Homelessness – A thing of the past?

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North Somerset Council are now working in collaboration with local landlords on a brand new solution “The Ark Passport Scheme” to help more benefit assisted and low income tenants secure private rented accommodation.

A shortage of affordable housing and the introduction of Universal credit*, which restricts the payments of rents direct to landlords, has led to significant difficulties for benefit claimants to access affordable homes.

The Ark Passport Scheme aims to address this and allows tenants to separate and prioritise rent and other important payments. It provides a banking facility which creates a secure payment “wallet” on a tenant’s benefit, making sure that the landlord receives their rent – which is extremely useful to those tenants who have been transferred onto the Universal Credit model.

Not only does The Ark Passport Scheme give landlords greater security against such issues as non-payment of rent, it also offers the added advantage of having a rent guarantee and legal expenses insurance policy in place for the duration of the tenancy.

The Ark Passport Scheme aims to equip families and individuals with the opportunity of securing decent accommodation, overcome the need to find prohibitive deposits and rent in advance as well as enabling tenants to build their credit rating and reference history.

The Ark Passport Scheme is a tool to encourage both private landlords and housing providers to house those in receipt of benefit with an aim to reducing homelessness.

Stuart Adams, Senior Lettings Officer from the Housing Resource Team at North Somerset Council, said: ‘We have been looking for a long term and sustainable solution to increase the supply of residential properties from within the private rented sector in North Somerset, to continue to effectively tackle the issue of homelessness prevention.

‘Working in collaboration with The Ark Passport scheme, we hope to alleviate the financial concerns faced by landlords when accepting tenants who are in receipt of Housing Benefit and Universal Credit.

‘After completing the basic elements of The Ark Passport Scheme, tenants will be in a position where they are fully referenced and financially ready to commence a tenancy. They will also have the backing and support of the Housing Resource Team which has dedicated officers to assist both landlords and tenants throughout the tenancy.

‘The scheme is in its infancy, however it is innovative and I expect that as the model is successfully rolled out it will be adopted by other councils too.’

An Ark Passport Representative said: ‘The answer to alleviating long-term homelessness must be something which encompasses security, longevity, education and understanding and not just throwing taxpayers money at a problem that has no solution.

‘The main benefits to landlords who participate in The Ark project are that the rent is guaranteed via the secure wallet in the tenant’s bank account and that the legal expenses insurance will cover all of the landlord’s legal repossession costs.

‘Furthermore, Ark users can gain access to a free advertising portal for their vacant properties as well as a Council appointed support team specialising in Universal Credit.

‘Working in collaboration with North Somerset Council, together we hold the key to enable good landlords to offer better homes to tenants’ right across the district. We hope that by working closely together on this project that the concept will bring shelter, durability and harmony to neighbourhoods for people who want a secure and comfortable way of life.’

The Ark will also be a welcome edition when the Homelessness Reduction Act comes into force from April 2018, with £61million government funding behind the bill. The bill – which became an official act of parliament in April – places a legal duty on councils to give people meaningful support to try to resolve their homelessness, as well as introducing measures to prevent people becoming homeless in the first place. This follows a warning from a homeless charity, that the number of people forced into homelessness is expected to more than double to half a million by 2041 unless the government take immediate action.

So it’s good news that 22 additional housing sites have been identified by North Somerset Council recently, in order to meet the area’s housing needs over the next nine years. These will provide a total of 821 homes which are all expected to be delivered over the next five years.

Therefore, North Somerset Council would like to take this opportunity to invite both private landlords and letting agents from across the district to attend a free seminar on The Ark Passport Scheme which will be taking place on Wednesday 27th September (6pm-8pm) at the newly refurbished Museum in Weston-super-Mare. There’s no need to pre-register for this event, all are welcome so please come along.

* Footnote: What is Universal Credit? UC affects tenants who claim Jobseekers Allowance, Income Support, Employment and Support Allowance, Working and Child Tax Credits or Housing Benefit. With all these changeovers proving complex and impacting on many parts of benefit claimants’ lives, those claiming the aforementioned benefits will eventually see their benefit replaced by one single benefit – Universal Credit. Furthermore, the latest Universal Credit Survey shows that 40% of UC claimants in arrears were not in arrears prior to going onto the new welfare scheme.

