Section 21 set for the chop…

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BREAKING NEWS: Tenant Evictions:

The government today announced that it will now consult on the possibility of removing the landlord favoured section 21 eviction process.

With Labour pledging to remove section 21 and the government
coming under increasing political pressure to ease the burden on tenants – it needs
their votes – it looks inevitable that the end of section 21 is nigh!

Introduced under Margaret Thatcher’s 1979 elected Tory government,
the measure acted to de-regulate the sector and encouraged a near 30-year
growth spurt for the private landlord buy-to-let sector.

Its key effect was to assure landlords that they could let
properties, safe in the knowledge that if things went wrong – chiefly when
tenants stopped paying rent – they could get their properties back relatively
quickly, usually within 6 months.

Despite assurances that there will be safeguards, sceptical
landlords have little faith in the alternative. That’s a slow and outdated
county court system where landlords, faced with a delinquent tenant, will be forced
into an adversarial system, trying to prove that the tenant has done wrong.    

Given all the regulations, tax penalties and constant media attention the private rented sector has received, private landlords could perhaps be forgiven for feeling that government and the general public no longer value the contribution they make – providing housing for working, professional, and social tenants.

The proposed measures, the government says, will provide
greater certainty for tenants and make the housing market fit for the 21st
century, whilst creating a more secure rental market for landlords in which to
remain and invest.

Prime Minister Theresa May has said:

“Everyone renting in the private sector has the right to
feel secure in their home, settled in their community and able to plan for the
future with confidence.

“But millions of responsible tenants could still be uprooted
by their landlord with little notice, and often little justification.

“This is wrong – and today we’re acting by preventing these
unfair evictions. Landlords will still be able to end tenancies where they have
legitimate reasons to do so, but they will no longer be able to unexpectedly
evict families with only 8 weeks’ notice.

“This important step will not only protect tenants from
unethical behaviour, but also give them the long-term certainty and the peace
of mind they deserve.

Communities Secretary, Rt Hon James Brokenshire MP, has said:

“By abolishing these kinds of evictions, every single person
living in the private rented sector will be empowered to make the right housing
choice for themselves – not have it made for them. And this will be balanced by
ensuring responsible landlords can get their property back where they have
proper reason to do so.

“We are making the biggest change to the private rental
sector in a generation. We are creating homes, opportunities and thriving
communities, where people can come together and put down roots, bound by a
strong sense of belonging.

“Everyone has a right to the opportunities they need to
build a better life. For many, this means having the security and stability to
make a place truly feel like home without the fear of being evicted at a
moments’ notice. We are building a fairer housing market that truly works for
everyone.�

Government announces end to unfair evictions

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Councils still failing to tackle bad landlords

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Rogue Landlords:

Despite the introduction of countless new laws to help
councils tackle rogue private landlords, they are still letting down tenants
who are housed in below standard and in many cases unsafe accommodation.

A new and powerful tool available to local authority housing officers is the “Rent Repayment Order�, but evidence produced by the Residential Landlords Association (RLA) shows that Councils across England are failing to use the extra powers they have been given to tackle bad landlords.

A recent parliamentary question and answer revealed that
during the 18 months to the end of September 2018 just three Rent Repayment
Orders had been made by local authorities across the country.

Where the rent is paid to the landlord directly by a tenant,
the tenant now has the same rights as councils, that is, to apply for a Rent
Repayment Order. Apparently, 18 tenant applications have been made over the
same period.

Since April 2017 councils have had this same power to reclaim up to 12 months of rent from private landlords for a range of offences in instances where rent was paid through Housing Benefit or the housing element of Universal Credit.

Other offences relate to the licensing of rented property, failing
to comply with an Improvement Notice, and seeking to evict tenants illegally or
engaging in harassing behaviour.

In the time since the new civil penalty powers were introduced in April 2017, RLA research has shown that councils are already failing to use their new powers to fine landlords up to £30,000 for failing to provide acceptable housing.

Freedom of Information requests by the RLA have found that
in 2017/18, nine out of ten (89 per cent) of local authorities did not use
these new powers. Half, say the RLA, reported that they did not even have a
policy in place to use them.

David Smith, Policy Director for the Residential Landlords
Association, said: “Councils are failing tenants and good landlords.

“For all the talk about them needing new powers, the reality
is that many are not properly using the wide range of powers they already have
to drive out criminal landlords.

“Laws without proper enforcement mean nothing. It is time
for councils to start acting against the crooks.�

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Section 21 ban proposed by First Minister of Wales

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Mark Drakeford AM, the Leader of Welsh Labour and First Minister of Wales announced that the Welsh Government will be banning Section 21.

With the Government’s own data showing that it takes over five months from a private landlord applying to the courts for a property to be repossessed to it actually happening

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Housing market dragging, Tenant demand up, Landlord supply down

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The latest RICS Residential Market Survey remains subdued in March and looking ahead, the lack of momentum is likely to continue for a while longer. Click here to download the full survey. Enquiries from new buyers saw the eighth negative reading in a row

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Should landlords fear the growth of the corporate landlord?

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Institutional Build-to-Rent:

There is no doubt that projected growing high tenant demand,
and active government encouragement, is leading to the rapid growth of build-to-rent
housing provision. But how much will this affect the traditional private
landlord?

The government is putting great store by its policy of
discouraging the growth of the small-scale landlording sector, and encouraging
the large-scale institutional property investor to provide a lot of the housing
that will be needed in the future, particularly in the larger cities.

So far the strategy seems to be working. The growth of
small-scale buy-to-let is tapering off, and large scale-investments in large
blocks of professional and student housing is surging, with new-builds springing
up everywhere in London and the provinces, particularly in the inner cities.

