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Friday, July 31, 2015

RICS - Private Rented Sector Code of practice revised

The code of practice produced by the RICS was revised in July 2015.  This is an updated code of practice that includes legislative changes that will be important for anyone within the Private Rented Sector (PRS).

RICS – Private Rented Sector Code of practice

The code is intended for use by landlords and lettings and management agents in the PRS. You can download the document on the professional guidance codes of practice on the RICS website.

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Wednesday, July 29, 2015

Paragon boosts profits

Paragon Group the specialist buy-to-let mortgage lender has seen it's profits rise by over 10% on the back of the booming residential investment market.

The group which also increased it's market share reported £816.5 million of buy-to-let completions to date.

The pipeline of new mortgage business stood at £865m at the end of the quarter compared to £353m at the same point in 2014.

Mortgage Search - expert broker advice - exclusive rates

Tuesday, July 28, 2015

Buy-to-let hotspots revealed

For those landlords that are swayed by where the buy-to-let 'hot money' is going Barclays have very kindly released there annual 'hotspot' top 20.  Based on a survey of 5000 landlords it is a limited but interesting insight on what is going on in the wider investment market.  I particularly like the average rental figures which come directly from a buy-to-let application giving them a realism that much rental data I have seen lacks.  For more data on average rents have a look at the index of private housing rental prices compiled by the ONS.

Rank (by volume of Barclays completed buy-to-let properties) Q1-Q2
Average rent (of Barclays Mortgages completed buy-to-let properties) Q1-Q2 2015

Monday, July 27, 2015

Auction results show yields falling

The latest results from Allsop's residential auction in London on 16th July.  The interesting thing from a buy-to-let perspective is that they indicate that buy-to-let yields continue to be compressed and have dropped below 9% and significantly below the 11% rental yield that was recorded in 2012.

Mortgage Search - professional advice - trusted provider

Saturday, July 25, 2015

Building consents compared to need

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Large scale converted mill opportunity - Manchester

This large scale mill conversion 5 miles south east of Manchester city centre may be of interest to some landlords who wish to scale up rapidly and have access to large scale finance.

Victoria Mill, Houldsworth Street, Reddish, Greater Manchester, SK5 6AR

A Residential Investment Opportunity with
41 out of 180 apartments unsold presenting some arbitrage opportunities.

Rent passing: £306,900 per annum and fully let

Current Ground Rent Income: £31,576 per annum

Potential Ground Rent ERV: £43,525 per annum

Approximately 235 car parking spaces

Total ERV: £350,042 per annum

Offers are invited on the following basis:

       1.  Freehold + 41 unsold leasehold apartments (to including associated car parking)
       2.  41 unsold leasehold apartments only
       3.  Freehold / Ground Rent investment only (to include associated car parking)

Mortgage Search - professional advice

Wednesday, July 22, 2015

Rightmove's HPI at 5.1%

Right moves House Price Index for July 2015 puts their monthly asking price growth at 0.1% and annual growth at 5.1%.

That puts the current average asking price at £294, 542.

The UK's biggest property portal says it has seen a 'sharp drop' in new seller numbers, down 10.6 per cent on this month last year.

Miles Shipside, Rightmove's housing market analyst, commented
“The forthcoming extra tax burdens on buy-to-let investors may help to tip the balance in favour of first-time buyers, but the consequent drop in rental property supply could push up rents.

“More supply of affordable starter homes for the growing demand from both renters and buyers is required, which means more new build for both sectors to meet the country’s current and future housing needs.

“The challenge for government, planners and developers is how best to ensure the right properties are built in the right locations and at more affordable prices.

“This will however depend on addressing capacity constraints in the building industry, the price of land for housing, the consistency of funding for key players in the construction sector and the overall stability of the housing market and the wider economy.”

Download Rightmoves HPI for July 2015

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Tuesday, July 21, 2015

Struggling to find a BTL to fits your rental income?

