Landlords have shared their horror stories of nightmare tenants with the Manchester Evening News. The tales of woe are very eye-opening, especially for inexperienced landlords not yet savvy to the ways of some tenants.
One landlord described how he only found out his property was being used as a cannabis farm when the police informed him. The landlord’s insurance company refused to pay out, as the damage was linked to “criminal activity”. He lost money on the property as it cost several thousand pounds to fix the damage. He did admit, though, that it was a common problem and he had experienced the same issue before.
Tenant Destroys Property
Another landlord described how a long-term tenant, who had never caused a moment’s bother, trashed the place before she moved out. In all previous inspections, the house had been immaculate, but when the landlord checked it after she left overnight, he found it had been destroyed.
No Pets Clause Ignored
A third landlord let an agent manage their property. Despite assurances from the agent that everything was fine, neighbours began to complain, so the landlord went over to inspect the place.
He discovered filthy carpets, pet damage, despite a ‘no pets’ clause in the tenancy agreement. The tenants promised to clean up, but the situation deteriorated and by the time they were evicted, suddenly, the house was a disaster area with rubbish piled high.
It isn’t surprising that some landlords decide the property sector is not for them.
Landlords are frequently maligned in the press, but a recent Channel 4 TV show has shown that some landlords do want to give back to their local community. Marco Robinson, a 49-year-old landlord who spent time sleeping on a park bench with his mum when he was a child, decided to give away one of his properties now he’s the owner of a $25 million property empire.
A Free Home Giveaway
Eight thousand people applied to become the owner of a free house. After an extensive filtration process to see who was the most deserving, the long list was eventually whittled down to three applicants.
Single mum, Holly, lives in a mouldy flat with her baby and feels she won’t ever escape the poverty trap. Jo works, but can’t save for a house deposit. She is also going blind and is fearful she will lose her job and be unable to afford her rent. The Ali family are asylum seekers but their application was rejected. In the meantime, they can’t work and are homeless while their application is being reconsidered.
Giving Something Back
Marco didn’t want to hand out cash. His intention was to help people in a more meaningful way. In the end, he elects to give the flat to Holly so she can make a better life for her baby. Jo is given the deposit so she can buy a home and the Ali family are provided with temporary housing while their asylum application is sorted out.
It was a life-changing event for all three of them.
The latest figures from the Buy to Let index suggest rental price are holding firm, despite political upheaval and concerns over what happens next in Brexit. Research has found that rental prices have increased by 1.6%. Rents in England and Wales are now an average of £827 per month. This is up 2.1% on last year’s rent prices.
North West and Midlands Rise
Rents in the Midlands and North West have shown the greatest improvements. Rents here risen by 0.3% in June and landlords in the West Midlands are charging £609 per month, on average. Wales is also seeing impressive growth. Prices there rose by 3.6% in the last year, which is good news for Welsh landlords. Tenants pay around £872 per calendar month to rent a property in Wales.
London and South West Falling
The only two regions where rental prices fell were in the South West and London. Prices in the South West fell by 2.6% in the last year and prices in London dropped by 1%. However, the average rent in London is still £1,277, which is well beyond what a lot of people can afford to pay.
“Compared to the month of May, rental prices have held firm or continued to increase – suggesting that recent political turmoil has had little immediate impact on renters,” said Richard Waind from estate and letting agent, Your Move. “The squeezing of yields in recent times may also be showing signs of ending as landlord returns remain relatively stable with the North East and North West, in particular, performing well.”
Figures from Citizens Advice indicate that many landlords are failing in their duty to carry out repairs within a reasonable timeframe. According to the CAB, 40% of tenants have had to wait longer than they should for repairs to be carried out by their landlord.
How Much Time Does a Landlord Have to Make Repairs?
Accepted timescales for landlord repairs are:
• urgent repairs must be carried out within 24 hours and
• problems that cause discomfort or inconvenience must be carried out within 28 days.
