Weekly landlord news digest: Issue 18

Do you need help keeping up with the fast moving property industry? Hamilton Fraser’s weekly landlord news digest aims to bring important industry news to busy landlords!

In this week’s edition, we explore letting agent concerns as landlords ‘quit buy to let’ and we highlight the government’s commitment to speed up cladding replacement. We also take a look at the impact of property damage on landlords’ mental health and investigate whether evictions are on a downward trend.

 

Government committed to speeding up cladding replacement

The government have announced their plans to speed up the replacement of insufficient cladding. Freeholders were long concerned that they would be responsible for covering the full costs of the replacements, which would then be passed onto leaseholders.

Around £200 million has been allocated to replace dangerous cladding on high-rise private residential properties. Communities Secretary the Rt Hon James Brokenshire MP has called time on “reckless” building owners who have not yet taken action to replace unsafe cladding, putting many people at risk.

“Although temporary measures are in place to ensure people living in these buildings are safe, too many owners are treating this as a permanent fix. Others are trying to pass on the costs to residents by threatening them with bills running to thousands of pounds. While some building owners have been swift to act, and I thank them for doing the right thing, I am now calling time on the delay tactics of others. If these reckless building owners won’t act, the government will”.

– James Brokenshire MP

Read more about cladding replacement plans.

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Letting agents concerned as landlords quit buy to let

The future of buy to let could be hanging in the balance as tenant demand rises but fewer landlords are renting out homes.

The number of new landlord instructions is at the lowest level since the summer of 2016 and looks likely to continue to dwindle, says the Royal Institution of Chartered Surveyors (RICS).

RICS letting agents say this is already the longest uninterrupted sequence of falling landlord instructions since the series started in 1998.

The report also suggests the abolition of no-fault (Section 21) evictions may see even more landlords leave the market, especially as rents look set to rise 2 per cent over the coming year and by an average of 3 per cent a year over the next five years.

“While an efficiently functioning sector should give security to tenants that they can’t be evicted on a whim, it should also allow for landlords to easily evict troublesome tenants.” Tamara Hooper, policy manager at RICS said.

“To encourage an efficient and balanced private rented sector, better standards and regulation need to be embedded into the industry, to give the security and conditions needed by tenants and to provide the clarity of good performance for landlords and agents. RICS does not believe that the announcements made by Government around Section 21 will help bring about the changes within the industry that the Government hopes”

– Tamara Hooper, policy manager at RICS

 

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Mental health awareness week – How does property damage impact on landlords’ mental health?

Research conducted by the National Landlords Association (NLA) into landlords’ mental health found that the stress caused by property damage affected 32 per cent of landlords* surveyed in the last year.

This being Mental Health Awareness week (13-19 May), we investigate the symptoms of property stress experienced by landlords, where landlords can find support, and how landlords can protect their mental health in our latest blog ‘How does property damage impact on landlords’ mental health?’

 

Over 55s invest in property pensions

Greater numbers of over 55s are looking to buy to let for a pension, according to figures from a mortgage broker.

The over 55s were involved in 28 per cent of all new buy to let mortgage business last year – an annual increase of 8 per cent.

“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 to fund their retirement years.”

– Andrew Turner, chief executive at broker Commercial Trust

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Private rents rise as fee ban looms

“Whilst the aim of the Tenant Fees Act is to reduce the costs that tenants can face, landlords still need to cover the costs that are incurred when setting up a tenancy. With landlords already feeling the impact of taxation changes, the expectation is that costs will be passed back to tenants through higher rents, particularly for new tenancies.”

Chief executive Martin Totty 

Private rents are rising at the fastest rate for two years in a bid to beat the ban on charging renters fees to start or renew tenancies. The ban comes into force on 1 June in England.

In the past 12 months, they have surged by 3.3 per cent, says buy to let rent monitor Homelet.

The average monthly rent across the UK is now £936  – and has reached £1,617 a month in London.

Chief executive Martin Totty said: “With the Tenant Fees Act due to take effect in England from 1 June, the acceleration we’re seeing in agreed rental values will come as no surprise to anyone. Landlords’ ability to increase rents will largely be determined by local market dynamics of supply and demand for property.”