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Unreliable Evidence on R4 discusses landlord and tenant issues

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Radio 4’s Unreliable Evidence program on this evening (13/9/17) @ 20:00 is discussing housing law and looks to be covering a number of topics of particular interest to landlords.

more details can be found here:

http://www.bbc.co.uk/programmes/b0939hpt

“Housing Law

Unreliable Evidence

A judge led inquiry has been set up to establish the facts of the devastating Grenfell Tower fire. The tragedy has shone a spotlight on issues of housing safety. Clive Anderson and guests discuss topical housing law issues. Does the law sufficiently protect the tenure, safety and other legal rights of tenants in both the private and public sectors?

There is consensus in the legal community that housing law is under-resourced, unnecessarily complex and, in many ways, outdated. But what rights should tenants have?

Barrister Liz Davies says a lack of legal aid is preventing tenants from bringing unsafe and unsatisfactory housing to court. Current legislation means a legal claim only arises where the rented property is in “disrepair”. A tenant has legal recourse if their boiler is broken, but none if the heating is functioning but inadequate.

The programme discusses concerns that current protections are unevenly applied. Private landlords can be inspected and works required by environmental health officer. But these officers cannot compel their own local authorities to act.

In 2012, the Welsh Assembly announced it would bring into legislation Law Commission recommendations that will dramatically simplify the rental market. Solicitor David Smith, who was involved in drafting the legislation, says the hugely complicated process will take another couple of years. Should England follow suit?

Part-time judge Caroline Hunter is supportive of a greater role for specialist tribunals to increase efficiency and access to justice. Barrister Matt Hutchings QC argues for additional social housing saying that, without more homes, additional laws will only add further complexity.”

Tony

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BTL mortgage products available hit high point since financial crises

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Money Facts has reported the number of Buy to Let mortgage products available to landlords has hit a record number since they dropped to below 200 after the financial crisis 10 years ago.

There are now 1,725 different Buy to Let products available across lender compared to the pre-crisis high point of 1,942. The last month has seen an increase of 7%, which is the largest month on month growth this year.

Charlotte Nelson,Moneyfacts spokesperson, said: “Despite reduced BTL activity in the first quarter, competition among lenders remains high as providers fight to retain their standing in a diminished market. Rates have also fallen with the average two year BTL fixed rate down from 2.91% in August to 2.86% in September, another record low”

“The extra pressure on the buy to let market could be a turning point, with the competition that is currently alive and well amongst providers perhaps starting to ebb as they shift their focus to ensuring the new regulation is followed”

At the end of this month we will see the change in regulation come in to force defining landlords with four or more properties as ‘Portfolio Landlords’ and the performance across the whole portfolio having to be taken into account when assessing affordability.

Therefore, we could see even more products as the lenders split them over the two different types of criteria requirements.

If you require assistance with a Buy to Let mortgage or any other type of property finance please do not hesitate to ask us by completing the contact form below and we will be happy to help.

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Student Pods recent set backs?

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Does anybody here know anything about Pinnacle’s Canterbury Student Village developed by Manchester-based Pinnacle Alliance during 2013-5?

The development, which consists of 336 student pods, was developed by Pinnacle Alliance off-plan aimed to attract both UK and overseas buyers. The ownership is leasehold.

Completed in 2015, the development has been successfully tenanted until now. Despite the fact that more and more student pods are coming online in Canterbury, the demands for the pods outstrip the supply by far. This renders the Canterbury pods in demand.

As original off-plan buyers, we were offered a 5-year guaranteed rental yield roughly 8% per annum. Until March 2017, this has been honoured without issues.

However, recent setbacks at other Pinnacle developments (e.g. Angelgate) raise concerns about the developer’s integrity. This has been demonstrated by their delay to the original guaranteed payment schedule by Harper Brooks (Camborne) for one month to the existing Pinnacle student pod owners, without consultations and I believe is in breach of the original agreement.

Furthermore, it was known that Canterbury Student Village’s freehold was sold to an offshore company in late 2015. Pinnacle’s original Special Purpose Vehicle (SPV), NWS Development Ltd, was relegated into Head Leasee. The SPV was subsequently dissolved on 14 Feb 2017. Many Pod owners are now at a loss as to what action they can take or who to take their case to – the developer Pinnacle Alliance, or the appointed managers Harper Brooks & Camborne. Confusing everybody even more, is the fact that, when called, Pinnacle Alliance and Harper Brooks & Camborne blame each other for the non-payment of rents, yet both companies have the same people on their Boards of Directors!

