ROOF Blog

The Council of Mortgage Lenders (CML) reported yesterday that buy-to-let lending rose by 10 per cent in the three months to September, compared with the previous three months, after a period of near-hibernation for landlords who were hit particularly hard by the mortgage drought.

The CML said that buy-to-let demand for new purchases was ‘appreciably stronger’ than for remortgages, amid continuing lending constraints that force landlords to stay on their existing deals.

The CML pointed out that although the slight uptick in buy-to-let lending was welcome, it was from a low base.

Michael Coogan, director-general of the CML, said: ‘At this stage the recovery is modest, but the figures show that buy-to-let is here to stay.’

Crisis, the charity for homeless people, is launching a campaign to resist unpopular plans by the government to ask housing benefit claimants to pay back up to £15 a week they are allowed to keep if they negotiate cheap housing deals.

The Department for Work and Pensions had planned to end this after calculations showed it could bring in £160m.

For some of the least well-off, the change could amount to £15 a week, reducing by a fifth the cash in hand of someone receiving jobseeker’s allowance of £69 and leave some of the poorest families across the country some £780 worse off over the year.

Leslie Morphy, Crisis chief executive, called on the government to reconsider, saying: ‘This proposal would have a grave impact on some of the poorest households.

‘It’s not even likely to make the savings the government hopes, because claimants will no longer have an incentive to seek cheaper properties and landlords may simply raise rents to meet the maximum local authority level.

‘For people who are already struggling to make ends meet, losing a huge chunk of their income will make it even harder to get by and we are worried that this could lead to an increase in debt, rent arrears and homelessness.’

Struggling buy-to-let landlords are eating humble pie when it comes to finding tenants.

Checks and references traditionally carried out on tenants to assess their reliability in paying up are now being reversed as renters seek assurances the owner of their new home is legitimate and not on the verge of being repossessed.

David Underwood, a lettings consultant at Darwoods in St Albans, Herts, has noticed a ‘marked shift’ in emphasis:

‘Tenants have been far more interested in landlords’ backgrounds and are asking more questions about where their deposit is being held,’ he says.

It would seem that tenants’ concerns are well founded. When the Council of Mortgage Lenders (CML) started compiling buy-to-let data in the second half of 2005, only 200 investment properties were in mortgage arrears of three months or more.

By the first half of this year, this had soared to 5,400. Repossessions of investment homes also climbed, from 400 to 2,800, during the same period.

Recent figures from the Association of Residential Lettings Agents and National Landlord Association have found 65 per cent of estate agents experiencing an increase in the number of tenants struggling to pay their rent, and as many as one in three landlords have tenants in arrears.

Early intervention resolves more than three-quarters of antisocial behaviour cases, whereas using anti-social behaviour orders resolved just 0.1 per cent of cases, according to research by Housemark. Top performing landlords also took just 45 days to resolve antisocial behaviour cases, compared with an average of 61 days.

The number of tenants struggling to pay their rent is rising, according to the Association of Residential Lettings Agents (ARLA). Around 65 per cent of agents have seen an increase in renters falling behind on their rent during the past six months, while 93 per cent said they had seen a rise in the number of tenants haggling with landlords about the level of rent. ARLA said the increases were not just about tenants experiencing financial problems, but were also likely to be due to people cashing in on falling rents.

The Association of Residential Lettings Agents (ARLA) has also questioned the new repossession proposals for rented property. It has called for the government to be clearer about its intentions to implement the schemes into law ‘at the next opportunity’ saying the timeline is far too vague. It also says that seeking to notify tenants seven weeks before repossession hearings could encourage tenants to break their contracts and seek new landlords too early.

The (RLA) is warning buy-to-let investors that lenders may try to change their borrowing rates as property values fall. The RLA says some mortgage agreements allow lenders to alter their rates if the loan to value (LTV) changes significantly. Alan Ward of the RLA said lenders may look for large repayments of capital as well as charging more expensive interest rates.

The National Landlords’ Association is warning landlords on the dangers of cannabis factories in their rental properties, adding they have a responsibility to make sure they are aware of what is going on inside their property. The NLA says the damage caused to a property used as a cannabis farm can be ‘catastrophic’ with internal walls removed, and repairs running into tens of thousands of pounds.

The needs of vulnerable people will be protected in the Tenant Services Authority (TSA) regulatory framework. Speaking at the national sheltered and supported housing congress, head of the TSA Peter March said that coordination between tenant, landlords and their stakeholders is key to ensuring vulnerable tenants get the best service possible. The TSA consulted with more than 27,000 tenants to develop the standards which will apply to all social landlords from April 2010.