Common problems include faulty boilers, dodgy electrics, and water leaks. Many families give up waiting for their landlord to take action and end up fixing the problem at their own cost.
The figures from Citizens Advice show that 31% of tenants took matters into their own hands and made their own repairs. A further 13% paid for a professional to fix the issue and 9% organised repairs but deducted the cost from their monthly rent.
Tenants can Seek Redress
Even though tenants are legally allowed to seek financial redress from an independent ombudsman if their landlord doesn’t carry out timely repairs, only 1% of tenants applied to the court for compensation. When asked why, more than 50% of tenants said they were fearful of the consequences if they forced the issue. In others words, they thought their landlord would instigate eviction proceedings if they complained about repairs not being carried out.
The CAB is calling on the government to give renters in the private sector greater protection from retaliatory evictions if landlords don’t carry out repairs.
Everyone knows the extent of house price rises, particularly in London and the South East, but are you aware of how big the divide is between rents in the South and North?
Rents Soar in London
Rental costs in London have soared by 45% in the last ten years. In 2007, the average rent for a property in London was £1,107. Today, it is £1,609. This is the worse hot spot, but tenants in the South East and East of England have not fared much better. In the South East, rents have risen from £848 to £1,085 and in the East, from £740 to £937. Yet the situation is very different in the North.
Rents Fall in the North
In Yorkshire and Humber, rents have remained static whereas, in the North West, they have dropped by 7%, falling from £624 to £581. In the North East, rents have fallen from £539 to £519.
Employment Growth Fuelling Rent Rises
Experts say this is largely due to greater employment growth in London and the South East. Job opportunities have risen by 12.5% in London whereas employment growth in Manchester is only 5%.
Another strong driver of rental prices in London is the rise in homes occupied by multiple tenants.
Landlords can charge higher rents in London because groups of tenants share a property and club together to pay the rent. However, affordability in London is sorely stretched and people are paying nearly half their monthly income on the rent. As a result, rents in the capital are likely to fall by 2-3% this year.
The first episode of BBC1s landlord swap TV show, ‘The Week The Landlords Moved In’, has caused a fair amount of controversy.
Luxury Landlord Lifestyle
The opening episode featured multi-million-pound landlord, Paul Preston, who lives with his girlfriend in a luxury apartment while his HMO tenants share their squalid property with a family of rats. Paul’s glamorous girlfriend only lasted one night in the dreadful bedsit vacated by account manager, Hayley. Poor Hayley spends £575 a month to live here while her landlord freely admits to blowing £1,500 a week!
Landlord Paul rather naively assumed there would be no problems at the property because nothing had been reported to him. Instead, he was greeted with mountains of rubbish in the backyard, rats, a washing line made from old telephone cables, rotten windows, no security lighting, and black mould on the kitchen walls.
Social Media Backlash
Viewers at home were incensed with his “smug” attitude and many took to Twitter to blast his lack of awareness.
Paul explained he wanted to learn more about the property business, which was behind his decision to take part in the show, but thanks to a lack of communication between him and his tenants, he was clueless about the many problems faced by tenants living in the property.
Initially, Paul tried to dismiss the rat problem as “something that happens in built up areas”, but eventually he realised that changes needed to be made, and to his credit, he gave the kitchen a makeover and cleaned up the backyard. He also provided his tenants with a nice new washing line.
A report from leading landlord mortgage lender, Kent Reliance, has revealed that landlord confidence in the buy to let sector is falling. Three years ago, 67% of landlords were confident about their prospects, but in the intervening years, this has fallen to 41%.
Value of PRS Rising
The value of the buy to let sector has risen in the last three years and is now worth £1.3 trillion, but tenant demand is falling. Three years ago, 39% of landlords reported an increase in tenant demand, but this figure has fallen to 27%. More landlords are reporting plans to reduce their property portfolios and many amateur landlords have already quit the sector. Many landlords are also having problems securing buy to let finance, with 25% reporting difficulties in this area.
