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Estate Agents & Letting Agents in Leeds

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

Redbridge landlord ordered to pay £18,000 for renting out unsafe property

A landlord has been ordered to pay £18,914 after renting out an unsafe and unlicensed House in Multiple Occupation (HMO) in a prosecution by Redbridge Council.

Properties which need a HMO licence include any property with three or more floors and five or more occupants from two or more families who share facilities.

The three storey property in Cavenham Gardens, Ilford, was visited on 25 September 2013 by the Council’s Housing Standards team, Planning Enforcement and the Redbridge Community Police team. The property was occupied by nine unrelated people including two children, one being only 18-months-old.

The property had no fire alarm system, unprotected escape routes, obstructed fire escapes in addition to defective electrical installation, a mouse infestation and missing guarding to the staircase.

The landlord, Abdul Rashid Warishaully, was served with an Emergency Prohibition Order to prevent the property from being occupied. Despite this, Warishaully reconnected the unsafe electrics and continued to rent out the property.

On 11 July 2014 Warishaully, 44, of South Park Road, Ilford failed to attend Redbridge Magistrates Court and the case was dealt with in his absence.

He was found guilty of 15 offences under the Housing Act 2004 which included housing management offences, breaches of the Emergency Prohibition Order, failing to license an HMO, and failing to provide the Council copies of safety certificates.

A fine of £16,000 plus costs of £2,794 and a victim surcharge of £120 was ordered to be paid within 28 days.

Councillor Muhammed Javed, Cabinet Member for Housing said: “The conditions found at this property were truly appalling and placed the tenants’ safety at considerable risk. These sorts of conditions will not be tolerated by Redbridge Council and landlords who flout the law can expect to face being caught and prosecuted. I believe it’s a right of everyone to live in a safe and secure accommodation.”

Redbridge Council is currently running an HMO licensing amnesty and is giving landlords until 31 August 2014 to submit their licence application.

An enforcement campaign will begin on 1 September 2014 to target landlords who do not come forward to apply for a licence. Prosecution could result in a fine up to £20,000.


 


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London least profitable place to be a landlord

Research by mortgage lender BM Solutions has found that rental returns in the north are considerably better than those in the capital.

The lender made its calculations for the study by taking the level of rent received against the property value, creating an overall figure for 12 regions.

Central London zones one and two returned the lowest yield of 5.5%, while the North East, North West, West Midlands and Wales all yielded 6.4%. 

This is despite the fact that void periods have been decreasing in the capital, with just one in five central London landlords experiencing voids in the past three months (down 0.7% from the previous quarter). Conversely, the highest incidence of void periods was in the North East and East Midlands where more than two in five landlords experienced it in the last quarter.

Data analyst Moneyfacts studied the BM Solutions research and concluded that although London rental prices may be high, the properties themselves cost an “equally extortionate amount”, meaning landlords in the capital will generally spend far more servicing their properties than elsewhere in the country.

Phil Rickards of BM Solutions said: "London has long been seen as the centre of the rental market, with demand outstripping supply and the shortest void periods. However, for the greatest return, looking further afield may be just as an attractive option with rental yields clearly higher out of the capital."

 


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New BTL mortgage rates from Leeds Building Society

Leeds Building Society has re-launched its range of short term fixed rate buy-to-let mortgages with rates starting from 2.65%.

The society has introduced a new two-year fixed rate buy-to-let mortgage at 2.65%, available up to 60% LTV, and has cut rates or fees on other two and three-year fixed rate products, which come with additional benefits including a free valuation and legal services.

Highlights from the new range include:
• 2.65% two-year fixed rate buy-to-let mortgage up to 60%, with a £1,999 fee.
• 2.99% two-year fixed rate buy-to-let mortgage up to 60%, with a £999 fee and a free standard valuation up to £335 and free in-house legal services for remortgages
• 3.19% two-year fixed rate buy-to-let mortgage up to 70%, with a £999 fee and a free standard valuation up to £335 and free in-house legal services for remortgages

“We’ve refreshed our range of short term fixed rate deals for buy-to-let mortgages,” said Martin Richardson, Leeds Building Society’s general manager for business development. “As well as reducing rates, we’ve also brought down fees on some products and added benefits, such as a free valuation and legal services, to offer a choice of packages to borrowers, whatever the size of loan they’re seeking, whether for purchase or remortgage.”


 


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Average rents in Greater London double elsewhere, says HomeLet

The latest figures from the HomeLet Rental Index show that average rents in Greater London now stand at £1,142 a month compared to £694 across the rest of the UK.

