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Estate Agents & Letting Agents in Leeds

Here you will find the latest Hudson Moody Wass and property news.

Landlord launches legal fight against council licensing

A landlord has launched a legal challenge against a compulsory licensing scheme being introduced in a London borough - a move which could have implications for similar local authority proposals across the country. Constantinos Regas, a landlord in Enfield, north London, has started proceedings for a judicial review of the decision by Enfield Council’s cabinet to introduce the scheme for all private landlords. As with many other councils, Enfield’s proposals involves charging £500 for a five year licence for every property that is privately let. Landlords must provide evidence that appropriate health and safety laws are met, and that procedures are in place to counteract anti-social behaviour - the justification invoked by the council for introducing the licensing scheme. The council in Enfield has already been challenged by a group of landlords who gathered 1,850 signatures on a petition opposing the scheme. However, the scheme was approved by the appropriate committees and cabinet of the council. Regas, who lets out only one property, is quoted in his local newspaper as saying that: “Like anyone applying for a judicial review, I am taking legal action as a last resort. My concerns have been ignored and the council has been uncooperative in providing information. “I’ve repeatedly stated that I consider good housing conditions a human right. But the idea that a majority of tenants are neighbours from hell or that most landlords are greedy people who rent out ‘beds in sheds’ is not supported by data” he says.
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Anger as Green Deal cut hits landlords

There has been an angry response to news that the sums available to landlords under the government’s Green Deal has been cut back, with immediate effect. From today, July 25, the most that landlords can claim overall has been cut to £5,600 from £7,600 - and the reason is that the scheme has been too popular. The biggest detailed reduction is for funding for outer wall insulation. Until now landlords could claim up to £6,000 for installing solid wall insulation but that figure has been brought down to £4,000. And landlords should act quickly if they want financial assistance with flue gas heat recovery units - they will be removed entirely from approved measures that are eligible for support from August 5. The Residential Landlords’ Association says the Green Deal home Improvement Fund recently reached the milestone of £50m in vouchers to home owners looking to improve their properties - possibly the reason why the Department of Energy and Climate Change has cut the funding. “The RLA still recommends landlords to become involved with the scheme, but obviously, to expect to invest more individually” says the association. However Richard Lambert, chief executive of the National Landlords Association, is less sanguine. “Just as the Green Deal looks like it will finally succeed, the government seems determined to sabotage its own policy” he says. “The NLA made a strong case to DECC for the incentive payment for solid wall insulation projects to be set at a level that makes financial sense for the landlord to proceed with energy efficiency improvements to a property. We used data from the applications to our Green Deal service to justify our call for it to be set at or £6,000 and the success of the Green Deal Home Improvement Fund so far shows that this was the right level” he claims. Lambert insists that lowering the incentive for solid wall insulation to £4,000 will inevitably push more projects beyond the capacity or willingness of the landlord to fund them. “As the greatest proportion of solid wall properties are in the private rented sector this move therefore risks exempting a significant proportion of homes from meeting the energy efficiency targets set by DECC. The government urgently needs to reconsider restoring the funding” he says.
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Survey shows landlords' anger at 'agent overcharging'

Landlords are fed up of being overcharged by letting agents, according to a survey of 600 investment property owners. Only 30 per cent of landlords agreed that fees were fair - but most other results were even more damning. Some 78 per cent felt agents’ fees were not transparent and nearly 90 per cent of landlords claimed that they had been misled by agents at some points. Almost one in 12 landlords - eight per cent - claimed that a letting agent had actually stolen money from them. The research, by an online forum called Movebubble, says three quarters of landlords have been charged up to 20 per cent of their rental income per month by an agent and about eight per cent claimed the fee could be as high as 30 per cent. The survey also suggests some letting agents are not carrying out work they are billing for. And despite being charged for reference checks, 46 per cent of landlords say they do not have any evidence that the checks were in fact undertaken.
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Deposit scheme wants more cooperation to catch rogues

My Deposits is calling on enforcement agencies to work with it and other tenancy deposit schemes to crack down on fraudulent landlords and agents. The call comes after My Deposits claims to have helped prevent over £300,000 worth of deposits being stolen. The firm’s chief executive, Eddie Hooker, CEO, says this is the amount saved as a result of “hard work and doggedness” to gather and pass on evidence to Milton Keynes Trading Standards last year. It helped convict a letting agent who received an 11 month jail sentence after admitting 25 counts of fraud involving landlords and tenants. “Over recent years we’ve developed a comprehensive and effective approach to identifying members who try to bend rules. We work with Police and Trading Standard’s Officers in England and Wales as they seek to understand how the different TDP schemes operate and then obtain sufficient evidence against ‘rogue’ businesses” says Hooker. My Deposits says there are over a dozen other cases still pending prosecution where the firm is providing assistance to catch out rogue landlords and agents.
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LetRisks breaks down tenants' insurance claims

Accidental damage to flooring is the main cause of insurance claims for tenants, followed by damage to furniture and then semi-structural damage to the property according to a breakdown of claims research by LetRisks. The humble iron is the demon of buy-to-let properties, being the major cause of damage to floor coverings, such as vinyl and carpets, with an average claim of £380. Damage to the building - including décor, curtains, blinds and outside areas more than anywhere else - has an average claim value of £566. The claims data also reveals that that the most expensive damage to buy-to-let property is fire and smoke damage. Though it only constitutes eight per cent of all claims, it is responsible for the largest claims with the average being £4,692 - and some exceeding £100,000. This is followed by water damage, which constitutes 10 per cent of claims, and has an average claim of £690.
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LendInvest’s world-record loan repaid

LendInvest has confirmed that its world record breaking peer-to-peer loan has now been paid back.