If you are you struggling to find a buy-to-let mortgage that fits your rental income, one of these just might help.

Buy-to-let mortgages with a rental calculation at the pay rate:
  • Fleet Mortgages – Life time Tracker 125% at 4.07%, 75% LTV, 1% completion fee
  • Axis Bank - 5 year fixed 125% at 4.09%, 75% LTV, 1.5% completion fee (must have 3 Existing BTL properties & restricted to South East England)
  • Aldermore - Term Tracker 125% at 3.93%, 75% LTV, 3% completion fee
  • Foundation Home Loans – 5 Year fixed 125% at 4.39%, 75% LTV, 2% completion fee
  • Precise - Term Tracker 125% at 3.70%, 70% LTV, 2.5% completion fee
  • Hinckley & Rugby BS– 135% at 3.09%, 75% LTV, £999 completion fee (max loan £300k + affordability assessment)
  • Saffron BS – 3 Year Discount, 125% at 4.69%, 75% LTV, 3% completion fee (this rental calculation must fit the loan + the fee) 
  • Saffron BS – 3 Year Discount, 125% at 4.89%, 80% LTV, 3% completion fee (this rental calculation must fit the loan + the fee)
IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.  
Please check our website regularly to see the most up-to-date products available.
Tel: 029 2069 5446
Your home may be repossessed if you do not keep up repayments on your mortgages.  
The Financial Services Authority does not regulate some forms of mortgage.

Wear and Tear Allowance Consultation Document

HMRC have published a consultation document following George Osborne's Summer Budget 2015 announcement on the abolishment of the 10 per cent Wear and Tear Allowance.

The HMRC want to get the views of landlords.

The document outlines the current proposed changes

Read HMRC doc, - Replacing Wear and Tear Allowance with Tax Relief for Replacing Furnishings in Let Residential Dwelling- Houses and then let them know your thoughts.

CEBR push house price growth forecast up

The Centre for Economics and Business Research has revised this years house price growth forecast,  from 1.5 per cent to 4.7 per cent.

The think tank put's its changed forecast down to the “chronic lack of properties being put up for sale”.
The CEBR say the number of new houses being built is continuing to fall short of demand.

They have also revised their house prices growth forecasts for 2016 to 3.4 per cent, and 2017 to 4.4 per cent.

CEBR's economist, Nina Skero,  commented, 

“With the possibility of higher taxation on prime property and intervention in the rental market less likely, the Conservative Party’s victory in the General Election will likely support stronger price growth in the second half of 2015.

“Prices will also see a boost from the lack of fresh properties coming on the market.

“In London, average house prices are being weighed down by the prime end of the market. A strong pound which makes London property less affordable for foreign buyers and December’s decision to increase stamp duty on properties valued above £1.1m are both deterring some prospective buyers.”

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Unlicensed HMO landlord made to pay £25k

Another landlord has failed to obtain the required license for their House in Multiple Occupation.

Emmil Seeson Watson was ordered to pay £25,000 by Hammersmith Magistrates’ Court for failing to obtain a HMO license and for not carrying out gas safety checks on the rental property at 15 Bramley Road, London, W10. 

The landlord pleaded guilty to five charges under the Housing Act 2004.

Friday, July 17, 2015

LSLPS BTL index hits a high

Finally I can bring landlords some comforting news... rents are up!

The LSLPS BTL Index for June 2015 (Your Move and Reeds Rains) have recorded record rises.

The annual rent rise across England and Wales is now at 5.6%. 

The average monthly rent in England and Wales is now at £789.

Director, Adrian Gill, comments: 

“The pedal is pressed to the metal in the rental market. Not only have rents hit a new all-time record high – but we have never seen them rise so quickly. 

