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Renters to outnumber homeowners in 104 seats by 2021

By the time of the next census, over 100 MPs will represent seats where a majority of people are renters, research by Generation Rent has found.

The number of MPs who have more constituents who rent than own their home has risen from 38 in 2001 (6% of MPs) to 65 in 2011 (10%). If home ownership remains unaffordable and this trend continues, renters will start to outnumber home owners in 104 seats (16%) by 2021.

This represents a huge increase in political power for a large section of the population that has long been neglected by successive governments. In 2011, 35% of the UK population rented their home and Generation Rent is calling on MPs to give them a voice in Westminster by becoming “Renter Champions”.

Generation Rent compared census data for each Parliamentary constituency to find the proportion of the population that rents – either from a private landlord, the council or a housing association – and how this changed between 2001 and 2011. The 2021 forecast was then made by applying this trend to the 2011 figures.

Forty-nine of the predicted 104 renter majorities are in London, and large northern cities contain seats that have been dominated by renters for a long period. Traditionally these seats have been Labour strongholds – 50 of the 65 renter majority seats in 2011.

But renters are growing as a political force in more marginal and right-leaning areas. Of the 39 seats that are forecast to become renter majorities by the next census, 25 are Labour-held, 11 are held by the Conservatives and the Liberal Democrats, Greens and Respect have one apiece. Safe Tory seats such as Bournemouth East, Bournemouth West and Northampton South are projected to be renter majorities by 2021.

As politicians set their sights on the 2015 Election, Generation Rent is challenging every MP to become a Renter Champion and commit to making the housing market fit for people who rent, so that renting can be a genuine choice rather than a second class tenure of last resort. The campaign is particularly calling on the 104 MPs who will likely be representing more renters than owners by the end of the next Parliament.

Alex Hilton, director of Generation Rent, said: "As home ownership gets increasingly out of reach, ever more people will find themselves as permanent renters throughout their lives. Unless MPs adapt their priorities to reflect renters' needs then 100 MPs will be irrelevant to their voters by 2020. MPs have one parliament to adapt and we expect any government elected in May next year to be proposing pro-renter policies by June."


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Short-term lets will damage homes market, says MP

Government plans to allow private landlords to rent properties to tourists without planning permission have been criticised by Labour MP Dame Tessa Jowell.

Anyone wishing to let out properties on a short-term basis currently needs permission from their local council who can balance applications against the need to provide sufficient homes for long-term residential use.

The need for planning permission was introduced in the Greater London Council (General Powers) Act 1973 and has remained in place despite the GLC’s abolition in 1986.

Earlier this year the Department for Communities and Local Government described the rules as “unnecessary red tape and bureaucracy”.

Ministers claimed inconsistencies in how boroughs apply and enforce the rules was causing confusion for some property owners and are planning to use legislation being debated this week to scrap them.

Dame Tessa, currently the frontrunner to become Labour’s 2016 Mayoral candidate, has warned this would weaken councils’ ability to ensure London has a stable rental market.

She said: “It is scandalous that the government is prepared wilfully to shrink further the supply of privately rented houses and flats. The government should be reforming private renting to give better protection to tenants, not encouraging landlords to turn rented properties into what are in effect unlicensed hotels.

“Many private rented tenants are being exploited by landlords constantly bringing in new tenants so they can raise rents. The government’s plans will make this problem worse – reducing the supply of stable rented homes, and further destabilising local communities.”

Dame Tessa added that ministers should give councils the power to set local rules which serve the needs of communities while also meeting demand for tourist accommodation.


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A quarter of students feel “powerless” against landlords

As scores of students begin university this month a new report reveals that 1.7 million students (74%) have experienced problems with their accommodation or utility suppliers.

Ombudsman Services, one of the three mandatory ombudsman schemes regulating lettings agents, says many students admit not knowing where to turn to for help should they have a complaint or become involved in a dispute with a landlord or utilities provider.

Of the 1.7million students experiencing problems, accommodation related issues top the list with 60% of students encountering a housing-related complaint.

