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Monday 30 June 2014

UK mortgage approvals drop on new affordability rules

Britain’s lenders approved the fewest number of mortgages in May in almost a year as activity cooled in the housing market in the wake of new affordability rules.
Bank of England data on Monday showed banks approved 61,707 mortgages for house purchases in May, the fewest since June last year. Monthly mortgage approvals have averaged about 70,000 over the past six months as the housing market has roared back into life and prices have climbed by about a tenth.
Economists said the decline in mortgage approvals was probably linked to the UK’s new mortgage affordability tests, which started in April.In a reflection of that recovery, net mortgage lending, which tends to lag approvals, rose at an annualised rate of 1.8 per cent, the fastest since 2008.
Last week, the BoE also announced some new curbs on mortgage borrowing to stop too much household debt from building up in the future, but it did not set them at levels that would curb current lending.

Average Void down to 2.7 weeks, is it lower in Southampton?

Downward trend in voids reported by landlords

Published by WARREN LEWIS

A survey by Paragon Mortgages has revealed that the average void period experienced by landlords has continued to fall.
The specialist lender conducts a quarterly survey of landlords, who report on a variety of trends in the market, including the annual average void period (the time a rental property is empty between tenancies) across their rental portfolio.

In Q2 2014 landlords reported an average void period of 2.7 weeks, a decrease from 2.8 weeks in the first quarter and the lowest level seen in the last 12 months. The last time the void period average reached a low of 2.7 weeks was Q2 2012.

There was a sharp increase during 2009 and 2010 where the average period spiked to 3.5 weeks in Q2 2010. Traditionally, over the course of the 12 year landlord survey, the average void period has been between 2.6 and 3.0 weeks. The lowest average reported was 2.5 weeks in Q4 2002. However, what is important here is that from its highest to lowest point there has only been just a week’s difference.

John Heron, Managing Director of Paragon Mortgages, said: “What we have seen over the last 12 months is a downward trend in average void periods reported by landlords. This is encouraging as it means properties are being let quicker, which is better for landlords and better for prospective tenants.

“With there being just a week’s difference in the highest and lowest void periods recorded this suggests that properties are being rented quickly, and that the letting process is managed well by both landlords and letting agents. As tenant demand is continuing to remain high, it is likely that we may see the average time a property is empty decrease even further in the coming quarters.”

Saturday 28 June 2014


Knowing whether a property can be resold with ease is half the battle when deciding whether or not to buy for your next property investment.  Why?  Well because one day, you may need to sell that property.  

A good guide to judge the saleability of property is the number of properties for sale, compared to the numbers that are sold, subject to contract.  Now I carried out this comparison last week, so the numbers will be marginally different today, but of the 92,254 households in Southampton there are 3,273 properties on the market for sale.  Of those, 1,563 are fully available on the open market waiting for a buyer and 1,710 have buyers and are sold subject to contract.  That means 52.2% of property on the market has a buyer in Southampton (interesting Portsmouth is 57.2% and Chandlers Ford is 76.3%).

However, delve deeper, and in Southampton today, 50.6% of detached houses on the market have a buyer and great news for semi owners as 58.4% of them have buyers.  Terraced houses fare even better, with 372 of the 615 on the market having buyers (making 60.4%). The properties that appear to be sticking though are apartments – 676 of 1,387 on the market have buyers, a comparatively lower 48.7%. 

I am always giving advice to my existing and new landlords in Southampton on what to buy (or not as the case may be).  Having this detail of information at my fingertips, allows me to spot trends in the local market, which then enables me to give the very best advice to my clients.  I don’t charge for advice but I do look to build long term relationships with landlords.  Feel free to drop me an email to or call into our offices on London Road in Southampton. Final thought though, before I go, Newport on the Isle of Wight, only 28.3% of properties on the market have a buyer.