Many thanks

Martin

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National Landlord Investment Show is heading to Sussex – 13 September at Brighton Racecourse

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New exhibitors announced! After an unbeatable few months, the UK’s leading property investment event is heading to Sussex to bring together local landlords & leading property investment services.

National Landlord Investment Show is returning to Sussex for its 50th , show to date on Wednesday 13 September at Brighton Racecourse, Sussex.

It’s been an unbeatable few months for the show, with its June event at Olympia sparking off lobbying to Parliament by our guest speaker Iain Duncan Smith MP. The show gained national and industry press coverage at its speaker panel around prohibitive landlord law – and with expert speakers and property professionals at the East London show, visitors can expect this to be one of the topics addressed and debated in September.

The exhibition offers local landlords and property investors a chance to keep up to date on the buy-to-let market in London and surrounding areas, expand their business networks and connect with leading suppliers of property investment, tax, legal, insurance and mortgage services. It’s also a perfect opportunity for those thinking of entering the market to get expert advice on opportunities available.

Visitors to the show will be able to join 11+ seminars by property experts, with unparalleled experience in the UK buy-to-let market.

Investors will be able to source the latest property services from renowned brands such as Royal Bank of Scotland and Ikea Business, as well companies such as Nova Financial, Lodgikol, Alternative Bridging, Martin & Co, Alan Boswell, Leaders and Clive Emson Land & Property Auctioneers who offer local or niche buy-to-let services in areas from tax, to mortgages to legal.’

There is also a complimentary networking event in the morning of the show for visitors to meet new contacts and discuss local issues.

Tenancy Deposit Scheme, exhibiting for the third year running, attests to the popularity of the show, ‘National Landlord Investment Show is a really well run event and has gained the popularity it deserves within the industry.’

The event is running from 09.00 – 15.30 and tickets are complimentary.

Register free at www.landlordinvestmentshow.co.uk

About Landlord Investment Show

National Landlord Investment Show is the UK’s leading property investment exhibition, providing solutions, networking and advice for new seasoned and investors in the buy-to-let market. Established in 2013 and operating in property hotspots throughout the country, it has now run 48 shows successfully, and has provided property investment solutions for over 25,000 landlords in the last 12 months alone, a growth of 31% since 2015.

www.landlordinvestmentshow.co.uk

Landlord Investor Magazine is subscription-based and available in both print and digital formats with 11 issues each year. It offers advice, news and commentary from leading experts on the property market, including Iain Duncan Smith MP and David Smith, Economic Editor of the Sunday Times. Each issue helps property professionals keep up to date with essential industry developments.   Subscribe at www.landlordinvestormagazine.co.uk

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – National Landlord Investment Show is heading to Sussex – 13 September at Brighton Racecourse | LandlordZONE.

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National Audit Office – Homelessness report

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The National Audit Office has released its homelessness report with all indices rising isn’t it time the government works with landlords rather than using them as a political expediency.

Click Here to see full report.

60% increase in households in temporary accommodation since March 2011 with 77,240 households in temporary accommodation @ March 2017

£1.15 billion – the cost of homelessness to Local Authorities in 2015-2016

88,410 households applied for homelessness assistance during 2016-2017

Threefold increase In the number of households recorded as homeless following the end of an assured shorthold tenancy since 2010-11. Surely this is one of the most telling statistics and shows the results of financial and political attacks post Section 24 mortgage interest restrictions with PRS landlords looking to exit the housing Market.

Click Here  to read Dr Rosalind Beck’s comprehensive report on Section 24 of the Finance (No. 2) Act 2015

Amyas Morse, head of the National Audit Office, attacks the government on its record saying: “Homelessness in all its forms has significantly increased in recent years, driven by several factors. Despite this, government has not evaluated the impact of its reforms on this issue, and there remain gaps in its approach. It is difficult to understand why the Department persisted with its light touch approach in the face of such a visibly growing problem. Its recent performance in reducing homelessness therefore cannot be considered value for money”.

