Council of Mortgage Lenders publish new guidance on Buy-to-Let arrears

The Council of Mortgage Lenders (CML) have published new guidance to lenders to ensure that they act fairly when dealing with Buy-to-Let arrears.

The CML guidelines for Buy-to-Let mortgages come into effect in September but they claim that much of these guidelines are already being upheld.

The CML guidance includes the lenders options, implications for tenants and non Buy-to-Let tenants. For more information please click here CML Guidance on Buy-to-Let Arrears.

Landlords could be forced to pay tenants water bills

According to an article published by The Times newspaper residential landlords could be made liable for unpaid water bills left by departing tenants under a government review of water charges.

Ofwat have drawn up plans and submitted them to the Walker Review which is reviewing charging and metering for water and sewerage services on behalf of the Government.

The read the full Times article click here Landlords could pay tenants water bills.

The Government outlines the future for Landlords and Letting Agents

The Government has published it's response to the Rugg Report in it's publication "The private rented sector: professionalism and quality - The Government response to the Rugg Review Consultation".

The 37 page report lays out the proposed changes that Landlords and Letting Agents face if this is turned into law. Some of the main highlights are:

• A national register of Private Landlords


• Compulsory registration of Letting and Managing Agents


• Mandatory written tenancy agreements


• Assured shorthold tenancy limits raised from £25,000 to £100,000


• Greater protection for tenants whose Landlord defaults on mortgage payments


• Greater focus on how Local Authorities work with the Private Rented Sector


• Encouraging institutional investment into the Private Rented Sector

Of most immediate concern to Landlords will be the national register. Under the proposals Landlords will have to register themselves and each property they own - each year. The plan is to charge Landlords around £50 a year to register. It is unclear what this data will be used for and how freely available it will be.

If this scheme is used to weed out irresponsible and bad Landlords then many may support it but all too often these Landlords simply disappear beneath the radar and carry on as before. If the scheme is to benefit good Landlords then it will require a serious amount of policing. The question is who is going to police the scheme and what penalties are there for Landlords who fail to comply?

The Report makes it clear that one aim of the Register is to "drive up standards". The Report asks Landlords for their views on this and other proposals. Our suggestion to every Landlord is to fully read the Report and to submit your views to the Government. In our opinion it is vital that as many Landlords and Letting Agents as possible make their views known.

You have until Friday 7 August 2009 to make your views known. The Report contains both the postal and email addresses where your responses can be sent.

For a copy of the Report please click here The Government Response to the Rugg Review

If you have any comments you wish to make to NetRent.co.uk please email us at enquiries@netrent.co.uk

Government Plan to Licence Landlords and Letting Agents

This morning in a front page 'exclusive' the Times newspaper announced that the Government is set to introduce mandatory licencing of Landlords and Letting Agents throughout England and Wales. Scotland introduced mandatory licencing of Landlords in April 2006.

The Times claims that anyone letting a residential property would have to pay around £50 to register with a national body. Registered Landlords would then have to comply to certain standards. Landlords who fails to carry out repairs or intimidate tenants could be struck off.

These reforms are to be set out in a Green Paper in the next 10 days.

At the same time Margaret Beckett (pictured), the Housing Minister, also plans to introduce statutory legislation for Letting Agents. Ironically the Association of Residential Letting Agents (ARLA) is today launching it's own voluntary licencing scheme.

According to the Times Simon Gordon, of the National Landlords Association, said: “We can see the thinking behind this but we need to see the details and be reassured that this is not simply a mechanism for tougher regulations.”

NetRent.co.uk have been predicting such a move for some time and we believe that much tougher regulations will be imposed. There has been an explosion in the number of Landlords in the past 18 months fuelled by the influx of so-called accidental Landlords.

In addition many new Letting Agents have sprung up, many started by Estate Agents who cannot sell sufficient property and have turned to letting to make ends meet.