Southampton Buy2Let property of the week

This 2 bed second floor apartment is very well located off the Avenue in Banister Park. It comes with an ensuite and allocated parking. It is approximately 640 sq. ft which equates to £265 £per sq.ft.. It will rent at £850 pcm and will provide a Gross Yield of 6%, you will have a large tenant pool to choose from with this unit and it would make a good first time buy or portfolio addition.

Friday 27 June 2014

Mortgages for Southampton Landlords to get more expensive

BoE 'dove' calls for early base rate hikes

One of the most dovish members of the Bank of England's Monetary Policy Committee (MPC) has said it will have to start raising interest rates in the coming months.
David Miles described the recovery as "resilient" and "sustainable" and said it was increasingly likely he would vote to hike rates before leaving the MPC next May.
Miles is the latest voice from the Bank of England to warn of higher rates to come, following fellow MPC member Ian McCafferty and the Bank's new chief economist Andy Haldane.
Earlier this month, governor Mark Carney said rates were set to rise "sooner than expected".
Writing in the Sunday Telegraph, Miles said rate increases due to economic growth were good news for the economy.
“Having bank rate at 0.5% is obviously not a normal or sustainable setting for monetary policy.
“We have had such low rates because the economy took a huge hit in the aftermath of the financial crisis of 2008.
"Until fairly recently we have not had any sort of sustained recovery from that. Now we have one.”
Miles said subdued inflation would enable policymakers to raise rates gradually. There would be no repeat of the “eye-wateringly sharp” increases of the late 1970s or 1980s, when the Treasury implemented a series of rapid rate hikes in order to keep a lid on price rises.
"This is more a case of scaling back the emergency medicine as the patient begins their recovery, rather than invasive surgery to deal with a sudden, life-threatening illness,” he said.
Miles said slow wage growth suggested enough “slack” remained in the economy for the Bank to keep rates on hold in the immediate future, reinforcing the market view that rates will start to rise around the time of November’s Inflation Report.
He also said it was “wildly unlikely” that interest rates would return to pre-crisis levels of around 5%.
He said record low rates had increased the gap between the official interest rate and mortgage costs for consumers, suggesting that the Bank would not have to raise rates back up to pre-crisis levels to keep inflation close to target.
Mr Miles joined the MPC during the depths of the financial crisis in 2009, and has never voted to raise interest rates.

Southampton Landlords beware when issuing notices

Study reveals 62% of landlord notices are incorrect


A tenant eviction firm has claimed that almost two-thirds of section 8 and 21 notices issued to tenants by landlords and letting agents are incorrect.
Landlord Action carried out a study of the last 200 instructions it received where the eviction process had already begun and found that 62% of the notices contained mistakes.
Managing director Paul Shamplina warned that mistakes in eviction notices are among the most common reasons for delays and increased costs when a landlord tries to recover possession from a tenant.
“I understand the need for landlords to consider every cost but I can’t stress enough that the notice is the most important part of a possession court case and the slightest mistake can end up costing a landlord significantly more than the cost savings - in extra legal fees, delays and lost rent,” he said.
The study carried out by Landlord Action found the top five reasons for notices being invalidated are: Incorrect expiry dates, failure to comply with deposit legislation, inaccurate accompanying rent arrears schedules, the method of how the notice was served, and typing errors on the notice.
“Over the last year, we have encountered an increasing number of problems with notices served by landlords and agents. As a result, our legal department has carried out a full analysis of our last 200 cases, not only to get a true reflection of how common this is, but also to find out exactly what mistakes are being made,” said Shamplina, “Unfortunately, some landlords and even agents are still making classic errors when drafting and serving notices. The worst case scenario for a landlord desperate to regain possession of a property is to be three months down the line and find they have to start the whole process all over again, costing them a small fortune in legal fees and lost rent. That’s why in cases where we are not instructed to draft the notices, we carry out a full ‘health check’ on notices/legal paperwork, before it is filed at court.”

