunately tenants fail to treat a rented property like they would if it was their own home. Many tenants fail to leave their property in the same condition as when they moved into the property and we have seen many properties left in a filthy state.’[1]

‘The main problems are dirty ovens and fridges; stains and marks on carpeting and flooring; bathrooms which have not been cleaned for months; and pet hair and excrement on floors, furniture and soft furnishings. At a recent check out, the property was left in a very poor condition. No cleaning had taken place during the tenancy and the ovens, carpets and the bathrooms were filthy. Unwanted furniture was the left in the house and strewn across the garden,’ she continued.[1]

Landlords seeing more dirty properties at checkout

Landlords seeing more dirty properties at checkout

Costly

Morris went on to claim that, ‘some tenants claim that cleaning issues are just normal wear and tear and are shocked when they find out that it will cost around £50-£70 to have the oven professionally cleaned and anything between £100-£150 to clean carpets and floorcoverings. The simple answer is that if an area or item was clean at check-in it should be left clean at check-out. If any dust or crumbs are present then this is clearly not clean.’[1]

‘It’s vital that landlords carry out mid-term inspections so they can flag up any cleaning issues, as well as a thorough check-in and check-out, so they have the right proof of condition at the start and end of a new tenancy agreement. At the check-out, the tenants should be made aware of the areas requiring cleaning and the potential costs involved,’ Morris concluded.[1]

Importance of inventories

The rise in landlords being left with dirty properties come check-out time underlines the importance of inventories. Landlords must produce a detailed inventory at the beginning of all new tenancy agreements, with photographs of all rooms in the house.

This will not only let landlords cross-examine during regular inspections, but will also be imperative should any dispute occur. Buy-to-let landlords should ensure that their tenants are given a copy of an inventory, which they have signed, before entering into an agreement.

[1] http://www.propertyreporter.co.uk/landlords/landlords-face-big-clean-up-at-check-out.html