It is clear that the current legislation affecting Landlords is being ignored by a number of Landlords, either deliberately or through ignorance of the law. The majority of Landlords do comply with the law and provide decent housing, but there are an estimated 1 million Landlords now and even a small percentage of rogue Landlords adds up to a very significant number.

We will, of course, keep you informed of the progress of this proposed legislation. If you have any comments please visit The Landlords Club, our free Forum for Landlords and Agents. For more information please read The Times article.

The Budget and Private Landlords

On Wednesday the Chancellor Alistair Darling will deliver his Budget. We predict he will have a lot to say about how the Government pledges to help businesses large and small, of how much help has already been given and how business is the very life blood of the UK.

However, we predict that there is one group of businesses that will not even get a mention in the Budget - Private Landlords.

Before the Credit Crises there were already over 800,000 private residential Landlords in the UK. This figure has been considerably swelled by the huge increase in 'accidental Landlords'. These are people who would like to sell their home but are unwilling or unable to sell and are therefore now renting out their property.

The sudden increase in the number of available properties to rent created by these 'accidental Landlords' is beginning to seriously depress rents in many areas of the country. But what choice do these accidental Landlords have? They cannot sell their property at a fair market value and even if they could most potential buyers cannot persuade the Banks to lend to them. But their effect on existing Landlords is profound. In addition to this influx of new Landlords the Government and the Banks have seemingly abandoned private Landlords.

All Landlords, accidental or not, are running a business. Some run huge businesses with hundreds of properties, many have just one property, but they all are running businesses according to the Taxman. So why is it that Landlords are the forgotten businesses of the Credit Crises?

The Government has pumped £billions into the lenders that just 18 months ago offered Landlords a range of over 3,000 Buy-to-Let mortgages. The £billions that have rescued the banks from their greed are our £billions. But those same lenders who lent their money to hair-brained schemes all over the world are now offering less than 175 mortgages to UK Landlords. Last week the Cheltenham & Gloucester (part of the hugely expanded Lloyds/HBOS group) announced radical changes to their Buy-to-Let mortgages.

In an already devastated Buy-to-Let market the move by Cheltenham & Gloucester is shocking. What they and the other Buy-to-Let lenders are saying is that they don't care what happens to the residential lettings market. The Government, who actually own or control the Banks that provide the bulk of Buy-to-Let lending in the UK, are standing by whilst the businesses of nearly 1 million landlords and the homes of over 3.5 million privately renting tenants are threatened.

The Government have reacted to media pressure and have promised to help tenants who face eviction when their Landlord defaults on loans. But the silence about what help they will offer Landlords is deafening.

According to some research there are now over 70 pieces of legislation affecting Landlords. From this month HMRC (the Taxman) has extra powers that it intends to use against Landlords. Landlords are reporting that more and more tenants are defaulting on their rent. And on top of this the Banks are simply walking away from the lettings industry.

Private Landlords are businesses like any other, so Mr Darling we have a simple question for you - where is the help for Landlords?

We will find out his answer on Wednesday.

Conservative Party pledges to scrap HIPs

Shadow Housing Minister Grant Shapps has reconfirmed his pledge to scrap Home Information Packs (HIPs) in the Conservative Party's new housing green paper.

He also plans to move Energy Performance Certificates (EPCs) to the end of the house buying process if they win the next election. Shapps said "We will scrap the discredited HIPs, liberating EPCs to genuinely help people improve the environmental standing of their property".

Another worthwhile petition

A number of Landlords have contacted us about the Local Housing Allowance expressing their concern and anger that direct payments of rent have now been stopped. In their place payments are being made to tenants and in too many cases this has meant that the Landlord never sees the rent.

We are pleased to bring to your attention a petition on the Number 10 website which calls for an end to this system of payment.

If you would like more information and would like to add your name to the petition please follow this link Reinstate Landlord Direct Payments.

Obviously, like all petitions, the more Landlords that sign this petition the more likely it is that the Government will listen.

Pass the Rate

Our business partners Pebble have organised an on-line petition to protest at the way banks are failing to pass on the reductions in base rates to Landlords.