The report summary indicated:

“The ending of private sector tenancies has overtaken all other causes to become the biggest single driver of statutory homelessness in England. The proportion of households accepted as homeless by local authorities due to the end of an assured shorthold tenancy increased from 11% during 2009-10 to 32% during 2016-17. The proportion in London increased during the same period from 10% to 39%. Across England, the ending of private sector tenancies accounts for 74% of the growth in households who qualify for temporary accommodation since 2009-10. In addition, it appears likely that the decrease in affordability of properties in the private rented sector, of which welfare reforms such as the capping of Local Housing Allowance are an element, have driven this increase in homelessness.”

“The ability of local authorities to respond to increased homelessness is constrained by the limited options they have to house homeless families. There has been a significant reduction in social housing over the past few decades.”

Surely the government needs the PRS now more than ever?

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What is happening to Housing Law in Wales?

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This is the 14th post in my 2017 Legal Update series.

If you are in Wales or own or manage a rented property in Wales you may have noticed from this update series that quite a few of the new regulations don’t apply to you and you may be wondering what is going on.

What is happening is that Welsh housing law is going to be changing dramatically. It is part of a big divergence between the law in England and Wales due to the Welsh Assembly flexing its muscles.

I rather approve of much of what the Welsh Assembly has done, but I have reservations about the wisdom of having such big differences in the law between England & Wales. It is going to be hard on agents, for example, who manage properties in both places.

So, what is happening?

It’s mostly down to two acts:

• The Housing (Wales) Act 2014, and
• The Renting Homes (Wales) Act 2016.

Let’s take a look at them:

The Housing (Wales) Act 2014 – registration and licensing

The main effect of this Act that all landlords and letting agents need to register with Rent Smart Wales.

Further, landlords and letting agents are not allowed to manage property unless they are licensed. This involves undergoing training and (of course) paying a license fee.

If you are a landlord you don’t have to be licensed, but you still need to register and (if you are not licensed) you are not allowed to manage your property (including serving possession notices) – you need to appoint a licensed agent.

If you are a Welsh landlord you should have registered by now as this Act came into force some time ago. If you haven’t – you need to register pronto. Otherwise:

• You can be prosecuted and fined by your Local Authority
• They can apply to the First Tier Tribunal for a ‘rent stopping order’
• They (and your tenants) can also apply for a Rent Repayment order
• You won’t be able to serve a valid section 21 notice

So basically, you won’t be able to charge rent, past rent will have to be paid back, and you won’t be able to evict your tenants.

So, my advice is to make sure you are at least registered.

My understanding is that Rent Smart Wales are more interested in ensuring that landlords are registered than bringing prosecutions – but don’t count on it. The first successful prosecutions have already taken place.

The Renting Homes (Wales) Act 2016 – A New Statutory Code

This act is the reason why Wales is excluded from all the recent regulations that have been introduced in England. Under this act Wales is going to have a completely new statutory code.

The inspiration for this is the Renting Homes project carried out by the Law Commission which was published in 2006 but which was never taken up by Westminster.

We had a Conference in Cardiff in 2015 specifically on these changes and you can see a talk by the former Law Commissioner Martin Partington discussing the changes here.

Although the act has been passed it has not yet come into force and I am not going to discuss its provisions here – other than to say that tenancy agreements will be mandatory and they are looking at having prescribed tenancy agreement forms.

If you are registered with Rent Smart Wales you will be kept up to date no doubt with developments.

We will also be adding to our Wales section on Landlord Law, in due course, when we know what is happening.

In the meantime, the law in Wales at the moment is more or less as it was in England before the Deregulation Act changes.

Summary of differences

Here is just a quick summary of the differences as of now (although some of this will change once the Renting Home (Wales) Act comes into force):

Still the same (at the moment) –

• Tenancy Agreements (but this will change under the new Act)
• Consumer Law (mostly but some regulations just in England)
• Housing Health and Safety Rating System (save that the new enforcement rules discussed in this post are just in England)
• Landlords Repairing Obligations
• Tenancy Deposit Rules
• HMO rules (although different LAs will have different schemes and the new enforcement rules discussed here are just in England)
• Leaseholder Landlord issues
• The Court Procedure Rules

Different

• Right to rent checks – not applicable to Wales (but may be introduced later)
• Deregulation Act changes to section 21 – only apply in England
• The new enforcement measures discussed here – only apply in England
• The Smoke and Carbon Monoxide regulations – only apply in England

(Note that this is not a complete list)

Further information:

The best place to find out more is the Rent Smart Wales website.