Crackdown on rogue Landlords

Lewisham Council clamps down on rogue landlords

Officers from Lewisham Council, the police, gas and electricity suppliers have mounted three raids on a total of 25 properties inside two weeks in a determined programme to crack down on rogue landlords.
The raids uncovered four new criminal landlords, all involved in high level tax evasion, with at least 50 properties between them.
It also found three unauthorised structures to be demolished and a fourth outbuilding illegally used for residential. In one case a boarded-up restaurant had been converted into six substandard ‘studio’ flats.
Council officials also found five unlicensed houses in multiple occupation presenting critical health and safety hazards, including one severely overcrowded three-bedroom house occupied by 29 people.
Fifteen addresses had dangerous, stolen or unregistered utility meters while two cannabis factories running on stolen electricity, posing serious fire risks, were also found.
Police acted immediately to take down the cannabis factories. Legal action will now follow which will result in:
• unsafe premises being closed down
• hefty fines imposed on landlords involved in criminal activity
• recouping public money and tenants’ deposits that has been fraudulently obtained
• landlords forced to bring their properties up to scratch.

Wednesday 18 June 2014

Southampton Landords - Cosy 1 bed yielding 6.6% for under £100k

One bedroom top floorflat situated in the popular residential location of Highfield. The property comprises lounge, kitchen, bedroom and three piece bathroom suite. The propertyalso benefits from electric heating, communal parking and communal garden. It will let at £550pcm maybe a little more and is close to Southampton Uni and Portswood. These units are always in demand and fill the gap between a studio and a larger 1 bed unit. Worth a look!!

Saturday 14 June 2014

BOE to cap lending

BoE given new powers to cap mortgage lending

The Chancellor George Osborne announced last night he had given the Bank of England new powers to cap loan to incomes and LTVs.

In his Mansion House address yesterday evening Osborne said he wanted to protect those who own homes and aspire to own homes when “boom turns to bust”

He said: “If the Bank thinks some borrowers are being offered excessive amounts of debt, they can limit the proportion of high loan to income mortgages each bank can lend, or even ban all new lending above a specific loan to income ratio.
”And if they really think a dangerous housing bubble is developing, they will be able to impose similar caps on loan to value ratios – as they do in places like Hong Kong.”
The last crisis was an example he said of the “dangerous temptations” for politicians to “leave the punch bowl and keep the party going on too long”.
He added: ”The Bank of England should not hesitate to use these new powers if they think it necessary to protect financial stability.”
At the same event Bank of England governor Mark Carney used his speech to hint at an early interest rate rise and warn that would-be sellers were already deliberately holding back properties from the market in anticipation of higher prices in the future.
This he said was an early sign of ”extrapolative price expectations”.

Friday 13 June 2014

Southampton HMO landlords beware as councils enforce legislation

Unlicensed HMO landlord told to repay rent


Tuesday 10th June 2014
A case in Chester last week should strike fear into the hearts of landlords everywhere – a landlord renting out an unlicensed HMO has been told to repay more than £10,000 in housing benefit.
Jonathan Shingfield, 29, appeared in front of a residential property tribunal which fined him nearly £10,000 for endangering the lives of tenants and also ordered him to repay the rent he received.
The ruling said that he must repay £5,251.84 of housing benefit to Cheshire West and Chester Council
He received the money for three tenants who occupied bedsits in a converted
three-storey Victorian property in Louise Street, Garden Quarter, which he was letting without a licence.
Shingfield runs Manchester-based Shingfield Estates and was found guilty in October 2013 of nine offences under housing legislation, including illegal eviction, and was fined £9,590.
Alison Amesbury, the council’s interim head of housing strategy, said: “This is the first time that Cheshire West and Chester Council has taken formal action for these types of offences.
“We are delighted at the tribunal decision. It sends out a strong message that rogue landlords who put their tenants at risk will not be tolerated in West Cheshire.”
According to Chester First, the council’s private sector housing team brought the case against Shingfield after being contacted by a tenant from the Louise Street property. The man reported that his landlord had removed his bedsit door and glazing to his window in an attempt to force him to leave.
On inspection the property was found to be poorly managed and maintained with serious issues relating to fire safety, particularly with staircases and windows. It was also found to be running as an HMO – but not licensed.
Evidence from the court case was put before the Property Chamber Northern Residential Property First Tier tribunal on 27 May and the council was informed of its decision last week.

