Recent reports that buy-to-let landlords are leaving the market in droves have been reinforced with the news of specialist of buy-to-let lender, Magellan, closing its doors to new business.
Impending pressure from the government to tackle landlords and letting agents who, in their words, 'potentially discriminate' against some tenants, including those in receipt of benefits, has taken its toll. That, together with the squeeze on any return on investment in rental property, has made many reconsider their venture into the sector.
The general disarray caused by Universal Credit, where housing benefit is no longer paid direct to landlords but to the client, is just one named culprit. It has provoked reluctance on the part of some residential buy-to-let owners and their agents to rent to those in receipt of such payments. Denying potential housing benefit tenants the right to rent is justifiably seen as flouting equality laws - even though many landlords have resorted to these draconian measures only after finding themselves out of pocket due to DSS tenants not paying their rent.
Add to this, the government's Right to Rent scheme that
The property market in general and the buy-to-let market in particular is confused, and no wonder. Conflicting reports abound and scare stories do not stimulate confidence in the sector.
We believe, and always have, that property is a long term, slow burn investment that will reap rewards in due course – it is not for short-term quick return investors.
Our advice is to engage a good letting agent to guide you on how to maximise the potential rental income your asset might attract, and then to capitalise on that by introducing reliable tenants who will look after your investment.
Maurice O'Connor, Head of Compliance in Caxtons' Block Management department has been reviewing new regulations that will affect landlords.
In late summer 2018, Housing Secretary James Brokenshire announced a comprehensive review of fire safety guidelines, which began in the autumn. As part of the review, it was proposed that all privately let homes should undergo an electrical installation check.
This month, the government confirmed it will introduce mandatory five-year electrical safety checks for all private rental homes in England.
In future, and in order to comply with ever increasing rules and regulations, landlords will have to instruct qualified electrical inspectors to undertake checks. Already compulsory for houses in multiple occupation (HMOs), the first properties to qualify for this latest safety measure will be new tenancies, and will be closely followed by existing lettings.
So far, no date has been set for the checks to be brought into law – this will take time to pass through Parliament.
The group Electrical Safety First has been campaigning for many years to tighten the law relating to landlord obligations. On their website* they offer sound advice to landlords saying "Electrical Safety First has found that landlords are exposing themselves to significant financial risks, from fines and invalidated insurance, through not acting on their electrical safety obligations.
"Landlords are also putting millions of UK private tenants at risk of serious accident or fire."
Minister for Housing and Homelessness Heather Wheeler MP said: "These new measures will reduce the risk of faulty electrical equipment, giving people peace of mind and helping to keep them safe in their homes."
Caxtons will, of course, provide advice and guidance in relation to this impending change in the law.
There was a great turnout to Caxtons' Residential Block Management Update 2018 at The Princes Suite, Dartford Football Club on 21st November, with many directors of Residential Management Companies, fellow agents, solicitors and other professionals in attendance.
David Gurton, director of Block Management at Caxtons welcomed the assembled audience and outlined an extensive programme for the half-day seminar, then introduced the first speaker, Philip Jones.
Phil, who is a Chartered Member of the Institution of Occupational Safety and Health and a partner of Quantum Compliance, updated the delegates on current fire safety requirements and also provided an insightful review of the recent Dame Judith Hackitt fire safety report into the Grenfell Tower disaster.
Bukola Obadun-Craigs, a Senior Associate at Brethertons Solicitors who specialises in litigation and management in the residential leasehold sector, was second on to the platform and gave an interesting presentation on the exacting responsibilities and legal obligations of directors of residents' management companies as well as covering both service charge demands and 'Section 20' consultation.
There was a short break for coffee, which was followed by a compelling briefing from Chartered Insurance Broker,
The last speaker was Tony Martin, Caxtons' Head of Block Management who covered what clients should look for and expect from a good block managing agent. Tony explained the importance of budgeting, including for major works; the effect of service charge arrears on cash flow; client money protection; day-to-day management and site visits; compliance obligations; the company secretary role and much more besides.
There was a final, busy Q&A session with David facilitating and all the speakers taking questions from the floor. A buffet lunch rounded off the morning when delegates were then able to talk to the experts on a one-to-one basis. And what did the audience think of the event:
o ..an interesting, diverse range of speakers ..
o ..very useful information ..
o ..very knowledgeable and assured ..
o ..good level of detail, not too technical ..
o ..excellent! ..