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£4m to crack down on criminal landlords and agents

Posted on 6 January, 2020 at 11:25 Comments comments (1)

More than 100 councils across England have been awarded a share of over £4m to crack down on criminal landlords and letting agents, Housing Secretary Robert Jenrick has announced. The majority of landlords provide decent homes for their tenants, but a small minority persist in breaking the law, making tenants' lives a misery by offering inadequate or unsafe housing.

The new funding will be used by councils to take enforcement action against these landlords, and to advise tenants of their housing rights.. This action will continue the government's ongoing work to make the private rented sector fairer and stamp out criminal practices for good.

Among the councils to benefit from the funding are:

* 21 councils across Yorkshire and Humberside - to train over 100 enforcement officers across the region to ensure standerds are being met by landlords.

* Northampton - to create a 'Special Operations Unit' to enforce against the very worst landlords responsible for over 100 homes in the town.

* Thurrock - to work with the care service to ensure the most vulnerable young tenants are in decent, well-maintained homes.

* Greenwich - to trial new technology to identify particularly cold homes to ensure renters are warm over the winter period.

Housing Secretary Robert Jenrick said: "This government will deliver a better deal for renters. It's completely unacceptable that a minority of unscrupulous landlords continue to break the law and provide homes which fall short of the standards we rightly expect - making lives hard for tenants who just want to get on with their lives.

"Everyone deserves to live in a home that is safe and secure and the funding announced today will strengthen council's powers to crack down on poor landlords and drive up standards in the private rented sector for renters across the country."

Councils already have strong powers to force landlords to make necessary improvements to a property thrugh a range of measures, including civil penalties and banning orders for the worst offenders.

The grants will support a range of projects to enable councils to make the best use of these powers. This will include trialling innovative ideas, sharing best practice and targeted enforcement where we know landlords shirk their responsibilities.

Today's announcement demonstrates government's commitment to helping good landlords to thrive, hard-working tenants across the country get the homes they deserve - creating a housing market that works for everyone.

Further information

The government has committed to delivering a fairer deal for renters and empower them whilst also giving greater peace of mind.

We shall end no fault evictions, so that landlords can't remove tenants without good cause, and introduce Lifetime Rental Deposits so renters don't have to save up for a new deposit while their money is tied up in an old one.

There are more than 4.5 million households in the private rented sector in England, with recent statistics showing that 82% of private renters are satisfied with their accommodation.

The fund will help councils take on the most common challenges that stand in the way of tackling poor standards in the private rented sector, including:

* encouraging positive landlord/tenant/local authority relationships, particularly with vulnerable groups such as care leavers.

* the need for better information - on housing stock, and on landlords and agents operating in their areas.

* data sharing between authorities and agencies - identifying and bringing together different data sets to enable better enforcement tagetting which protects the most vulnerable tenants.

* internal 'ways of working' - improving housing-specific expertise, in-house communication between teams , and tools and strategies to effectively implement policy.

* innovative software - for enforcement officers to record their findings, gather evidence and streamline the enforcement process.


Landlord Guide to the UK General Election 2019

Posted on 3 December, 2019 at 8:05 Comments comments (0)

We know that landlords will be considering how the plans of each party will affect them as at this general election.

To help our landlords get a grasp on the main positions of each party, we've written a summary of what the three large national parties are promising in their manifestos. We haven't included any comment or analysis; here we just focus on what has been promised on the Private Rented Sector and taxation that will affect UK landlords.


Conservative and Unionist Party

The Conservatives promise a 'Better Deal for Renters'. This will include: 

*Abolishing 'no fault' evictions

*Creating a 'lifetime' deposit which moves with the tenant

*Protection fron revenge evictions and rogue landlords

*Strengthened rights of possession for 'good landlords'

They also pledged to continue reforms of leasehold property, banning the sale of new leasehold homes, restricting ground rents and setting up a redress mechanism for leaseholders. Conservatives will support high-rise residential residents and remove unsafe cladding.