Damp, faulty fridges, broken boilers, leakages and vermin top the list of gripes – yet half of affected students were forced to complain several times to their landlord before any action was taken. More worryingly, 5% of students reported that their landlord had become threatening or abusive in response to a complaint and a third struggle to make contact with their landlord.

Meanwhile, taking out utility contracts can also be confusing to the uninitiated with almost a third (31%) of students experiencing problems with their telecoms supplier. Half of students experiencing telecoms issues battle with poor coverage, while a further quarter (26%) are affected by slow broadband connection speeds, despite internet access being crucial to their studies.

And things don’t get much better when it comes to the basics like heating and hot water as a quarter of students report experiencing problems with their energy supplier. Billing discrepancies are the cause of most disputes – and almost one in 10 (8%) students have had to pay bills owed by a previous tenant. While an alternative option of having bills included in the rent is available for many student digs, that doesn’t appear to be problem-free either as almost one in 20 students have never seen a breakdown of the bills.

As a result, more than a quarter (27%) of students, who often have little experience of entering long-term contracts, are left feeling powerless against their landlord. Living independently for the first time, and being unaware of their rights, can potentially leave students vulnerable to living in undesirable conditions – and in some cases paying more than necessary.

Chief Ombudsman Lewis Shand Smith said: “Starting university is an exciting milestone in every student’s life and for many it also means living away from home for the first time. While flying the nest has many attractions it can also be a daunting time and sadly this can result in some students having to deal with situations they may be unaccustomed to.

“As a student, the last thing you want is to become involved in a dispute over the very basics, such as having somewhere to live and access to broadband and heating. Far from being powerless, being a student doesn’t mean having to put up with poor quality accommodation, slow broadband connection speeds or shoddy customer service.

“With many students unaware of their rights or where to seek help and advice, we’re releasing a guide containing everything students need to know to prepare for a smooth transition into life away from home.”

To make life easier for students heading off to university, Ombudsman Services has released its Know Your Rights Guide containing tips and advice as well as a directory of who to contact for help.


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Second Cambridge landlord successfully prosecuted for fire safety breaches

A landlord was successfully prosecuted this week for renting out an unsafe property in Cambridge, the second successful prosecution by Cambridge City Council within the past two weeks.

Maggior Coppola, described as ‘unscrupulous’, had repeatedly refused to repair a property at risk of fire damage .

He was ordered to pay a £10,000 fine after admitting that he had failed to comply with an improvement notice and pleading guilty to four offences under the 2004 Housing Act, as well as a further offence under the Local Government (Miscellaneous Provisions) Act 1976. He was also ordered to pay full costs of £2,500.

Cambridge City Council’s environmental health officers carried out inspections of the house, which was used for multiple occupancy, and found it was unsafe due to the risk of fire and smoke spreading throughout the property.

Although Coppola was given time to undertake the required maintenance and upgrades, he did not, and was served with an improvement notice requiring him to complete the works by October 2013.

When he failed to comply and persisted in renting out the unsafe property a prosecution was commenced.

Cllr Kevin Price, executive councillor for housing at Cambridge City Council, said: “We want to see all families living in safe and decent accommodation. While the majority of landlords are responsible, there is no place in Cambridge for rogue and unscrupulous landlords.

Two weeks ago, landlord Khalid Malik pleaded guilty to 46 charges relating to four properties in Cambridge, and was fined £30,000.


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Landlords benefit from tumbling mortgage rates

Competition is driving buy-to-let lenders to cut their charges and fees, as well as to offer longer-term fixed rates, according to the latest Buy-to-let Mortgage Costs Index from Mortgages for Business.

On average the effect of fees and charges on buy-to-let mortgages was to raise the overall cost for comparison by just 0.54% pa in Q3. This is significantly lower than the average of 0.67% extra in fees and charges seen at the start of 2013, and down from 0.58% in the second quarter of 2014.

However, beneath this overall trend there is also a growing divide between fees for buy-to-let borrowers at different loan-to-value ratios.

Charges for low LTV (up to 65% of property value) and medium LTV (from 65% to 75%) buy-to-let mortgages have fallen dramatically.

