The Landlord Blog
Own Empty Property or First-Time Buyer? Take Advantage of Interest-free Loans.
Empty houses are a hot topic right now. This is primarily due to the fact that, as per the charity Shelter, “around 1.8 Million households are on waiting lists for housing”.
Add to this the anticipated delay in the process of any and all building projects during the recession and the issue may get worse before it gets better.
According to the Guardian, councils of several hard-hit regions are resorting to a hardcore win/win remedy: interest-free loans for actual renovations.
Cornwall Plans Include Loans
In Cornwall, a part of the country with one of the largest housing shortages, first-time home buyers who purchase homes that have been vacant for over six months (and are therefore deemed long-term vacancies by local council) will receive the funds only after the purchase process is complete. (In this manner, the monies would not be able to be applied towards a deposit.)
Also, current owners can cash in on some of this aid. Loans of up to £15,000—again, with 0% interest—are available to owners of two-bed properties if they’ve been vacant for at least six months. One-bed homes stand to receive half of that, at £7,500. Caveat #1: they’ve got to need “substantial work to make them habitable”, notes the Guardian. Caveat #2: the now-refurbished homes must be made available to someone on the council’s waiting list of 18,931 households.
If the loans aren’t snatched up, a compulsory order of purchase is next on the agenda for long-term vacancies throughout the affected areas.
Cornwall isn’t the only region holding out the loan enticements. Kent, the Bristol city councils and some Scottish authorities either have adopted similar strategies or are looking into such schemes.
In a bid to be realistic, the Cornwall authority admits there may not be many takers. They reason that, even with the added draw of a loan that’s provided to improve the property, “few lending companies are willing to lend to buyers of such homes”. Note: Insurance Protector Group is among a select group that does provide such cover. Do a Google search to locate others.
Mansions “Unloved”, As Well
Standard-sized houses and apartments aren’t the only properties affected.
Two years ago, the Guardian ran a story on “unloved” unlived-in mansions, many of which were left to crumble by offshore owners who are using the property merely as an asset.
Mansions may represent only a small slice of the pie, but, due to their size, these are usually the most obvious–and sometimes the most distressing– to neighbours.
“…[A] pair of seven-storey mansions in Park Lane across the road from Hyde Park” in otherwise lovely Mayfair, London, notes the Guardian piece, stick out like a sore thumb.
“I feel it is a tragedy,” says a council official. “Many of these buildings have wonderful histories, and are part of our heritage. For them to be left vacant and unloved for a such a long time, pawns in a real-life game of Monopoly, is disgraceful.”
An interesting aside is that, according to the Guardian, “a council tax exemption on any dwellings that are vacant for up to six months” doesn’t help the situation, offering an incentive for property to stay vacant.
Vacant mansions are, of course, only the tip of the iceberg.
There are 920,000—almost a 1 million—vacant homes across the UK, per Empty Homes. Because they’ve been vacant for so long, some—as many as hundreds of thousands–are being termed “long-term empty”.
About the loans, apparently there haven’t been enough takers. Cornwall council is threatening to hit long-term property owners with an enforced purchase. The Guardian states that “if homeowners refuse to take advantage of the authority’s loans, and then fail to bring properties back into use with their own money, the council will consider using compulsory purchase powers.”
How You Can Help
If you aren’t in a position to revive a sleeping property but want to help those who can investigate the situation to get a clear picture of what’s involved, this might interest you: the Guardian is looking to receive photos of abandoned houses, and other information, to study the impact the blight has on neighbours and to “see what went wrong”. Send your story and data to homes.guardian@googlemail.com, putting Empty homes in the subject area.
Whether you can help salvage an empty house, yourself…or send in details that might help flesh out the issues at stake…you, as a member of the housing community, can always make a difference.
-David Slade
- Photograph courtesy of Jim Dyson/Getty Images – the Guardian.
“All the Little Jobs.” On Letting Property for the First Time.
As a first-time rental landlord, you will have numerous questions. Shall I install smoke alarms in every room? Do I need builders insurance? And (most important) most tenants will just be happy to have found shelter, and won’t bother me much, right?