Growing wage packets and a strengthening economy mean that a greater number of tenants are able to afford higher rents. With such an overall shortage of housing in the UK, rental costs are primarily driven by the amount tenants are capable of paying. Rents have also decoupled from inflation. While record low inflation fueled by falling oil prices might bring clothes or food within the range of tenants’ purchasing power, it doesn’t have much of an effect on the property market in the short term.

There may be new factors on the horizon too. In the wake of the Summer Budget’s reduced assistance for landlords, we might see many aim to pass additional costs onto their tenants. If so, rents would receive yet another acceleration.

In all this, we mustn’t lose sight of the driving force behind rent increases – the mismatch of supply and demand. Expanding our housing stock needs to become a national priority. If anything, competition for homes is only going to get more intense over time. The fierceness of housing competition needs to be met with an equal dedication to homebuilding.”

Interest rates to rise at the end of the year

It seems that each new day brings us landlords a fresh woe.

This morning is no different.

Last night, over dinner, Mark Carney decided to bring up the topic of interest rate rises.

The Governor of the Bank of England gave a speech at Lincoln Cathedral that outlined his expected plan to increase rates by around 2% over the course of the next three years, although this will be dependent on any future 'shocks to the economy'.

At which point an unnamed bishop who'd just dropped his pension pot into a pair of two bed rental flats in Birkenhead choked on his stroganoff.

Let's prey for some kind of divine intervention.

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Wednesday, July 15, 2015

Tenant advice on deposit pay outs

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Immigration checks for Landlords

Following the pilot scheme in the West Midlands, it looks like the requirement for landlords to carry out immigration checks on all tenants will come into force in the Autumn.

In a nutshell all landlord will have to check that any new tenants and occupants over the age of 18  from that date onwards have leave to live in the UK.  All occupants with UK, EU and Swiss passports will have leave, for anyone else you will need to check that they have the necessary paperwork in place.

Checks must be done in person, copies must be taken of all the necessary documents and retained for 12 months after the tenancy expires.

Failure to carry out the checks can result in fines up to £3000 per occupant.

I will keep you posted as to when it is due to start and set out in more details what you need to do.

In the meantime if you have any queries please email me at

Rebecca Brough

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Is it time for landlords to sell up?

So with the budget slashing higher income landlords profits, a chance that the new landlord licensing requirements in Wales maybe heading to England and a rise in interest rates surely just around the corner, don't be surprised when landlords start selling up.

This party might be over.

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Rent Smart Wales scheme announced

A new compulsory licensing and registration scheme for landlords is to be launched in Wales this autumn.

The Welsh Assembly's Housing Minister Lesley Griffiths presented the 'Rent Smart Wales' scheme on Tuesday.
The scheme, starting this Autumn, introduces compulsory licensing and registration for all private residential landlords. ( oh joy, more landlord kicking )

Landlords will need to prove they are a 'fit and proper' person and to undergo training to obtain the mandatory landlord licence.
At the presentation Lesley Griffiths announced: 

“We know approximately 184,000 homes in Wales – around one in seven – are now privately rented. With so many people renting, a strong sector with good working practices is absolutely essential.

“The new legislation we are introducing will not only improve the situation for tenants – informing them of their rights and responsibilities – it will also help good landlords by improving the sector’s reputation.

“When Rent Smart Wales is introduced this autumn, it will provide a simple way for landlords to register and for them and their agents to become licensed. Ahead of the changes, I encourage landlords and agents to subscribe to register their interest and to receive useful news and updates.”

Here's all you need to know about the Rent Smart Wales scheme, straight from the horses mouth.

As for Property Hawk's views on the scheme, no,actually ... what's the point.

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Monday, July 13, 2015

Anything wrong with being a landlord?

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Enfield backs away from mandatory licensing

It appears that Enfield Council have thrown in the towel when it comes to their fight to introduce a mandatory landlord licensing scheme.

Earlier in the year, Enifield Council's landlord mandatory licensing scheme plans were knocked due to a technicality in their consultation process.