Because we love Wales and the Welsh at Landlord Law I am also making available foc for a limited period, a talk from our 2015 Wales Conference on section 21 in Wales >> here. You can thank me by buying one of our other ‘paid for’ courses

Sub-letting fees should not be more than £40

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Sub-Letting Licenses: (SOLITAIRE) LIMITED Appellant and CHERRY LILIAN NORTON and other cases [2012]

Landlords of buy-to-let flats which are leasehold are often asked to pay a fee (sub-letting licence or registration fee) to the freeholder when seeking permission to sub-let their flat, and this fee is usually due each time a new tenancy is signed.

This is a “nice little earner” for the freeholder, but some freeholder landlords and their managing agents abuse this by charging buy-to-let landlord exorbitant fees.

However, a binding ruling by the Upper Chamber (Lands Tribunal) 2012 should be quoted in all correspondence where freeholders or their agents are demanding sub-letting fees of more than £40 plus VAT, which are not specified in the lease

UPPER TRIBUNAL (LANDS CHAMBER)

These fees charged by freeholders are an endless source of resentment between flat owners and freeholders, and in the scheme of things are small beer to the freeholder, but when the charges are excessive, that’s when people get really annoyed.

Now though, flat owners have this ruling on their side. The upper tier Land Tribunal has decreed that following four different cases brought before it, sub-letting fees should be limited to £40 plus VAT.

So, in practice, any flat owner billed with an amount in excess of this should simply offer up that amount and quote the ruling, which should mean that that will be the end of the matter.

These sub-letting fees vary quite a bit, but charges of £100 plus have been common up to this ruling, and indeed since.

The four appeal cases were brought by landlords to the Land Tribunal in February 2012 and they were heard together by George Bartlett, QC, president of the Upper Tribunal.

In all of these cases the leases made clear that the properties could not be rented out “without the prior written consent of the lessor and the management company, such consent not to be unreasonably withheld or delayed”.

The landlords had argued that preparing and registering the sub-letting agreement (licence) involved a considerable amount of work, but the tribunal was having none of this:

Mr Bartlett QC concluded:

“The appellants seek to justify the consent fee in terms that apply to all consents, and they do so by setting out a list of work that, it is claimed, their agents do.  It looks to me to be a list of all the things that could conceivably be done in connection with the grant of consent rather than the things that would need to be done in a typical case or that were in fact done in the cases under consideration”

In all four case the QC concluded “that a fee greater than £40 plus VAT could not be justified, and I determine that this amount is payable.”

Freehold, Shared Freehold or Leasehold?

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£250 million Bitcoin Development!

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Two developers Douglas Barrowman and Baroness Michelle Mone OBE have started a £250 million development in Dubai of two luxury apartment towers and a shopping mall.

The first 150 apartments can be purchased off plan from the developers using the cryptocurrency Bitcoin.

Studio apartments can be purchased from 33 BTC, with additional interior design requests and furniture also available for purchase with Bitcoin.

The development is planned for completion in the summer of 2019 and comprises of 1,133 studio, one and two bedroom apartments. This coincides with Brexit so maybe the developers know something we don’t!

Chairman of the Knox group, Douglas Barrowman, said: “This is a project I have worked very hard on for some time and the Dubai development is the pinnacle of design, architecture and commerciality.

“Bitcoin’s meteoric rise in a few short years means it’s now the world’s leading cryptocurrency. This is exactly why we are the first property development ever to be priced in bitcoin.

“I believe, as it gains mainstream adoption, many will follow our lead on this.”

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Form 17 to split income?

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I have two properties on my sole name and I am a 40% tax payer. However,my wife has no income at all.

I am looking to enter her on the deed by transferring her 50% of the equity on these properties.

She will be hit with a tax bill of £3750 on £125,000 but we are ok with this.

Can I then use Form 17 to split the income 90/10 in her favor ?

Many thanks in advance.

Ridvan

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