Universal Credit (which is used by many tenants to pay rent) will continue to be rolled out replacing legacy benefit payments. The freeze on benefits will end.

Tax

A conservative government would not increase income tax, national insurance or VAT. The national insurance threshold is due to rise to £9,500 next year, saving the average landlord £85 per year. They state an ambition to raise the threshold to £12,500 in future.

Conservatives have also announced a 3% surcharge for non-resident buyers of residential property.


Labour Party

Private Rented Sector

A Labour Government would cap rent-rises at the rate of inflation and give cities additional powers to cap further rents. They would create 'new open-ended tenancies' and stop 'no fault' evictions. Right to Rent checks would be scrapped.

New minimum standards on properties would be introduced and nationwide licensing would be backed up with tougher sanctions on rule-breaking landlords. New renters' unions would be funded.

Councils would be given new powers to regulate the short-term lets market.

Labour would set up a £1bn Fire Safety Fund which will be used in part to replace Grenfell-style cladding on all high-rise homes.

They would make land ownership more transparent and end 'permitted development' schemes which allow office space to be converted directly into residential use property without following the usual planning permission routes.

A Labour Government would end the Right to Buy for social and housing association properties. Contrary to what John McDonnell said earlier this year, the manifesto includes no plans to roll out Right to Buy to the private sector. Councils would be given additional powers to tax empty properties, and foriegn companies would face a levy if buying houses in the UK. Labour pledge to abolish 'unfair fees' for leaseholders, and give them the right to buy their property freehold.

Universal Credit would be scrapped and an alternative benefit payment system would be 'mitigated' until it can be replaced.

Outside of the manifesto, Labour are promising a 'renter's charter' and an annual MOT for rented properties.

Tax

National Insurance contributions and VAT would be frozen. Income tax would be frozen for those earning under £80,000. Those earning over £80,000 would be taxed at 45%; those earning over £125.000 would be taxed at 50%. Both new bands would come in during 2020/21.

For context, there are currently 1.6 million people with taxable incomes over £80,000.The average landlord's rental income is £15,000 according to the English Private Landlord Survey. The mean landlord income, excluding their rental income, is £46,000.

Corporation tax would rise under Labour, which would affect landlords who let properties via a limited company. Corporation tax would also increase to a headline rate of 26% by 2022/23 and a rate of 21% by 2022/23 for profits under £300,000: i.e. the company would need profits of over £300,000 before it began to pay the higher rate.

Labour would impose a levy on second homes equal to 200% of the current council tax bill for the property. They estimate this would affect around 250,000 homes. Capital gains tax would be increased to the same level as income tax. Primary residences would continue to be exempt.


Liberal Democrats

Private Rented Sector

The Liberal Democrats would introduce government-backed deposit loans for first-time renters under 30 years of age, to help them access the private rented sector. Tenancies of three years or more would be encouraged by building in inflation-linked annual rent increases. This is intended to combat rough-sleeping.

Mandatory licensing would be used to protect against rogue landlords. Lib Dems would increase the minimum energy efficiency standards (MEES) for rented homes and remove the cost cap on improvements.

The 'hostile environment' policy towards immigrants would be ended. (What this actually means is scrapping the Right to Rent policy).

Councils would be given the power to increase council tax by 500% on second homes. Overseas residents would be made to pay a stamp duty surcharge when buying second homes in the UK.

Jo Swinson's party would increase Local Housing Allowance (LHA) in line with average rents in the area. It would also introduce 'positive incentives' for people to downsize their homes. Universal Credit would be reformed with the stated aim of being more supportive of the self-employed.

Tax

A Liberal Democrat Government would raise corporation tax to 20% and abolish the separate Capital Gains Tax-free allowance. They would also increase income tax by 1%.



The Legalities of Letting

Posted on 12 November, 2019 at 11:15 Comments comments (0)

Landlord responsibilities have increased tenfold over the last few years as the government has introduced a raft of new legislation designed to protect tenants. The difficulty is that the vast majority of landlords are not seasoned professionals, but rather people who purchased or inherited an extra property and use it to prop up their income. This means that many landlords struggle to keep on top of the changes. However, failing to comply with legal obligations as a landlord can be a costly mistake, particularly if the relationship between tenant and landlord breaks down and the landlord seeks to recover possession of the property.