Tough Times for UK Landlords
The report highlights some of the difficulties facing UK landlords at the moment, which is a reflection of the uncertainty facing the wider economy as a whole. Recent changes to landlord taxes and a lack of political stability are all affecting landlord confidence in the sector.
The Residential Landlords Association has highlighted problems caused by the government’s ‘Right to Rent’ scheme. Nearly half of all landlords quizzed by a leading landlord insurance company categorically stated that they would not let a property to anyone without a UK passport. 22% of landlords questioned also expressed doubts about offering a tenancy to EU nationals.
With continued confusion surrounding Brexit and the status of EU citizens living in the UK, this makes it much harder for anyone without a UK passport to find somewhere to live. It is also a problem for 17% of citizens who don’t have a passport.
Landlords Afraid of Repercussions
When asked why they were so reluctant to let properties to non-UK passport holders, landlords explained that they feared the repercussions of allowing a bogus passport holder to slip through the net. Unfortunately, this is having an effect on UK citizens without a passport.
Any landlord who has “reasonable cause to believe” that the person letting their property does not have the correct immigration status is committing a criminal offence. Penalties for conviction range from fines to a prison offence, and possibly both.
Changes to Right to Rent Scheme
The new changes to the ‘Right to Rent’ scheme came into effect in December 2016. If a landlord finds out a tenant is disqualified from letting a property, they must issue a 28-day eviction notice. If the landlord submits a Section 8 notice and doesn’t refer to the Immigration Act 2016, it is invalid and the eviction will fail on technical grounds.
Calling a snap election was always a risky strategy, but until the exit poll came in at 10 pm, many still believed Theresa May would walk away with a majority. Sadly, this was not the case and now we are left with a hung parliament and no clear way forward.
Today, the property industry and landlords have reacted to the news. The general consensus of opinion appears to be that the next few months are going to be difficult for everyone.
Uncertain Times Ahead
A hung parliament signals uncertainty. An extended period of uncertainty is bad for the economy, bad for the property market, and definitely bad for landlords. Uncertainty leads to procrastination. Sellers are reluctant to sell because they are worried they might not achieve the right price for their property and buyers are reluctant to buy in case property prices fall in the interim.
The whole point of the snap election was so that Theresa May could have a mandate to take the UK forward into Brexit negotiations without too much interference. Unfortunately, she has now lost the majority she so badly needed.
A New Housing Minister is On the Cards
The Tory Housing Minister lost his seat in the election, so the post will need to be filled by someone new. This will have an effect on government housing policy going forward and housing is likely to take a back seat for a while.
In the short-term, a lack of confidence in government’s ability to make decisions is going to have a knock-on effect on the housing market. This is bad for landlords and the property market in general.
Research carried out by the UKs largest tenancy deposit schemes has revealed that 40% of students don’t get their deposit back when they leave their student accommodation at the end of an academic year. The mass exodus of students leaving their rental accommodation is about to begin. The university term finishes in June and most students won’t return until late September or early October. Many of them are hoping to have their deposits returned, but sadly this is not going to happen for a considerable number of them.
Cleanliness is an Issue
The biggest issue for landlords is cleanliness. Unfortunately, students are not known for their clean-living lifestyles and there are numerous shocking photos online of ghastly kitchens and mountains of empty pizza boxes next to several weeks’ worth of dirty dishes. It’s enough to make a landlord turn pale.
It’s also more than enough to persuade a landlord to hang on to a student’s deposit, as paying for professional cleaners to come in and deep clean a property is expensive.
The TDS is advising students to do a deep clean before they move out of their property. They also advise them to tidy any garden at the property. Property damage is another bone of contention, so students are advised to report damage to their landlord, preferably in writing.
Landlords cannot make unfair or unjustified deductions from the deposit. They are also not allowed to withhold deposits at the end of a tenancy.