The June 2014 index found that average UK private home rents have increased 6.3% in the past 12 months, now standing at £862 per month compared to £811 a year ago.

HomeLet claims that rents in Greater London, the South West and the South East of England are “pushing the bounds of affordability”. The data also suggests that “pockets of affordability” are arising in the North East of England, Scotland and Wales, where there is greater parity between incomes and rental prices.

The HomeLet Rental Index found that rents have risen year-on-year in 10 out of 12 regions of the country, with only the North East of England and Scotland seeing minor falls in rental prices.

The London market continues to race ahead with the average monthly rent in Greater London being £1,412, compared to £694 for the rest of the UK (excluding London), meaning that London rental prices are now more than double those of the rest of the UK for the very first time. When comparing average rental prices to average tenants’ incomes, Greater London represents the least affordable rental market in the UK, with the average tenant’s gross income being just 2.23 times the average annual rental.

Other regions feeling the squeeze on affordability are the South West and South East of England with the average tenant’s gross income being 2.55 times and 2.93 the average annual rental value in the respective regions.

Commenting on the report, Martin Totty, Barbon Insurance Group’s chief executive officer, said: “The private rental sector continues to show strong growth with rental values increasing year on year across the country, with little exception. Although average incomes have also been rising, there are parts of the country where we are seeing affordability getting tighter. As a rule of thumb, for a rental property to be affordable, a tenant’s gross income must be at least two and a half times his or her annual rent. Our data shows that rents in London have pushed beyond that boundary, with the South East and South West of England close behind.

 "The options for Londoners who are looking to rent in the capital are often to consider sharing their home, or seeking a guarantor to secure the tenancy. Alternatively, tenants looking for more affordable rental properties and a greater parity between incomes and rents could consider looking further afield to other regions of the UK such as the North East of England, Scotland, Northern Ireland and Wales. These regions currently offer comparatively good value for tenants and may, as a result, see growing demand in the months to come both from tenants and from landlords looking for profitable places to invest.”
                                                               

 


 


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New company claims to “re-write the rules of private renting”

A new rental brand, Essential Living, says it will “disrupt housing” by making renting “service-led and socially acceptable”.

The company aims to encourage large-scale long-term investors to become landlords, instead of “amateur” buy-to-let investors. It says this could eventually weed out the criminal rogue landlords for good and encourage a new service-driven mentality that it claims has revolutionised student housing in major towns.
 
Essential Living is backed by M3 Capital Partners, a large fund manager of American pension cash. However its founders are veterans of the London housebuilding sector.

The company has eight developments underway across the South East with plans to build a portfolio of 5,000 homes that it will design, build and manage itself.
 
The unique selling point of Essential Living is that its developments will be designed specifically for renters. It claims this will mean high quality properties “a world away” from much of the country’s poor quality rented stock. Properties will offer equal sized bedrooms so sharers no longer have to flip a coin for the best room, large shared spaces, an on-site concierge, on-site maintenance, and a high focus on customer service.
 
Martin Bellinger, chief operating officer of Essential Living, said: “You have the ability to create genuine communities in these buildings. If the building is owned by one landlord, then it’s in their interest to give some of the space to communal use.
 
“The idea is that your home doesn’t start at the door to your flat, it starts at the front door of the building. Housing is currently seen either as an investment or as a home - this is about changing it into a service.
 
“Everyone agrees that tenants should be treated as customers and we think that by designing homes specifically for rent – and managing them properly – this can happen. Onsite maintenance will avoid tedious battles securing plumbers or electricians, while booking systems and longer tenancies will cut out costly agents' fees that snare people who are forced to renew tenancies every six months.
 
“Our aspiration is to take the hassle out of renting by giving people the same consumer confidence they get buying a TV from John Lewis into renting a flat. It’s currently unheard of in Britain, which is very sad. We’re speaking with legal experts at the minute to see if it’s possible to wrap everything – such as utility bills, TV and internet, insurance and other costs – into one fee which will reduce admin for renters and help people better plan their outgoings, allowing them to save.”
 
The company has bought numerous sites in locations including Maidenhead, Croydon and Greenwich, as well as central districts like Swiss Cottage, Canary Wharf, Bethnal Green and Archway.
 
Scott Hammond, Essential Living’s managing director added: "The only way investors can currently get exposure to renting is by buying a buy-to-let property, which comes with all kinds of risks they don’t necessarily want. As the sector gains scale over the next decade we’ll see companies backed by institutions opening it up to wider investment by converting themselves into investment trusts or listed entities."
 


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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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