NetRent.co.uk is pleased to support this initiative. The Government has consistently stated that it wants to see the banks support small and medium sized businesses and yet it has done nothing to help the 800,000 plus Landlords in the UK.

The Government is now effectively in control of most of the major Buy-to-Let lenders including HBOS and Northern Rock. It has facilitated the sale of brands like the Bradford & Bingley and Alliance & Leicester but all that has done is make the situation worse for Landlords. We have seen the number of Buy-to-Let mortgage products reduced from over 3,000 to less than 175. At the same time lenders have increased their rates in real terms and significantly increased the costs associated with Buy-to-Let mortgages.

The Government has pledged support for tenants who are made homeless from repossessed property but they have been silent about the one of the major causes of repossession - the cost of Buy-to-Let mortgages. It is our belief that even modest help for Landlords would prevent the majority of these repossessions happening in the first place.

We call on the Government to force the banks they have bailed out to begin lending to Landlords again. At the same time those banks should pass on the rate cuts in the same way as they are being told to do to residential customers. In short, the Government must ensure that an element of competitiveness returns to the Buy-to-Let mortgage market. Without it many more Landlords will face financial ruin and many more tenants will become homeless - and that will benefit no-one.

For more information about the Pass the Rate Petition please click here - Pass the Rate.

If you have any comments please email NetRent.co.uk at enquiries@netrent.co.uk

How will the Northern Rock announcement affect Landlords?

Yesterday's announcement that the Government intends to use Northern Rock to pump £14billion of mortgage lending into the UK market could kick start the mortgage market.

Landlords know just how desperate the Buy-to-Let mortgage has become over the last 18 months and whilst it seems that none of this £14billion will end up being directly lent to Landlords there is little doubt that it can only help the overall mortgage market.

As with most things that the Government do the devil will be in the detail but if £14billion is really going to be pumped into the mortgage market this will be a very significant step. Alistair Darling confirmed that Northern Rock would be offering mortgages up to 90% which is of huge importance to first time buyers. It has been calculated that this £14billion will fund around 46,000 average mortgages.

This initiative is likely to push other lenders to offer competitive deals as they will not want to be left behind. The hope is that this will generate increased activity in the mortgage market. In itself this will not help Buy-to-Let Landlords as none of this money is aimed at Buy-to-Let, but it is probable that lenders will eventually begin to look to other ways to generate income and so, in time, lenders will return to Buy-to-Let.

Most commentators think that even if the residential mortgage market recovers quickly it will be some time before Buy-to-Let and Commercial lending returns to anything like the previous levels. It is our belief that competition in the Buy-to-Let market is unlikely to return during 2009 and probably well into 2010. It is probable that if residential lending returns to some normality then lenders will turn their attentions to commercial lending next. Buy-to-Let lending is likely to be a distant third. Even then it is highly unlikely that we will ever see a return to the situation of just 18 months ago when there was around 3,000 Buy-to-Let mortgages available.

But Landlords who wish to buy properties should be aware that the prospect of homeowners returning to the market is likely to reduce the amount of properties available for Buy-to-Let. At this moment Landlords have a golden opportunity to secure bargains on both new and second hand houses.

Through our business partners Accuro we can offer thousands of brand new homes and apartments at up to 25% discount from recent valuation and most of these properties come with 12 month rental guarantees. Finance, subject to status, is available on all these properties. For more information contact us now on 01352 721300 or email us at enquiries@netrent.co.uk. Please also check the Rental Property for Sale section of our website.

There is a long way to go before any normality returns to the housing market but perhaps we have seen the first real signs of an upturn.

Win a BMW Mini

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This amazing offer is available to every landlord in the UK and Utility Warehouse are also giving away a BMW Mini in a fabulous prize draw.

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To enter the FREE prize draw to win a BMW Mini please either email us at enquiries@netrent.co.uk or ring NetRent.co.uk on 01352 721300