We've compiled some common questions and provided some top line tips:

What legal obligations should landlords be aware of and what paperwork needs to be in place before a tenancy begins?

Three very important legal obligations for landlords to remember are:

1) A valid Gas Safety Certificate. This must be renewed each year on expiry by a Gas Safe engineer and the tenant must be given a copy before they move in. 

2) An up to date Energy Performance Certificate which provides the property's energy efficiency rating. From April 2018, minimum energy efficiency standards mean that newly-rented homes and those with renewed tenancies must have an Energy Performance Certificate (EPC) rating of 'E' or above. On the day that the tenant signs their tenancy agreement, landlords must issue them with an EPC.

3) Protect the tenant's deposit in one of the government approved schemes. Once the deposit is protected, landlords must provide proof and details of the scheme to the tenant and issue them with the prescribed information. The deposit must be protected within 30 days of having received the money.

What tips and advice would you give for making sure these are met?

If you are not confident in your knowledge of landlord legislation, seek professional help. We often have landlords contacting us with a problem which has presented itself as a result of non-compliance and sometimes it can be more difficult to put right later down the line, so it's best to get it right first time.

Enquiries from concerned landlords who are unsure of their obligations have increased so much so that we now have to offer compliance advice on Right to Rent, Deposit Protection, EPC and Gas Safety, to help landlords get it right and avoid paying penalties. You may decide it's better to hand over the responsibility to a reputable managing agent.

Are there any new developments they especially need to be aware of?

From April 1st, 2020, the rules on energy efficiency standards will extend to covering existing tenancies too, meaning landlords will no longer be able to rent out homes with an EPC rating of 'F' or 'G'. Fines for doing so will be up to £5,000.

Are there any common pitfalls they need to avoid - and how can they do this?

Some landlords will be aware of the Caridon Property Ltd v Monty Shooltz case. In short, a landlord failed to obtain a possession order based on their Section 21 Notice, because a judge ruled that the requirements of the Deregulation Act 2015 meant their failure to issue a gas safety certificate before the tenancy began invalidated the subsequent Section 21 Notice for repossession. What is so crucial to recognise in this situation, is that there is nothing landlords can do to ressurect this issue. If they failed to provide a gas safety certificate before the tenancy commenced, even if they provided it since, landlords cannot evict a tenant using a Section 21 Notice. So, ensure you ALWAYS have this covered.



Impact of Tenant Fees Act continues to be felt

Posted on 8 October, 2019 at 8:25 Comments comments (0)

David Cox, ARLA Property Chief Executive, said: Although it's positive to see that supply has risen, it is nowhere near enough to counterbalance the rapid pace of rising rents, which have reached a new record high for the fourth month running. Two thirds of agents reported landlords raising rents last month, which is a significant increase when compared to the two fifths of agents who witnessed rises in August last year."

Unfortunately, the impact of the Tenant Fees Act will continue to be felt by tenants, as in order to keep their heads above water, landlords will continue increasing rents to cover additional costs they now have to bear".

ARLA Propertymark last week issued it's August Private Rented Sector Report.

* The number of tenants experiencing rent rises rose marginally in August with 64 per cent of agents witnessing landlords increasing them, compared to 63 per cent in July.

Year on year, this figure is up from 35 per cent in August 2017, and 40 per cent in August 2018.

The Most Affordable Place to Rent in England

Posted on 8 October, 2019 at 8:00 Comments comments (0)

If you're bored of your salary being swallowed up by your rent? It may be time to move to Durham. The city has ben named the most affordable place to rent in England, with just 23% of your monthly salary going towards rent there. Other northern cities closely follow in the latest Affordability Index, with tenants in Lancaster and Liverpool having to spend just 24% of their salary on rent.