As far as the latter is concerned, it depends on the tenant. For the most part, ‘though, you are right. Looking for the “perfect” house–to buy or to let–is a bit like finding a needle in a haystack. Once the ideal property is found, buyers and renters are willing to tend to minor details themselves…and to let other things go.
In any case, before your tenants move in, there are many little things that will need looking after.
For starters, as to whether you should install smoke alarms in every room, a “Top Contributor” to a forum on this topic by the name of “Masked Landlord” has this piece of information for first-timers:
“If you are letting to a single family, you don’t HAVE to have the fire alarms ([these are] only for HMOs).” HMO’s, for the non-initiated, means House in Multiple Occupation—see this link for further information.
You might, however, wish to note that Letprotector and other insurance specialists are quick to say that there are enough hazards associated with unoccupied property and wouldn’t like to see you up the ante by throwing caution to the wind. To be on the safe side, you should install fire alarms.
And yes, you will need builders insurance, although you might want to consider more than the standard policy. For instance, Letprotector’s policy covers property owners’ liability, which can help cover the cost of third parties injuring themselves whilst on your property. (Ask your underwriter for the exact sort of cover your situation might call for.)
Of course, sometimes your model tenant turns out to be fussy. If that’s the case, what, exactly, might be on his or her laundry list?
The Guardian’s Money Blog recently ran a real-life piece by a landlord who was relieved to be letting her flat, and renting a bigger one. She had hopes that the economy would stabilize in the near future and that she’d make a profit when she sold. “…I’m going up the property ladder the best way I can,” she said.
First things first: she had to leave her apartment spic-and-span.
“Before I hand over my keys to the lettings agent,” she said, “I have been told I have to make sure the flat is cleaned professionally (especially the oven and the carpets…); the idea..is…[that it is] given over to the tenant as I would like it returned to me.”
That exercise leads to her giving her flat a quick once-over and spotting the many repairs she’d never got around to making. “Out comes the tool box
that I was given by my folks… and I begin to do all the little jobs I have been putting off for months.”
For example: “The broken curtain rail that has been wonky for years really could do with fixing. I don’t want it falling on my tenant’s head, knocking her out cold and leaving me facing a court case…”
Just when the landlord thinks all is hunky dory, the rental agent calls with a list of requests: blackout curtains in the bedroom; a new colour on the walls and proof that her flat’s energy consumption is appropriate.
The tenant is within her rights to ask these things, and the fact that no one has signed on the bottom line yet will likely assure the items are seen to. (Before all is said and done, the apartment will be photographed as well, documenting all marks and damage as proof that the tenant didn’t cause these.)
The only thing this landlord chooses to come back with is a request that the colour be “easy on the eyes”.
These last-minute requests can seem tiresome, but they will ensure that you and the tenant aren’t at odds about this ideal arrangement which, really, was like finding a needle in a haystack…remember?
For the full story, go here:
-David Slade
Graphic courtesy of the Guardian’s Money Blog/Getty Images.
Empty Brighton House Ruffles Community Feathers; May Result in Compulsory Purchase.
Brighton, sometimes referred to as “London-by-the-sea”, has recently seen a period of gentrification (when wealthier people purchase or rent property in lower income areas), in which much of the formerly fashionable image of the area has made a resurgence.
Brighton, very much an artist’s haven, is well known for having its housing and media issues intertwined. As part of the art community’s yearly showcase, artist’s houses are opened to the public and viewed as galleries, where occupants’ works are sold.
And now, a very public “open house” of sorts is taking centre stage in the news as neighbours and empty housing specialists criticise the fact that a house has stood empty since 1979—the year of Margaret Thatcher’s inauguration as Prime Minister.
The house, 87 Chester Terrace, built in the 1860’s, is not without a landlord. A Mr. Derek Burns has owned and lived in the property for years. In fact, he was born in the house. He doesn’t, however, reside there at present.
“The only occupants of a three-bedroomed family home in Brighton are the foxes in the overgrown, rubble-strewn garden,” we read in a BBC News – Sussex entry.
What irritates his neighbour, Julia Powell, is the unsightliness of the place…the rubbish and overgrowth is covered by plastic sheeting. (She also decries “the huge shame” that it is empty.)
And what irritates community activists, such as City council leader, the Green Party’s Bill Randall–a former chair of Shelter’s National Housing Aid Trust–is that no headway has been made in attempts to elicit Mr. Burn’s cooperation to bring it back into use.
