In many cities around the world, rents are so high and living space so cramped that tenants are forced to live in so-called ‘coffin homes’. We are used to reading stories in the UK press of tiny flats and cramped bedsits charged out at exorbitant prices, especially in London, but the reality is a lot worse in cities such as Seoul and Hong Kong. There, poor families and low-income workers are forced to make do in coffin apartments measuring little more than 20 square foot. Some people barely have enough space to stand up, yet pay £182 per month for the privilege.
Cage Housing in Hong Kong
In Hong Kong, cage homes are an affordable housing solution for people who can’t afford regular housing. House prices have soared in Hong Kong in the last five years, making it one of the most expensive places in the world to live. Stackable ‘cage homes’ offer just enough space for a person to sleep and store a few belongings, and thanks to wire mesh sides, are also secure. Some people have lived in their cage home for decades, as they can’t afford to find anything better.
The Most Expensive City in the World
Even more expensive accommodation in Hong Kong is not much better. For £400 per month, you still only get 60 square feet, which is extremely cramped for two people. But with living space in short supply, these people have no choice. So the next time a tenant complains about the size of a flat, tell them to be grateful they don’t have to rent a flat in Hong Kong!
A Scottish landlord is ruing the day he accepted £40k of valuable stolen whiskey from a tenant who couldn’t pay the rent. That slight error of judgement has led to a community order for possessing stolen goods.
Whiskey Worth £40k Hidden in Landlord’s Loft
The landlord was caught with 57 bottles of malt whiskey hidden in his loft. The police received a tip-off after a collection of valuable whiskey had been stolen from a bonded warehouse in Grangemouth last July. The informant told police that the landlord had a stash of whiskey in his loft, and suggested they take a look.
Police Acted on a Tip-Off from an Informant
When the police arrived, they found nine bottles of Port Ellen and seven bottles of Brora 1977, which had a combined value of £14,700. There were more stolen bottles recovered from the attic, but sadly for the landlord, none of them had been duty-paid, so he couldn’t have sold them on even if he had wanted to.
Initially, the landlord told officers he had invested in the whiskey collection for cash, with the intention of selling them on in ten years for a profit. However, he eventually admitted that he had agreed to take the bottles in lieu of rent, and had ignored the fact they were obviously stolen.
“I’ve Been Foolish,” says Landlord
The landlord’s solicitor told the court that his client acknowledged he had been stupid. No doubt the court agreed.
A new mortgage deal from the Loughborough Building Society lets students take on the mantle of landlord while they study for their degree. The ‘Buy for Uni mortgage offers 100% finance towards a property worth up to £300k. It mirrors a product sold through the Bath Building Society, but as tempting as it might sound to students who are keen to take a step on the property ladder, it should be approached with caution.
Student Mortgage Terms and Conditions
Any student aged 18 and over is eligible. The property must be located within 10 miles of the university where they are studying and a guarantor must be provided for mortgages with a LTV of 80% or more. The mortgage will revert back to a standard mortgage after three or four years.
Since most students can’t afford mortgage payments, the only way they can earn enough money is by sub-letting rooms to other students. This effectively turns students into landlords. In theory this is fine, but if something goes wrong, for example interest rates rise or the student has a problem collecting rent, the guarantor will be forced to step in and cover the mortgage payments.
The Stress Test
Some critics have described the mortgages as ‘elitist’, as only parents with substantial equity in their home will be able to act as guarantor. Rental income earned from subletting rooms also needs to be enough to cover the mortgage payments plus a bit extra.
Being a landlord can be a frustrating and stressful business. Tenants don’t always pay the rent and some tenants think nothing of calling you up at midnight demanding that you come and change a lightbulb or move a spider from the bath. Despite the aggravation, deadly disputes between tenants and landlords are, thankfully, rare. Unfortunately for one landlord, a catastrophic lapse of judgement led to bloodshed.