At the other end of the scale, Brighton and Bath have been crowned the most expensive cities for renters, where you'll be expected to spend 52% of your salary on rental payments.. These are closely followed by Oxford, where you will, on average, spend 51% of your salary towards rent.

Westminster and The City of London almost make the 'most expensive' list - but surprisingly they don't actually top it for percentage of salary spent (perhaps because London salaries are often weighted).

The research, conducted by Open Property Group, used data from salaries from the Office for National Statistics to analyse the affordability of rent in 49 cities. The findings are based on a single tenant renting in each city. If the tenant was found to be spending over 30% of their gross income salary towards rent, this was deemed as 'unaffordable'.

CAMBRIDGE appears at Number 7 of the least affordable places to live, with an average monthly rent of £1,225.00  and an average salary of £31,941.00 (46% of rent).

Private Renters Are Satisfied or Very Satisfied

Posted on 24 July, 2019 at 10:25 Comments comments (1)

The Office of National Statistics has released the English Housing Survey 2017 to 2018: private rented sector.

The finding of the report concluded: The majority of private renters are satisfied with their accommodation and tenure, though not as satisfied as owner occupiers.

* The majority (84%) of private renters were satisfied or very satisfied with their current accommodation, though this was not as high a propertion as owner occupiers (95%).

* Private renters had the lowest of satisfaction with tenure at 69%, compared with 98% pf owner occupiers.

Most private rented sector tenancies ended because the tenant wanted to move.

* Of those who had lived in their current home for less than three years, 72% moved house because they wanted to. . Main reasons for moving in the past three years were job related (18% of moves), to move to a better neighbourhood (16%) and to move to a larger home (13%).

* Of those who did not move solely by choice, reasons included being asked to move by landlord (10%), and moving due to the end of a fixed term tenancy (8%).

Compared with social renters and owner occupiers, private renters spend the highest proportion of their income on housing. Despite this, the majority said they found it easy to pay their rent.

* On average, private renters spent a third (33%) of their income on rent. This compares to 28% for social renters and 17% for mortgagors. The proportion of household income spent on rent was higher for private renters in London (42%) than for the rest of England (30%).

* Most private renters said they found it easy or very easy to pay their rent.

* One in five private renters (20%) received Housing Benefit. Of these, 85% reported that the benefit covered part of their rent.

One in five households in England live in the private rented sector, making it the second largest tenure.

* 4.5 million households live in the private rented sector in England, 19% of all households. By comparison, 17% (4.0 million) live in the social rented sector and 64% (14.8 million) are owner occupiers.

Nearly two thirds of private renters had no savings.

* 63% of private renters report having no savings. Just over a third (37%) reported having some savings. 11% of private renters had savings of £16,000 or more.

More than half of private renters thought they would eventually buy a home. A sizeable proportion of those expected to buy but did not currently have any savings.

*Over half (58%) of private renters thought they would eventually buy a home. Younger renters were more likely to think they would eventually become homeowners. 77% of those 16 to 24 thought they would buy, compared to 40% of those aged 45 to 64.

* Of the 42% of private renters who thought they would not eventually buy a home, most (64%) said it was because they could not afford to do so.

* There was no apparent link between those who thought they would eventually buy a home and those who had substantial savings that could go towards a deposit: 12% of those who eventually planned to buy had substanstial savings of £16,000 or more.Overall, 42% of those who intended to buy, had some savings.


The Future Doesn't Look Bright For Landlords

Posted on 14 May, 2019 at 11:20 Comments comments (0)

Alarm bells over the health of Britain's private rented sector have been raised for the second time in two weeks, leading some to worry that a rental crsis is on the horizon. 

Many landlords will have seen their profits slashed over the past three years as biting tax changes have taken their toll. Two pieces of legislation, one proposed and one incoming, are likely to have a further impact on landlords in the coming years..

Landlords have issued a stark warning over the health of Britain's private rented sector as more and more property investors look set to sell up in the face of falling profits.

The findings follow a wide-ranging study of almost 2,500 landlords by the Residential Landlords Association study released last week, which found that a quarter of private landlords are looking to sell at least one property over the next year.