Landlord loses control of a London HMO

Landlord pays £20k as council takes over HMO


Friday 13th June 2014
A council has taken over the running of an HMO which it claims had 17 residents “living in dangerous and cockroach-infested” conditions.

Camden Council in London has issued an Interim Management Order on the property, called the Happy Vale Hotel, meaning that the authority takes over day to day management and undertakes a programme of repairs.

Camden’s environmental health officers reportedly found raw sewage which had caused a floor to rot and collapse, cockroach and mouse infestations in bedrooms, bathrooms and food preparation areas, fire doors wedged open and much of the emergency lighting not working properly, and extensive disrepair in some rooms.

The landlord, Stephen Paul Gethin, has now been found guilty of managing an unlicensed HMO and 14 other housing offences. He has been ordered to pay a fine and costs totalling over £20,000.

Camden Council says it may go on to seek to obtain a Final Management Order which will allow it to manage the letting and refurbishment of the property for five years. If that happens, its rental income from residents will be used to fund repairs and improvements.

In 2009 Camden became the first council in the country to use an FMO to take over the management of a poorly managed property in Kilburn.

Shortage in supply of rental stock

Recovery puts brakes on supply of rental homes


Friday 13th June 2014
Tenants are facing increasing competition as supply in the private rented sector contracts, according to the Association of Residential Letting Agents (ARLA).
The organisation’s latest quarterly research found that 59% of respondents reported more would-be tenants than properties available. This figure represents the second successive increase, from 46% in Q3 2013 to 54% in Q1 2014. Tenants are also less likely to haggle for properties, suggesting that the lack of supply is restricting the potential for negotiation. The number of respondents who have seen an increase in tenants haggling with landlords over rents in the past six months has fallen from 44% to 33%.
This rising competition for properties is compounded by the fact that over half (51%) of all landlords are not expecting to increase the size of their rental portfolios. At the same time almost one in five (17%) are expected to sell one or all of their properties in the next 12 months. This figure is the highest since Q1 2008, when the figure stood at 18%.
An additional factor in the shrinking pool of properties available is the declining numbers of ‘reluctant landlords’ – those who had to rent out their property because it could not be sold. Only 9% of ARLA members saw an increase in rental property coming on to the market for this reason. This is a 4% decrease on the figure recorded in the first quarter of 2014, and it contrasts with the figure of 93% recorded when this question was first asked six years ago.
Ian Potter, managing director of ARLA, said: “Supply in the rental sector is suffering from the buoyant housing market, and there is a concern that some tenants may now face increased competition for the properties they want. While the departure of reluctant landlords is positive for those who are now able to sell, there is a risk of a supply gap opening up in the private rental sector. Investing in new schemes such as build-to-rent could be one way to alleviate a lack of available rental properties if this trend continues.
“I would urge tenants and landlords alike to seek the expert advice of an ARLA agent as professional insight and experience is especially important in a competitive market.”

Thursday 12 June 2014

New How to Rent Guide launched by the Government

Housing Minister Kris Hopkins launches new 'How to rent' guide for private rented sector tenants.
The heat is on for the small minority of rogue landlords as Housing Minister Kris Hopkins launched a new on-the-move guide to give private rented sector tenants the need to know rental rights at their fingertips.
Mr Hopkins said that encouraging a new generation of well-informed tenants with easy access to useful and understandable information would help root out the small minority of rogues and raise the game of any landlords who don’t know what is expected of them. 

Monday 9 June 2014

Southampton Property news

Please click on the link below for the Southampton Property Report.