Landlord Murder Charge
A landlord in the US has been arrested on a murder charge after allegedly stabbing his tenant to death in a dispute over unpaid rent. The tenant was renting an apartment for $1,500 a month, but according to neighbours, he was nine months behind on his rental payments. One neighbour described how the landlord was terribly stressed by the affair and felt his tenant was playing games.
Tragic Loss of Life
The incident was witnessed by the victim’s son, which makes it even more tragic. This sorry situation probably wouldn’t have escalated to this stage in the UK, as any sensible landlord would have issued a Section 21 notice long before nine months had lapsed. However, it’s not hard to see why the landlord had reached the end of his tether, especially if he had mortgage payments to find on the property.
The moral of this story is that if you are struggling to cope with the stress of a difficult tenant, seek professional advice. All it takes is a momentary loss of judgment for bad things to happen.
There is a severe lack of affordable properties in London, with many tenants willing to pay over the odds for a flat, irrespective of how unsuitable it is. Not surprisingly, some landlords have decided to cash in on the strong demand for rentals in the capital.
Unscrupulous Landlord Caught Out
A landlord in Southwark has been caught out trying to let out a former storeroom as a bedsit. The minimum size for a rental property is 37m2. This property measured only 27m2. It also only had one window, so ventilation and natural light were very poor. As a result, the property did not meet planning regulations and had been illegally converted.
The flat was described as a one-bed flat and images online indicate the conversion was nicely done, but nevertheless, it still didn’t meet the required standards and Southwark Council did not hesitate to take action against the landlord.
Landlord Must Pay Costs
The landlord now has four months to remove the kitchen and bathroom from the property and stop renting it out to tenants. He will also have to pay full costs for the court case, which could end up being several thousand pounds.
Councillor Williams from Southwark Council said the borough would not hesitate to take action against unscrupulous landlords trying to make money by letting out unsuitable properties.
“This case shows we will take action against anyone who fails to meet our standards for decent, quality homes for our residents.”
The rise of online rental property advertising has led to a surge in property scams. Criminals are fraudulently offering properties to prospective tenants and then stealing deposits. In a recent case, a scammer rented a property via popular short-term letting website Airbnb and then advertised it on Gumtree.
Fraudulent Property Listing
It wasn’t long before a fish took the bait. The victim in question contacted the fake landlord and arranged a viewing of the property. He was shown around and seemingly happy with the place, arranged for an advanced payment to be transferred to the landlord. Shortly after the money transfer went through, the landlord stopped responding to calls and text messages, so the victim went to the police.
It soon became apparent that the fake landlord did not own the property and therefore had no authorisation to let it out. The money paid as a deposit was sent to a stolen bank account and withdrawn almost immediately. An investigation was launched by the Met’s Operation Falcon department, set up to deal with online fraud and linked crime.
The tenant had managed to take a photo of the fake landlord, which the police are now circulating in the media, in the hope that somebody is able to identify the perpetrator.
Unfortunately, this type of fraud is all too common. Most scammers advertise their fake properties on websites like Gumtree, so it is always worth keeping a check online to see if your properties every pop up for rent, especially if you use Airbnb.
A tenant has complained his rental home’s kitchen was so poorly designed that it gave his wife a bad back. The property, a £1,040 per month flat in North London, had a very small kitchen with a sink cunningly positioned in the corner, between two units. This meant that anyone washing up had to lean forward for an extended period because the sink was so inaccessible.
Very Little Choice in the London Rental Sector
The couple were forced to live in the flat for two years and when asked, they said it wasn’t worth complaining to the landlord because they felt it would be a waste of time. They claimed landlords have all the advantages because of the lack of availability of affordable rental property in London. Although the couple spotted the sink problem when they went for a viewing, they feared losing the centrally located property to another party and went ahead with the tenancy anyway. It wasn’t until they started washing up every day that they realised just how badly designed the kitchen was.