Letting Fees Comes Into Force 1st June 2019

Posted on 9 February, 2019 at 7:35 Comments comments (0)

The introduction of a ban on fees charged by landlords and letting agents looks set to finally become law on June 1st this year, the government has announced.

Following it's third reading in the House of Lords, the Tenant Fees Bill is likely to receive Royal Assent in the coming months.

Speaking to The Lords, Lord Bourne of Aberystwyth said: "We need to enable agents and landlords following Royal Assent to become compliant, but we intend for the provisions to come into force on June 1st 2019.

"This would mean the ban on letting fees would apply to all tenancies signed after this date".

The new law will not just mean a ban on letting fees, but also the majority of other upfront fees payable by tenants to rent a property in England.

There will also be a cap on the amount of refundable deposit a tenant would be required to pay to the value of five weeks' rent as well as a cap on the amount of holding deposit a tenant will be required to put down to secure a property to the value of one week's rent.

The government believes the Bill will make renting in England fairer and more affordable for tenants by reducing the costs at the outset of the tenancy, at the same time as improving transparency in the private rental market.

David Cox, Chief Executive of ARLA Propertymark, said: "With the Tenant Fees Bill completing it's passage through the House of Lords, it appears the Tenant Fees Ban will come into force on June 1st 2019.; subject to parliamentary scrutiny in the House of Commons.

"This now gives agents the legal certainty they need to prepare for a post tenant fees ban world. To learn about the intricacies of the legislation, we encourage agents to come to our regional meetings".

Why Section 21 is necessary

Posted on 22 January, 2019 at 5:50 Comments comments (0)


Currently, there is a nationwide campaign headed up by Generation Rent and supported by The Salvation Army and Crisis amongst others. The campaign has over 50,000 signatures so far, calling for Section 21 to be scrapped.

NO-FAULT EVICTIONS

Section 21 evictions, also known as no-fault evictions, are used when a landlord needs the property to be vacated for any number of reasons at the end of a tenancy agreement. These can include the following, althought the Section 21 Notice does not require any rationale for a notice to be served:

* Wanting to sell the property

* Wanting to move into the property themselves

* Wanting to renovate or extend the property

LANDLORDS

For landlords, Section 21 Notices are neccessary as it gives them the ability to regain possession of their property at the end of a tenancy agreement without need for justification.

When there are reasons for repossession before the end of the contract, the only way they can do is with a Section 8 Eviction Notice where they'll need a reason such as damages or rent arrears.

LACK OF SOCIAL HOUSING

The real issue appears to be the lack of social housing because if there were enough social housing available for tenants, there would not be so much reliance placed upon the private rental sector and therefore there would be more stability for those that rent.

The current situation is that the affordable housing supply is low. Whilst right-to-buy gave people the financial incentive to own their own property, the government hasn't been replacing these properties. This in turn, has meant that those who would have ben able to live in council housing have had to enter the private rental market; this has left landlords inundated with the type of tenants that may be reliant on benefits, that may be vulnerable, or have any number of other issues, making the private rented sector not the most appropriate solution. However, without the availability of social housing it is the only solution.


IMPORTANT CHANGES FOR LANDLORDS

Posted on 15 December, 2018 at 7:05 Comments comments (0)

If you rent out a property classed as a House in Multiple Occupation (HMO) you need to make sure you are aware of some recent changes.

A HMO is a property that is rented to a number of unrelated tenants who share facilities like bathroom or kitchen. They can include shared houses or flats above commercial premises.

On October 1st, mandatory HMO licensing was extended to include one and two storey properties. An HMO must now be licensed if: 

* it is let to five or more people from more than one household.

* at least some tenants share a kitchen or bathroom

and

* it is not a purpose-built flat in a block of three or more flats.

The government has introduced these changes with the intention of raising standards and so that good landlords who work hard for their tenants do not face unfair competition from rogue landlords who ignore their obligations.

Application forms are available at local council offices or on their websites.

Failure to apply for a licence if one is required is a criminal offence and may result in prosecution or a civil penalty.


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