Tue, 21st May 2019
There has been a lot of discussion in the news about retailers - including high street giants such as House of Fraser - attempting to use CVAs to negotiate cheaper rents, leaving landlords in a difficult financial situation. Many of these landlords hold the properties as part of an investment portfolio, and are fund operators who have an obligation to their investors to make as much as they can from the property.
It’s easy to sympathise with those landlords, but the sector as a whole is now coming under fire, as a recent investigation by the Guardian and ITV has found that there are many landlords that are continuing to rent out properties which fail the “fit and proper” test. Some of these landlords have property portfolios worth tens of millions, and are renting out poorly maintained homes or buildings, and while they may be faced with fines if they are found to be mismanaging properties, the fines average just £3,600 per offence, which has led investigators to question whether the fine is high enough.
Home buyers are facing similar challenges. Persimmon Homes has come under fire for selling homes that are poorly built, and refusing to carry out work to bring the building up to standard, while their CEO takes away a huge pay and bonus package each year. Shareholders revolted against Fairburn’s bonus package, which amounted to £50 million of shares last year for himself, while 140 senior staff had to share a payout of £500 million between them.