The council had initially sought to fight for a scheme, but following recent Government's changes  to the approval of licensing schemes Enfield Councillors have decided take a breather to re-consider their tactics

The Enfield Council Cabinet Member for Housing and Housing Regeneration, Cllr Ahmet Oykener, announced: 

“We have been granted permission by the Court to appeal the decision on the landlord licensing scheme in Court but the Government has, since we began this process, changed the law on licensing.

“As a result, even though our advice is that we have a good prospect of success in the Courts, we will be faced with difficulty in implementing the present selective licensing scheme because of changes in the law relating to the conditions and general approval for introducing selective licensing.

“In effect the goalposts have moved. We also want to revisit the case for additional licensing for Houses in Multiple Occupation.

“We will do the best to protect our residents and this means approaching the new Government regulations with an open mind.

“However I remain extremely concerned about increasing areas of privately rented properties in the borough which may not be of adequate standards, and in the light of the new regulations will look closely at means of dealing with areas experiencing for example poor property conditions, or high levels of crime.

“My duty is to ensure good quality properties, respect for the neighbourhoods, while maintaining a good relationship with responsible landlords. I am therefore asking officers to prepare a report for Cabinet on how we can best improve the quality of the private rented sector in Enfield.”

Renting restrictions on leasehold flats

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Saturday, July 11, 2015

HMO apartments Nottingham, Burns Street

I stumbled upon this HMO investment the other day.  It's located in the Arboretum area of Nottingham in what a hundred years ago was probably the posh part of town.  As with many of our cities these areas have become a little neglected as the middle classes fled to the suburbs.

It currently consists of 8 self contained apartments generating an income of £34,872.  On the asking price of £475,000 that gives a gross rental yield of just over 7% not high but reasonable.  If you could get it for a price nearing £400,000 generating a yield near 9% then it might be worth taking further.

Otherwise I'm guessing that the landlord is happy to take their £30,000+ income each year with relatively little work.  The fact that the property has been on the market since November suggests that the landlord may not be in a rush to do a deal.

The property is for sale with Centrick Property in Nottingham.

Finance my investment - mortgage search - expert brokers

Wednesday, July 08, 2015

Summer Budget 2015 - landlords hit on interest relief

Talk about giving us a bloody nose. George Osbourne has just smacked many landlords right in the face by announcing new restrictions on mortgage interest relief.

In his summer budget 2015 the Chancellor has announced that landlords in the higher income tax bracket will no longer benefit from mortgage interest relief.

George Osborne said it was unfair for wealthy landlords to offset mortgage interest against income when homeowners can’t, before describing the rapid growth of the sector as a possible risk to UK economic stability.

The restrictions will be phased in, more details on this to come, but it's sounding pretty painful for many of us.

Do you need a hanky?

So here's a further update on what's happening -
In the Governments own words this policy - will ensure that corporation tax receipts are not affected by large compensation payments made in relation to banks’ past misconduct and management failures, ensuring that the sector makes an appropriate contribution to restoring the public finances.

The change will be introduced gradually from 6 April 2017.

Interest deductions from property income will be restricted to:
  • 75% for 2017/18
  • 50% for 2018/19
  • 25% for 2019/20
  • 0% for 2020/21 onwards

Landlords will then claim a reduction in their income tax bill at the 20% basic rate for the interest costs not allowed as a deduction.

More in the budget to impact on landlords

  • From April 2016 the 10% wear and tear allowance will be replaced by a system that based on the actual costs incurred.
  • The reduction of social rents in England by 1% a year for 4 years from 2016.
  • Rent-a-room scheme will increase from £4,250 to £7,500 a year from April 2016 - Read the Rent-a-room relief policy doc
  • Potential restrictions on BTL lending to curb growth of BTL sector following  Bank of England concerns shared in Financial Stability Report.
  • Family homes worth up to £1m passed to children/grandchildren to be taken out of IHT. Allowance on top of existing IHT thresholds.
More on this story -