The deal, which was featured on the front page of the Financial Times, received global coverage for the unprecedented loan back in January this year. The FT described the £4.1m loan against a commercial building in Croydon, South London, as transformative for peer-to-peer finance.

The borrower, who required the funding after being let down by a high-street lender, had a long-standing relationship with LendInvest’s affiliate business Montello, and the loan allowed the developer to purchase the Croydon building whilst certain planning issues were sorted out.

The development, known as Green Dragon House, will offer over 120 new flats for the area, providing long-awaited affordable housing in London.

The investors were paid a net return of 6% for the six months in which their money was invested in the loan (i.e. 12% per annum).

The loan has now been paid back via a financing arranged by John Kerrigan from Arc & Co, Mayfair based brokerage.

Christian Faes, co-founder of LendInvest, said: "As with any loan, it can only really be characterised as a good loan when it is repaid.

"We are experienced lenders, and we have what we believe is the best deal-flow and underwriting experience in the secured P2P market.

He added: "While some platforms are starting to see some hefty defaults and investor losses, LendInvest is able to exploit its experience and track record as a lender. Unfortunately, some platforms are going to learn that it is easy to lend money, the hard part is doing sound loans that get repaid."

 


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Loans lender launches buy-to-let product

Central Trust, a secured loans lender based in Watford, has announced its launch into the buy-to-let market by offering a range of variable rates, starting at 9.9%, and three year fixed-rates, starting at 10.99%.

The new product, aimed at landlords, aims to allow them to release equity in existing properties without having to resort to remortgaging. With a maximum LTV of 75% and loans from £3,000 to £70,000, funds can be raised for a wide range of purposes and borrowers can use the rental income they receive as proof of repayments.

Central Trust hopes the new products will provide landlords with more flexibility as they seek to benefit from a buoyant rental market.

“Our new BTL products offer a range of unique customer-focussed features,” Buster Tolfree, Commercial Director of Central Trust, said. “Simply put, nobody else in the market offers BTL second charges to 75% LTV, on a fixed rate basis or with only a 58 day ERC and unlimited overpayments.

He continues: “These features place us right at the cutting edge for BTL second charges. The reaction from our introducers has been amazing, and we look forward to launching further innovative products in the future.”

Tom Garratt, Head of intermediary Channel at The Loans Engine, said of the new product: “As consumers become more concerned about the imminent increase in the base rate, we have seen a significant uplift in the popularity of fixed rates on secured loan products.

“Securing a loan on a rental property is an effective means of raising funds for a variety of reasons, such as renovation of the property or raising the capital needed to place a deposit on another buy-to-let property but the introduction of a fixed rate term on a second charge buy-to-let product, certainly raises the bar and will prove to be popular amongst our introducers.”


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Property entrepreneur launches new project

Steve Boultbee-Brooks, the renowned property and technology entrepreneur who built and led Boultbee Land for 26 years with his brother Clive, has launched a new venture. Boultbee LDN will specialise in the acquisition, development and asset management of prime commercial and residential property.

Located in Marylebone, Boultbee LDN's property and asset management team boasts over 25 years of multi-sector experience. They buy and develop property with improvement potential, presently concentrating on acquisition of land and buildings in London that can profit from redevelopment (typically with a GDV ranging from £10m-£30m). The team have already invested in several opportunities with a GDV of £60m since launching. Looking forward, there is a further £40m worth of transactions in the pipeline.

The ultimate aim of Boultbee LDN is to add value across developments for the benefit of everyone, from JV investment partners and development partners to those buying and living in the end product. They endeavour to achieve this through high-quality design, a wider team-focused approach and a professional product delivery.

Steve Boultbee-Brooks said of the new scheme: “I wanted to create a company that would focus on a particular area of the market, returning to where my career began – London. As a team, we are passionate about seeking opportunities to which we can really add value. Whether we are building a portfolio of shopping centres, offices, or apartments, our approach is always the same: identify an optimum product, review it from a fresh perspective, and deliver it.”

He added: “Our financial goal is to create a £250m property portfolio comprising £100m worth of investments and £150m worth of residential and mixed-use projects in our first year to 18 months of operation, and we are already well on our way to achieving this.”

One of Boultbee LDN’s most recent purchases is a site for residential and retail development in Brockley, South East London. This district has recently benefitted massively from regeneration, including the extension of the East London Line. The scheme, a joint venture partnership with Peverill Securities Ltd, includes 25 residential apartments, a supermarket and two smaller retail units. It is to be managed by Shape Commercial. The site was purchased from a private family trust for £2.8m with funding secured through Titlestone, and has a GDV of £11.5m.