A landlords view

Rather than bashing buy-to-let landlords, we should help them to flourish

Comment: Landlords should be encouraged to buy – and build – more properties to ease the shortage of housing

Direct Line rent
The vast majority of private renters are happy with their home, with tenant satisfaction levels outpacing those in the social sector
The private rented sector is a great British success story. It’s the fastest-growing part of the housing market, doubling in size over the past 20 years and expected to more than double again over the next two decades. This growth is desperately needed to keep up with the demand for new homes as house prices rise and public investment for social housing is squeezed.
But it’s not just about the housing shortage: renting is a genuinely popular choice. The vast majority of private renters are happy with their home, with tenant satisfaction levels outpacing those in the social sector. And rents are increasing by less than inflation, according to the latest official figures – even in London, where properties are in the greatest demand.
Yet instead of celebrating these successes, there are increasing calls from some for more regulation of the rented sector. Read some of the proposals for compulsory licensing schemes, or for rent controls, and you could be forgiven for thinking that war had been declared on the British landlord.
These populist messages, calling for a crackdown on the private sector and ranging landlords against tenants, are divisive and unhelpful at a time when landlords need more encouragement and support, not less, to provide the new homes the nation so badly needs.
Of course, that’s not to say we don’t need rigorous enforcement for the small number of poor landlords who bring the sector into disrepute. But for the vast majority, already facing layers of regulation built up over years, a more flexible approach, coupled with a level financial playing field, would encourage them to invest in new property and so increase the choice on offer for tenants.
The Government has already recognised the importance of expanding the rented sector. Encouraging more institutional investment, as it wants to do with its £1bn build-to-rent fund and £10bn debt guarantee scheme, is one route.
But it will be just as important to support the 89pc of individual private landlords who control almost three quarters of our private rented stock. Most are only part-time landlords and most have just one property that they rent out – but we know that many of them would like to grow their rental businesses if they could.
If we could encourage just a tiny percentage of this army of small landlords to invest in another home or two, we could provide thousands more homes for tenants who need them.
So what will help them to do that? First, we need a more flexible tax regime, which addresses some of the inequities that mean private landlords are treated less favourably than owner-occupiers and the social housing sector. Measures such as rolling over capital gains tax when sale proceeds are reinvested in a rental home, a fairer treatment of capital expenditure on repairs and improvements and VAT relief on substantial work would all help landlords to invest to improve standards.
They would create a more dynamic market, boost the economy through spending on construction and refurbishment – and bring in more revenue for the Treasury through increased turnover of properties.
We’d also like to see more help for smaller landlords who want to develop newbuild schemes for rent. They could make good use of small plots of public-sector land or empty buildings that wouldn’t appeal to bigger developers, perhaps with the public owner retaining an interest in the land and a covenant ensuring that the new buildings remained as rental properties for at least 10 years.
Councils would not only gain a new-homes bonus but also council tax revenue, and new homes transform eyesores of derelict land. All at no public expense.
And we’d like more flexibility over turning houses into small shared homes. It’s argued that the rules in this area are needed to prevent areas becoming student “ghettos”. Yet in many locations shared houses, ideal for younger professionals and key workers, make an effective use of our housing stock.
We’d urge politicians to turn their back on the calls for rent control and more regulation, both of which would discourage rather than encourage the investment we need. Instead of a populist stampede towards more red tape, we need a streamlined regulatory system that enables effective enforcement where it is really needed.
In that way we will see a sector that increases at a healthy rate, the best way of driving up quality and choice for tenants.
A growing private sector has a key role to play in tackling the housing shortage. Rather than bashing private landlords, we should help them to flourish. That will be good news for tenants and landlords alike.
 Alan Ward is chairman of the Residential Landlords’ Association

Friday 6 June 2014

When is a studio flat not a studio - when it's a shoebox!