By contrast, charges for high LTV (80% and above) loans have increased. In Q1 2013 the effect of these, at 0.71%, was broadly in line with that for medium LTV loans. Yet since then charges have mounted, to add an additional 0.84% to the average cost of buy-to-let borrowing at higher LTVs in the third quarter of 2014.

David Whittaker, managing director of Mortgages for Business, said: “Healthy competition is good news for landlords, who can now choose from a pool of in excess of 700 different buy-to-let mortgages. Meanwhile, the wider benefits of more buy-to-let funding are being felt by everyone in the private rented sector – including tenants who have seen a growing supply of homes to let this year.

“This is a vote of confidence in landlords, at a time when lenders remain under serious pressure to maintain the safest possible loan books.

“Yet the details are even more encouraging.  Prioritising middle and lower LTVs is prudent – but the most encouraging signs are lenders offering landlords what they need.  Longer-term fixed rates are the best option for landlords looking to protect their future income and minimise any risk associated with interest rate rises, and there are now many more of these options available.”

Five year deals now make up almost one in five fixed rate mortgages on the market, at 19%, up rapidly from 15% in the second quarter of this year.

By contrast three-year fixed rate deals have dropped from 19% to 17% of all products in Q3, while two year fixes, standing at 54%, still dominate in absolute terms but have also dropped from 57% of products in Q2.

“As we predicted at the start of the year, buy-to-let lending looks set to total at least £25 billion in 2014. However, as the industry starts to look ahead to 2015, the most positive signs aren’t from the headline figures – but in the detail of how lenders are responding to demand for longer-term deals,” said Whittaker.

“Intrinsically, all landlords tend to have a long view. Careful buy-to-let borrowers will not be thinking about the precise timing of the first rise in Bank Rate but rather what variable mortgage rates might look like in two or three years’ time. So looking ahead, we may see a further increase in longer term fixed rate mortgage products as lenders respond to an increased demand for products that provide more stability.”


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Stafford landlord fined

Landlords are being urged to make sure they comply with their legal responsibilities after two men had to pay £2,000 costs to Stafford Borough Council. 

The local landlord and his managing agent were given a caution after the borough council found the three-storey house they rented out was not licensed. The council investigated after a tenant complained to them about repairs which needed doing at the property in the Coton area of Stafford. 

The two men accepted a caution and paid the £2,000 costs of the council investigation.

The property was occupied by five students over three-stories which meant it needed a HMO licence under the Housing Act 2004.

Councillor Patrick Farrington, cabinet member for community, said: “If a landlord or managing agent is in any doubt of their responsibilities in renting out property then please get in touch with us.

“We run a number of forums throughout the year for landlords which are free to attend and where there is expert advice and presentations which often relate to changes in the law or new responsibilities for those renting out property.”

He added: “The law is in place to protect both the tenant and the landlord and it can be a very costly business if you fall short of your legal duties.”

In August a Stafford landlord was ordered by a court to pay more than £4,200 after pleading guilty to breaching his responsibilities to keep his property safe - telling local magistrates he had “buried his head in the sand” and not listened to the council’s advice. 


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£5m raised at latest Eddisons auction

Fifty two lots were sold and £5,051,000 was raised at the most recent Eddisons auctions, which took place in London Manchester and Leeds.

The most successful lot was a freehold office investment in Leeds city centre which went under the hammer for £550,000.

Meanwhile, a vacant former nursery premises in the Bootle area of Liverpool which had been offered at a guide of £125,000 plus on the instructions of the Joint LPA Receivers, sold for £180,000.  

Elsewhere, two tenanted industrial units in Worsley, near Manchester achieved £500,000. The units occupy a site area of approximately 2.3 acres on the Wardley Industrial Estate and produce annual rent of £65,000.


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New rental controls in Islington

Islington Council has unveiled two measures to help private renters - a proposal for extra landlord licensing along Holloway Road and Caledonian Road, and a new council-run lettings agency to give tenants a better deal and to begin bringing down rents.

The proposed landlord licensing scheme would cover an estimated 3,500 tenants living in homes along the entire length of Holloway Road and Caledonian Road, which surveys have indicated are hotspots for poor management.

