Monthly Archives: October 2009

Water Woes for Landlords

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Unpaid water bills worth £500m of tenants are now being passed on to the landlords causing them to unite in anger to protest against such a possible move.

The British Property Federation (BPF) and Residential Landlords Association (RLA) responded to the Walker Review of the government’s water charging calling it unfair.

Prohibition on cutting off or limiting supply makes debt collection harder for water companies.  Increased   metering  has   been  proposed  to  conserve  water  and  the
Government’s decision to pay housing benefit to social housing tenants instead of the landlords who usually pay the bills has escalated the problem. Having a lot of unpaid debt themselves, small landlords will be burdened further as we already have problems collecting money which is due to us.

Landlords are suggesting alternative solutions to help with the problem such as water companies working with landlords to identify when tenancies started and finished instead of issuing bills to ‘the occupier’. As landlords we must find it easy to give such notice and water companies must promptly act on the information received.

Authorising local authorities to pass council tax bills to landlords in case the tenant cannot be identified has also been proposed.

It seems as though landlords will fight this inequity tooth and nail for the gross injustice it represents.

Some Landlords Ignoring Laws

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It is a worrying fact, according to the Deposit Protection Service (DPS) that a huge number of landlords are still ignoring the deposit legislation that requires them to put their tenant deposits with a Government registered body. It is true that the number of landlords choosing to ignore the law has halved over the past year but that still leaves an awful lot who are taking the risk of continuing to totally ignore it. According to the DPDS 30 percent of landlords openly admit to ignoring the law.

The result of this situation is that the DPS have now put their support behind the idea of a landlord register in the hopes that it will make forcing landlords to comply with the deposit laws easier.

Kevin Firth, director of the DPS, said “More needs to be done and ignorance is no excuse. We believe that the introduction of a national register would make landlords more accountable and offer tenants a greater level of protection. Mandatory registration and deposit protection would leave rogue landlords with nowhere to hide.”

Whatever you make think of this legal requirement, the fact that so many landlords continue to ignore it is great fodder for those who wish to make sure our industry is tightly controlled by Government. Perhaps it is time we all thought about doing the right thing as this demonstration that we are unable to self-regulate can only lead to trouble as far as I am concerned.

Buy To Let Market: A Time Bomb!

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Reports out this week indicate something most of us have known for a long time: the buy to let industry is in a crisis that is set to only get worse if banks continue to take the line they have recently adopted.
The crux of the matter is that enquiries regarding BTL properties have increased by fifty percent over the past year, while the number of deals available from banks has dropped by seventy percent. This is clearly causing major problems with supply and demand. Hannah-Mercedes Skenfield, Moneysupermarket mortgage channel manager has this to say on the situation

“Our figures show nearly ten per cent of those looking for a mortgage are looking for a buy-to-let mortgage, but the number of products has fallen by over two-thirds compared to this time last year,” she says.

“With significantly less products left on the market and high interest rates attached to those available, we could potentially have a ticking buy-to-let time bomb on our hands. The need for rental housing is increasing, but there may not be enough landlords available to cater for this demand.”

This really does seem to be a recipe for housing disaster and we can only hope that something gives soon in the banks attitude to help us avoid this crisis.

A Third of Landlords Worried About Future

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It seems that despite the fact the economy is now in recovery, according to most experts, landlords are still very worried about where they will be in a couple of years time. This is probably not surprising considering the attitude of the banks which has been well documented on this blog over the last month or so.

I suppose that if you are in a position where you need to negotiate some or all of your mortgages in the near future, you have a real reason to be concerned. Considering the fact that so many landlords have struggled through the previous eighteen months, it is understandable that the way banks are acting is making them extremely edgy.
 
They are also concerned about the plight of tenants, many of whom are still finding it hard to make ends meet. Clearly this is an issue for landlords as it will inevitably be linked to some rent arrears, which in turn will make it difficult for landlords to meet their commitments.

While I think caution is called for at this stage of the recovery process, landlords should be careful not to worry themselves into a difficult position. For example, as I have said before, keeping up with insurance payments is vital.

Buy To Let Loans Harder And Harder To Get

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The news that landlords are finding it extremely hard to finance their ventures these days seems to still be the biggest news in the property sector at the moment. If you are a landlord with a sizable portfolio, the news is even worse as banks continue to show reluctance to lend to you.

Whatever the reason that you may be in talks with the bank, most of you are commenting that it is harder than it has ever been to get hold of the money you require. A full ninety percent of landlords have indicated to survey-takers that you found negotiations significantly more difficult this time than at any other.

When you take into account that products available to buy to let landlords fell by a truly mind boggling 95% over the last two years, this fact is hardly surprising but it is distinctly worrying. In an economy that is starting to show signs of recovery, it appears that buy to let landlords are getting a even more raw deal than anyone else, with residential loans being on completely the opposite track.

As people involved in the property rental sector, we can only hope that the banks wake up to themselves soon and give us a fair deal. Either that or that the Government intervenes to guide the banks in the right direction.

Banks Preventing Landlords Snapping Up Bargains

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The Times Online had a really interesting article on how banks are reducing even further the amount they are willing to lend to landlords. If you are in the market you should probably head over to their website and read the whole thing, but for those of you who are pushed for time or have only an academic interest I will give you a quick rundown.

The depressing news that Lloyds bank has halved the amount it is willing to lend from £6m on up to 18 properties, to £3m on a maximum of nine properties, is probably not a huge shock to anyone but it is certainly a worrying sign of the times, especially when you take into account that two years ago the same bank would have been willing to lend in the vicinity of £14m.

This has come at a very bad time for those property managers with an eye for a bargain. As David Hollingworth, at L&C, puts it: “This is the last thing the market needs. Lloyds’ decision leaves slimmer pickings for landlords hoping to make the most of low [interest] rates and property values.”

Landlords are chafing at the bit to get stuck into these opportunities and yet the banks are holding them back. I cannot help but think that this is counterproductive in an economy that is struggling to recover from a horrible financial downturn, especially when we hear so much about economic stimulation from our politicians.