What could be described as a boom in corporate investment, means
that large-scale landlords in the UK, backed by institutional finance, have
entered the market with enthusiasm. Build-to-rent blocks are springing in major
UK cities intent on what these investors have claimed, is about to “shake up� a
private rented sector (PRS), until now a largely cottage industry dominated by
individual buy-to-let landlords.

Where the small-scale landlord is often depicted as
amateurish and not quite kosha, the big boys promise professional management,
high-end accommodation and services, and stable pricing all designed to provide
long-term renting.

However, build-to rent, although it is growing fast, has a
long way to go before it makes a large dent on the small-scale rental market. Around
97% of the UK stock of rental accommodation is provided by small-scale
traditional buy-to-let landlords, many of them owning just one or two properties.

According to a recent Financial
Times (FT) article, most tenants occupying the new build-to-rent blocks
come from the upper quartile of renters, those with professional or skilled
jobs with above average incomes, though some of the developers says they will
be targeting families with long-term letting in mind.

For those looking for high-end facilities, such as sports
clubs and gyms on site, in shiny glass towers, the formula should work just fine,
but not everyone is happy with the service they are getting, and with Knight
Frank predicting average net yields of only around 3.9% by 2022, it leaves the
big investors with little room for error.

Councils have been notorious for bad management of their
rental properties in the past, from a poor maintenance service, to poor rent arrears
records, these new “professionals� have yet to show they can do better.

The signs are already ominous. A recent survey conducted by
the FT showed that several of their readers had had serious issues. From a
dozen respondents renting from corporate landlords, nine of them reported
problems, from poor maintenance to rising damp and vermin infestation. “I won’t
ever rent from a large company again. Individual private landlords have been
infinitely better and more accommodating,� one respondent told the FT.

Jacqui Daly, director of residential investment research and strategy at Savills had said, “I don’t think build-to-rent is ever going to be for everyone,� but “more and more Britons are likely to be renting from companies rather than individuals in coming years, which should offer greater certainty for many tenants.�

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Excessive charges for HMO damage?

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I was guarantor for my son when he had a room in a shared house. He caused some damage to the room so when he left, the landlord sent me a bill. However he has charged over and above the cost of replacement furniture

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Steer clear of any investment in ex-office blocks

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Office Blocks, converted to Residential Occupation, fulfil an immediate need but are not a sensible investment for Private Sector Landlords (PSLs) in Provincial Towns! My advice is do not buy a sub-lease in a Housing Warehouse. Planning consent is not required for such conversions and they are filled with drug addicts

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Section21 4a or 6a – What am I missing?

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I have a tenancy which started in March 2014 and went periodic in September 2014. I have served a section 21 4a notice on my tenant as of February 2019, however I have been told that this is not the correct notice and could be thrown out of court and that following the introduction of the additional legislation to the deregulation bill in October 2018 I should of used a 6a.

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Paragon – Landlords taking action to mitigate higher tax costs

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Landlord action to mitigate higher tax costs will lead to a lower level of buy-to-let remortgage transactions going forward according Paragon’s PRS Trends Report for Q1 2019. Nearly six out of ten (58%) landlordsreported an increase in their 2017-18 tax bill.

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CIH calls for regulation of short-term lets

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Airbnb:

Airbnb-style lets must be regulated because they are displacing
communities, that’s according to the Chartered Institute of Housing (CIH). 

The CIH is calling on government and local authorities to
regulate Airbnb style short-term lets following its recent research. The
findings show that the growth of these and other mainly on-line letting
arrangements are starting to change the character of local communities by
displacing long-term residents.

Despite the fact that short-term lets such as Airbnb have
helped both tourists and some landlords, the trend, “risks contributing to the
loss of private rented homes for families and individual residents because
homes are rented short term to holidaymakers instead,� says The CIH.

The findings come as the CIH’s publishes its UK Housing
Review 2019, which says that Airbnb alone has made more than 77,000 lets in
Greater London alone, 55% of these being entire homes. Most of these lets are concentrated
around the boroughs of Westminster (8,328), Tower Hamlets (7,513) and Hackney
(5,907).

Scotland also figures in this short-term letting growth with
Edinburgh supporting over 10,000 short-term lets, and the city centre ward
alone having two Airbnb lets for every 13 homes. In rural Scotland, areas
popular with tourists, such as The Isle of Skye, there’s one Airbnb-let
property for every 10 houses.

The report raises the prospect that many of these lets have
migrated from the private rented sector (PRS) to the short-term lettings sector
for part of each year, and the Institute has even greater cause for concern, it
says, if these are becoming permanent short-term lets, no longer available to
locals.

“Increasing short-term lets could result in the loss of
communal spaces or facilities, as well as impacting the local housing markets,�
the report says.

The CIH is calling on central government and local
authorities to collect better data on these short-term lettings so that
councils can keep track of their growth and their locations. This is something
that is happening in other cities around the world as the Airbnb phenomenon has
grown.

The CIH report is suggesting that a “modest local tourism
tax� would assist local authorities in the monitoring and regulation of the
short-term lettings sector, and could lead to capping the number of short-term
rentals in particularly high-pressure areas.

Terrie Alafat, chief executive of the CIH, has said:

“Digital platforms like Airbnb have brought great
convenience to tourists who come to enjoy our cities and communities, as well
as economic benefit to their hosts and local areas.

“However, if left unregulated, there is a real risk of loss
of much-needed housing from the private rented sector to the short-term lets
market, and displacement of long-term residents. We need to find a way to
accommodate the housing needs of individual residents while allowing tourism to
continue in our most popular locations.

“More regulation could be necessary if growth continues and local authorities still have no way to accurately monitor numbers.�

UK HOUSING REVIEW 2019 from the Chartered Institute of Housing

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