Earlier this year, after concerns about poorly managed houses and flats along the two streets, council officers surveyed 208 HMOs.

Of the 208 properties, council officers found 141 had problems linked to poor management, including dirty communal areas, mice infestations, use of undersized “box rooms” and various other breaches of HMO management regulations.

Significant hazards were also found, including poorly maintained fire alarm systems, dangerous staircases and neglected electrical systems.

The council is now proposing to introduce licensing for all landlords of HMOs along Holloway Road and Caledonian Road.  Licensing will enable the council to ensure that these HMOs are properly managed, in a reasonable condition, and meet minimum standards.

Landlords who fail to license risk prosecution and fines up to £20,000, and being required to repay up to 12 months' rent for letting a property which should have been licensed but wasn't.

Consultation on the proposal will begin next week, with a final decision to be taken at a future meeting of the council's executive.

Also, last night the executive approved the setting up of a new social lettings agency to be run by the council from next spring.

Many people, especially on middle and low incomes, are unable to rent privately in Islington, or forced to accept poor quality homes.

The social lettings agency will charge tenants no fees, as well as guaranteeing standards.

And in what is thought to be a first, the council will offer landlords guaranteed rents in exchange for them bringing down rents, so that they are affordable for people hit by housing benefit caps.

Cllr James Murray, Islington's executive member for housing and development, said: "More and more people in Islington are renting privately and we want to help make sure they get decent homes that they can afford.

"Our proposal for extra landlord licensing along the whole of Holloway Road and Caledonian Road comes after widespread evidence of poor management, including serious issues around electrical safety, fire alarms and landlords letting out tiny ‘shoebox’ flats.

"Alongside this, our new council-run lettings agency will offer a better deal for private tenants. There will be no fees for tenants and a management service from the council.

"We’ll also be using our position to effectively control rents in part of the private rented sector, so that they’re affordable to people who would otherwise be unable to stay in Islington because of the government’s benefit caps."

Other council initiatives to help private renters include a one-shop phone number - 020 7527 3001 - for all issues, inquiries and concerns relating to private rental.


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New fast-track evictions for bad tenants

Landlords have been handed new powers to speed up the eviction of anti-social tenants.

The changes are designed to make it easier to secure a possession order – a process that currently takes an average of seven months.

Private and social landlords will now be able to use a person’s previous convictions for serious anti-social behaviour to trigger proceedings.

Housing minister Brandon Lewis said: “No one deserves to feel intimidated or unsafe in their own community, yet lengthy court proceedings have left nightmare tenants free to cause misery for their neighbours for years.

“But from today, new powers mean landlords can take swifter action to evict any tenant convicted of persistent or serious anti-social behaviour, bringing faster relief to victims and witnesses.

“It will mean law-abiding social tenants will be able to live in peace, while anyone found guilty of serious antisocial behaviour cannot benefit from the valuable support that social housing can offer.”

The powers are contained in amendments to the Anti Social Behaviour, Crime and Policing Act 2014

 


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Hartlepool ignoring residents on licencing, says RLA

Hartlepool Council is seeking to implement a selective licensing scheme for private landlords despite local residents telling the council that a previous scheme was ineffective in dealing with nuisance and anti-social behaviour.

Consultation documents produced by the council reveal that the majority of respondents in areas that already have a licensing scheme say that it has failed to assist in reducing the turnover of tenancies, improving the behaviour of tenants or reducing persistent nuisance and anti-social behaviour.

The Residential Landlords Association (RLA) is opposing the scheme that will see landlords charged £600 to secure a licence for their property.

RLA policy manager, John Stewart said: “Not only do licensing schemes often fail to meet their objectives such as reducing anti-social behaviour, they can result in rent increases as landlords are forced to pass on the cost of these fees to tenants.

“Hartlepool Council needs to listen to their own residents who say that current licensing schemes have failed to tackle local concerns. The council need to take effective enforcement action against criminal landlords and take more steps to tackle anti-social behaviour by bad tenants, instead of penalising the majority of good landlords that stick to the rules.”

 


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