“Brockley is now considered to be a strong residential location of increasing attractiveness to occupiers,” Sean Dempsey, Director of Asset Management, said. “This is principally due to its excellent connectivity and the high quality of its existing properties, which can be ideal live-in refurbishment projects.  However, the area needs more affordable, high quality apartment schemes, targeted at both local and new residents, in order to both meet and sustain the high demand.”

He added: “This project is a joint venture with Shape Commercial - over the last nine months, we have been establishing a great working group, based on a comprehensive mix of project skills, within the new team. We are already working on a range of other schemes with Shape Commercial and are really enjoying the creativity and effectiveness of the relationship.”
 


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Wealthy students becoming key players in Prime Central London’s rental market

London Central Portfolio (LCP) annual lettings audit has shown the ever-growing importance of the international student sector in Prime Central London (PCL).

Finance professionals, traditionally the main inhabitants of rental apartments in the exclusive neighbourhoods of PCL, are no longer renting as much in these areas as a direct result of the financial crisis, when employment in the finance sector went down by about one third.

Prosperous foreign students have taken on the mantle, with their share of the market doubling from 12% to 29% between 2006 and 2012. Such momentum has been consolidated, with students accounting for a huge 41% of new tenancy starts in the last year. By contrast, new tenancy starts from finance professionals has drastically fallen to 21%, the lowest LCP has ever seen.

The rental sector in PCL has witnessed a 6.2% increase in rents for brand news flats in the last six months, according to LCP’s tenancy records. As far as re-lets are concerned, there has also been an increase in rents, in line with inflation, for the first time in five quarters. Once more, students have had a big part to play in this recovery – they have not only increased competition in the market through sheer numbers, they also have deeper pockets. They are currently outbidding the corporate sector for properties, willing to pay £600 a week for a flat, 7% above the average market rent of £562.

“The increase in student renters in PCL should be no surprise. Westminster houses three of the best universities in the world; Imperial College, University College London and LSE, and sees 100,000 students visiting a year,” says Naomi Heaton, CEO of London Central Portfolio. “London has become a magnet to these privately wealthy young adults who are looking for top quality accommodation to go with their top drawer education. With 82% of affluent Chinese families currently planning to send their children to study overseas, this importance of this sectors looks to be going from strength to strength.”

She adds: “Even as financial markets recover, landlords are increasingly buying into the concept of international student tenants. Many have experienced a sophisticated lifestyle: they treat properties with the same care as corporate tenants but the wealth underpinning them is stronger. This means they can often outbid professional tenants, offering higher rents, often a year upfront, as parents are keen to install their children in the best, most secure homes.”

There is, however, an increased seasonality in the market. Some students will only rent for the academic year, contributing to the higher level of tenancy start-ups by the student population. Conversely, those from the financial sector may extend their tenancies and stay on a more long-term basis, which makes them a still attractive proposition for landlords.

LCP’s audit also shows an unexpected return of British tenants to PCL, taking up 13% of properties in the last 12 months, the most of any nationality. These British tenants range from the corporate sector to entrepreneurs, retired couples looking to live the London life, and pensioners who are studying for their PHDs.

Lastly, data by LCP also indicates that the market is gradually shifting to smaller one bedroomed units, with most tenants single or duos. This can be explained by the fact that Central London is a popular, ’go-to’ destination for the young (40% of residents are between 20 and 39 years old) and corporate high achievers tend to come over as singles or couples. Furthermore, it reflects the growing standing of the international student community who generally come to live alone and don’t share unless they arrive with siblings.

“The dynamics of the private rented sector have clearly shifted in Central London,” Heaton concludes. “To optimise their returns, it is important for landlords to recognise and adapt to the changing landscape.”

 


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Sutton Kersh auction proceeds eclipse £3.5 million mark

Sutton Kersh sold 70% of the lots offered at its latest Merseyside property auction, generating proceeds of over £3.7 million.
 
The performance on the day was supplemented by a large number of lots which sold prior and, with strong post sale interest in unsold stock, the final figure could exceed £4 million, the firm reports.  
 
Highlights included a pair of vacant three storey middle terrace properties in Chester, comprising retail, commercial and residential space. Guided at £100,000 to £125,000, competitive bidding saw the lot achieve £189,000.
 
The very first lot of the day, a three bedroom extended semi-detached on Blackmoor Drive in Liverpool L12 which was guided at £110,000 plus, was knocked down for £140,000. 
 
Bidding wars were a feature of the sale, typified by a three bed middle terrace on Hampden Grove in Birkenhead which achieved £64,000 off a guide of £40,000 plus.     
 
In the four auctions to date in 2014, Sutton Kersh has sold over 300 lots and generated proceeds in excess of £21 million.
 
Cathy Holt, Auction Manageress at Sutton Kersh noted that after a successful first half of the year, the firm were relishing the second of 2014 with confidence.
 
Sutton Kersh is now inviting instructions for its next sale which takes place on 11th September. The catalogue closes on August 15th. 
 

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