A “Silly” Design
When the letting agent responsible for the flat was contacted by the press, they admitted that the design of the kitchen was problematic and there was nowhere else for the sink to sit. However, the agent did acknowledge that placing the sink in the corner was “a bit silly”.
The rental sector hinges on supply and demand. In London, there are too many prospective tenants and not enough affordable properties. As a result, landlords know they will always find a tenant, no matter how unappealing their property is.
Landlords with buy to let mortgages are finding it hard to offer tenants long-term tenancies because many lenders refuse to support tenancies longer than one year.
CML Refutes Claims
The underlying problem is the Council of Mortgage Lenders and Insurers, which says tenancies lasting more than one year are not permissible. Their reasoning is that if a landlord defaults, the lender would not be able to sell the property to recover the debt with a tenant in situ.
However, the CML refuted such claims, saying that more than half of lenders did not place restrictions on the length of tenancies. It says a study carried out by Shelter found that half of all buy to let lenders were happy for landlords to offer longer tenancy agreements.
“As Shelter has said, any landlord wanting to offer a longer tenancy should be able to find a suitable lender. And anyone renting should be able to ask their landlord for a longer term, confident that lending conditions aren’t going to be a barrier.”
NLA Says Lenders Could Do More
Chris Norris from the National Landlords Association says lenders could still do more to help. He points out that many landlords are still on historic legacy mortgages, which do not have such flexible terms. A number of mortgage products are set to a maximum tenancy of two years, which may not suit tenants looking for a long-term tenancy.
Some landlords complain that restrictive lending conditions are a real barrier, so the advice here is shop around for a suitable product and always check the key facts before you sign.
According to research carried out by the Council of Mortgage Lenders, mortgage arrears amongst buy to let landlords are on the rise. The number of people in arrears rose by 6% in the third quarter of last year, which is the first time this has happened since the CML started monitoring the situation two years ago.
Stamp Duty Tax
The government has introduced several key changes in the last year, one of the largest being an introduction of a 3% stamp duty levy on anyone owning a second property. This came into effect in April 2016, which caused a large spike in sales completions in the buy to let sector. Many landlords considering investing in buy to let property rushed into buying in order to beat the 3% charge. Experts believe that at least some of these people made an investment they really couldn’t afford, which is what has caused the rise in mortgage arrears.
Mortgage Interest Tax Relief
The concern is that more landlords will fall into mortgage arrears when new tax rules come into effect next April. From April 2017, mortgage interest tax relief is being phased out, so landlords will pay more tax on their income from rental property. It has been estimated that around 440k landlords will be pushed into the 40% income tax bracket, many of whom will have no choice but to pass their extra costs on to their tenants.
Are you one of these landlords? If so, let us know in the comments section.
The press is always full of tales of rogue landlords and feckless tenants causing havoc in rental homes. Do a search on any given day and you will find at least one story where a disgruntled landlord complains about clearing up the mess left behind by a tenant or a fed-up tenant complains about their landlord refusing to lift a finger. What you won’t see very often is a tenant complaining that his landlord has installed a coin-operated toilet.
A thread first appeared on popular discussion site Reddit, where the poster asked for advice on whether his new coin-operated toilet was actually legal. The tenant claimed his Melbourne landlord has equipped the bathroom with a pay-to-use toilet, which required the tenant (and his guests) to pay one dollar to use the facilities. Not surprisingly, the tenant was unhappy with the arrangement.
“I understand in our laundry having to pay for the communal washing machine. But I pay the water bill that goes into my apartment,” the tenant wrote.
“[The landlord] said it was a government incentive to save water. But then why does he get to collect the money?”
Some people offered replies to the poster’s problem, but the majority thought it was an elaborate hoax. To dispel the naysayers, the OP posted a photo of the coin operated toilet, but most people were still unconvinced the toilet was real. The poster was advised to go to the press with his story, but once press got wind of it and contacted him, the trail went cold and the ‘tenant’ disappeared.