More industry responses - 

David Orr, Chief executive of the NHF give his response

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High earning HA tenants to pay more

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Read the full summer budget 2015 doc

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The summer budget

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Most popular BTL mortgages

Max LTV Initial Rate Term Completion fee Booking fee Incentives Lender
85% 4.99% Fixed 2 Years 2% £130.00 No Kent Reliance Semi Exclusive
85% 5.19% Fixed 5 Years 2% £130.00 No Kent Reliance Semi Exclusive
85% 5.09% Discount 2 Years 2% £130.00 No Kent Reliance Multi Let & Ltd Co. Semi Exclusive
80% 5.39% Variable 0 Years 2% £0.00 No Saffron Light Refurbishment
80% 3% Fixed 2017-08-31 2.5% £150.00 Free valuation Mortgage Trust Exclusive
80% 3.25% Fixed 2017-08-31 £2495 £150.00 Free valuation Mortgage Trust Exclusive
80% 3.5% Discount 2 Years 0% £0.00 No Hanley Economic Exclusive
75% 3.79% Fixed 2 Years 1.5% £100.00 No Axis Bank
75% 4.59% Fixed 5 Years 2% £100.00 No Axis Specialist
75% 3.69% Fixed 2 Years 2% £125.00 No Foundation Prime
75% 2.4% Fixed 2017-08-31 2.5% £150.00 Free valuation Mortgage Trust Exclusive
75% 3.7% Fixed 2017-08-31 0% £150.00 Free valuation Mortgage Trust Exclusive
70% 4.99% Fixed 2 Years 2% £125.00 No Foundation Light Adverse
IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.  
Please check our website regularly to see the most up-to-date products available.
Tel: 029 2069 5446
Your home may be repossessed if you do not keep up repayments on your mortgages.  
The Financial Services Authority does not regulate some forms of mortgage.

Halifax HPI for June

It's that time of the month, Halifax's House Price Index is out.

The banks June property price stats have -
  • Annual change +9.6% 
  • Quarterly change +3.3% 
  • Monthly change +1.7% 
  • Average Price £200,280 

Their housing economist, Martin Ellis, comments: 

"House prices in the three months to June were 3.3% higher than in the preceding three months. This measure of the underlying rate of house price growth picked up following two successive falls. Annual house price growth also increased to 9.6% from 8.6% in May and is at its highest since September 2014.

“Supply remains very tight with the stock of homes available for sale currently at record low levels. This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015. Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand with signs of a recent modest pick-up in demand.”

Download the Halifax House Price Index for June 2015

Tuesday, July 07, 2015

Median house price growth varied

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South East rents surge

Rents in the south east have surged beyond the rate of inflation rising 5.4% over the last 6 months as rents surge following heavy demand from tenants from corporate tenants and families relocating from the over priced London market.

Corporate tenants made up 47pc of tenancies in Berkshire, Buckinghamshire, Hertfordshire, Kent, Surrey and Sussex in the second quarter of the year according to reports in the Telegraph.

This compares to the national change over the last 6 months of just 1.2% according to the Rentindex.

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Monday, July 06, 2015

£200 bn BTL time-bomb

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Positive outlook on tenant demand

43% of landlords have seen increasing tenant demand over the past 12 month according to a poll by BTL lender Paragon.

Landlords reported seeing increased demand from both young people and families, with 51% of those polled feeling positive that demand will grow further over the coming 12 months.

John Heron, Managing Director of Paragon Mortgages commented on the poll -

‘It is no surprise that rental demand is steadily increasing. With continued stress on the housing stock driving prices up, tough affordability hurdles for would be buyers and a social rented sector under pressure as a result of renewed interest in right to buy, a steady increase in rental demand was practically inevitable,’

‘It is important that landlords continue to expand the supply of rented property in order to maintain balance and so avoid unsustainable increases in rents. A healthy, competitive and innovative buy to let market is critical to this,’

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HMO returns article in the Telegraph

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Rise in BTL lending and remortgages

The lending figures released by the Council for Mortgage Lenders for April 2015 show that buy to let sector is continuing to grow.