Shoebox 'studio flat' in London snapped up by renters within 16 hours

Apartment barely big enough for double bed and sink is rented for £170 a week
The scale of London's property boom was highlighted on Tuesday when a shoebox "studio flat" barely big enough to fit a double bed and a sink was snapped up by eager renters less than 16 hours of being advertised, despite costing £170 a week or £737 per calendar month.
Photographs of the flat, on Kember Street close to King's Cross, reveal a small single room into which has been crammed a double mattress, a small glass table and upright chair, a narrow wardrobe and a number of fitted kitchen units.
Despite its compact scale, Stephen Boochon from the estate agents Relocate Me said his firm had received about 20 emails and a larger number of phone calls since the property launched on the website in the early hours of Tuesday. "We had a fair bit of interest, I would say," he said, before the property was let later the same day.
Though no dimensions are included in the advertised details, there appears not to be enough room to fully open the front door or kitchen cupboards, and barely enough space to walk around the bed. Boochon said the property was owned by a local landlord, adding that it had a separate toilet and shower area.
six-bedroom house less than a mile from the studio flat is currently being advertised at £2,300 a week, or £9,967 pcm.

HMO landlord fined for breach of fire safety

Landlord pays the price for fire trap house


Friday 6th June 2014
A landlord in Bury, Great Manchester, has been ordered to pay almost £20,000 for breaching fire safety regulations.
Zohar Khan of Hampton Grove, Bury, was fined £17,000, ordered to pay Greater Manchester Fire & Rescue Service (GMFRS) £2,223 in costs, and a £120 victim surcharge, following a hearing at Bury and Rochdale Magistrates Court on 2 June.
The 45-year-old pleaded guilty to five offences under the Regulatory Reform (Fire Safety) Order 2005 at a house in multiple occupancy on Walmersley Road, Bury.
The court heard there were combustible items in the hall and landings, which would have helped a fire take hold and spread quickly.
There were no fire doors and holes in the ceilings which meant a fire in any part of the property would have quickly spread with smoke and toxic gases blocking the only escape route.
There was no way of warning tenants about a fire as the fire alarm was faulty and switched off and a battery operated smoke detector which had been fitted was in the wrong place and could not be heard in the bedsits.
Abigail Hudson, prosecuting for GMFRS, said: "A fire anywhere would quickly fill the only escape route with smoke. If the electrics failed, the lack of emergency lighting would mean the escape route would be dark and filled with smoke becoming impassable." see full article at

Southampton HMO landlords beware

HMO landlord ordered to pay £39,000


Friday 6th June 2014
A Leicester landlord has been ordered to pay almost £39,000 in fines and costs for failing to obtain licences for three houses in multiple occupancy (HMOs).
Harishbhai Rambhai Patel was prosecuted by Leicester City Council and pleaded guilty to 12 offences under the Housing Act 2004 relating to the three unlicensed houses in the Highfields area of Leicester.
Magistrates fined Patel £10,000 for each of the three houses. He was also fined £500 for failing to produce necessary documents and a further £4,000 for eight breaches of the Management of Houses in Multiple Occupation (England) Regulations 2006.
On top of that magistrates ordered Patel to pay £4,124.15 in legal costs, along with a £120 victim surcharge. In total, he will have to pay £38,744.15.
Environmental health officers from the council visited two of Patel’s properties in Evington Street following a fire at 11 Evington Street in May last year. They discovered neither house met the fire safety standards needed.
Officers visited the third property, in Gopsall Street, in September following a complaint. They found it had a faulty fire detection system, damaged fire doors, torn carpets, cracked plaster and broken windows. Ten people were living there at the time.
The council said Patel had since carried out repairs to bring the property up to the correct standard and officials are dealing with his application to get a licence for the house.
Leicester assistant mayor for neighborhood services Councillor Sarah Russell said: "Proper licensing for HMOs is there to ensure the safety of residents and landlords who fail to do so are putting tenants at risk. As this case shows, landlords face prosecution and heavy fines if they fail to comply with the laws – laws which have been put in place for good reason, to ensure that multiple-occupancy homes are in a fit state"