Randall admits that the process for doing so is difficult, and that broken promises by Mr. Burn have further stymied efforts.
The only solution the council feels they are left with is a compulsory purchase–again. “There is a public inquiry coming up—we hope,” the city council leader said.
The original Compulsory Purchase Order (CPO) was ordered in 1996, but the council never enacted it. Instead, they agreed to hand over £55,000 to Mr. Burns, “to carry out refurbishments”. These were never completed.
The situation illustrates a much larger issue.
“Chester Terrace is one of 933 homes in Brighton and Hove which have been empty for more than six months, according to the Empty Homes Agency, which campaigns to bring empty properties back into use,” the blog notes.
Across Sussex alone, there are 5,500 houses which, at present, stand empty.
David Ireland, chief executive of the Empty Homes Agency, bemoans the fact that Chester Terrace and other houses like it in the tony “London-by-the-sea” are the tip of the iceberg. “The real scandal is not just this house, but that we have…got 300,000 other homes like this across England,” he says.
-David Slade
Squatters in Bath…and a Few Takes On the U.K. Housing Crisis.
Since post-World War II, the city of Bath—now a World Heritage site—has suffered from a lack of housing. To tackle the problem after the war, portions of the area were cleared and redeveloped. The more modern architecture was “…often at variance with the local Georgian style,” we read in Wikipedia.
Nevertheless, “[i]n the 1950s[,] the nearby villages of Combe Down, Twerton and Weston were incorporated…to enable the development of further housing, much of it council housing.”
Now Bath has become notable for another housing issue. Last month, the BBD reported that squatters had taken over an empty shop in Bath.
“The former Jane Norman store in Union Street has been covered with advertising posters by the group, which is selling handbags and accessories,” we read in BBC News in Somerset.
The landlord of the former women’s fashion retailer isn’t taking it lying down; they’re pursuing legal action to evict the squatters.
What is of particular concern to a retail property specialist in the area is that these occupants: “…pay no rates[;] they pay no rent, they pay no VAT, they pay no National Insurance.”
A spokesperson for Squash (Squatters Action for Secure Homes) has a different outlook on it. Joseph Blake believes that, when squatters commandeer one of the 725,000 empty properties in the U.K. like this, they “do them up”, turning them into functional property again—buildings that might conceivably give back to the community.
But what’s wrong is wrong, Blake stresses. “I wouldn’t back squatters going in and taking something that the owner’s got a use for.”
George Monbiot, a well-known Guardian columnist, took on the analysis of the housing crunch. He believes there is a supply- and-demand problem. “Households are forming at roughly twice the rate at which new homes are being built,” he wrote.
Also—and this, Monbiot claims, is a well-guarded societal secret—a contributing factor is that homes in England are “under-occupied”. That is to say, the wealthy live in houses with spare rooms—rooms which he believes should be allotted a housing footprint, similar to the ecologically-minded carbon footprint.
“Your housing footprint is the number of bedrooms divided by the number of people in the household….” he states. “…[I]t reminds us that the resource is finite, and that if some people take more than they need, others are left with less…”
There are dissenting voices. “…[T]he real opportunities for better use of housing lie in using empty buildings[,] not spare rooms,” says the author of the “Unlocking The Potential of Empty Homes” blog.
David (no listed last name), the blogger and CE of the charity, Empty Homes, continues: “…across the UK there are close to a million empty homes, and enough abandoned commercial buildings that could be readily converted into half a million new dwellings.”
David believes there is no housing shortage and that new houses aren’t the solution, partly because the market’s in a slump. “House builders aren’t building,” he notes, “because few people are buying.”
“[New houses are] judged by the market to be too expensive, and by lenders to be too risky.” David notes. (This, he explains, is due to overpricing.)
So what’s the solution?
Since prices aren’t likely to drop, he explains, “the state [will likely] construct new ways for people to afford [overpriced] homes…while tak[ing] the risk of the inevitable house price drop away from lenders.”
And the good news is that, if and when house building accelerates, it would most likely create an oversupply of houses…which would, in turn, result in lowered prices… and in much-needed affordable housing.
-David Slade
Photo courtesy of BBC News – Somerset