Although residential mortgage lending as a whole fell to £8.2bn this April, compared to £8.9bn in April 2014, buy-to-let lending was up 22 per cent from the previous year.

CML figures for April report £1.1bn was advanced to landlords.

The rise in lending to landlords coincides with the start of the new pension rules, unlocking pension pots.

The CML also reported a rise in landlords remortgaging, with £1.4bn lent to investors switching to a new deals - up 40% from April 2014.

Search the whole BTL mortgage market free 

Perks and perils of letting to poor

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Rip off rents hit home counties

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2 million landlords in the UK

There are now 2 million landlords in the UK according to the latest reports in the Mail.

This is up 600,000 since the financial crash.

In 2000 only 2% of mortgages were buy-to-let.  Now buy-to-let mortgages are running at 18% of all new mortgages.

Landlord mortgages - mortgage search

Sunday, July 05, 2015

Pub with residential potential £50k+

Who says you have to pay a fortune for property.

If you go north a landlord can find a host of potential property bargains.  Have a look at this property in Stockton on Tees for sale at auction with Allsop.  A former pub with 3 floors above the retail place making it a potential conversion opportunity.

The property is also near the Durham University Queen's Campus Stockton which is approximately half a mile down the road.

Property mortgage search - expert advice

Inside a one pound house

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Thursday, July 02, 2015

BofE share concerns of BTL over-exposure

The Bank of England's has warned that the booming buy-to-let market poses a threat to the UK's financial stability.

In the BofE's biannual Financial Stability Report for July 2015 it highlights the bank describes -

"Looser lending standards in the buy-to-let sector could contribute to general house price increases and a broader increase in household indebtedness"

The bank is concerned that any downswing in the economy could cause a flood of BTL property onto the sales market, that in an "illiquid market" could empower a property crash.

The bank's concerns will only be exacerbated by the looming increase of UK interest rates.

The bank stated its concerns -

"Buy-to-let borrowers are potentially more vulnerable to rising interest rates because loans are more likely to be interest-only and extended on floating-rate terms, and affordability tends to be tested at lower stressed interest rates than owner-occupied lending."

Download the Bank of England's Financial Stability Report for July 2015

Watch Mark Carney give his assessment ...

More on the B of E report -

The Telegraph - BTL could threaten UK economy
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Wednesday, July 01, 2015

Savills Student Property Spotlight 2015

With UK student numbers falling, down 1.7% for the academic year 2012/13, estate agency Savills asks whether the market for student landlords is past the worst?

Population growth exceeds projections

Is there any wonder that we have rising property prices and are experiencing this media branded 'housing crisis'?

We continue to fail to build anything like what is needed to meet demand.

Zoopla's blog has just pointed out that the population growth in England is 12 per cent higher than the National Population Projection, from 2012.

The National Population Projection forecast England's population growth to be 350,000 in 2012/13 and 384,000 in 2013/14, but ONS latest figures puts actual growth  in 2012/13 at 372,000 and 451,000 in 2013/14.

As for the coming years, it's really anyone's guess.

£5.75 bn invested in student housing this year

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NALS annual conference

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Eltham landlord fined £19,720

Eltham landlord, Siteworth Ltd pleaded guilty to nine offences at Bexleyheath Magistrates’ Court on June 9th.

The charges were regarding a poorly maintained two storey Victorian detached property let out as eight bedsits.

The court heard evidence on the poor state of repair of the property - rotten window frames, mould and damp, no heating in the hallways and no hot water in four of the bedsits, some for as long as four years.

Timothy Knight, Siteworth's director had allegedly told tenants to "boil a kettle" when they had complained about not having hot water.

Siteworth Ltd have been fined  £19,720.