Only 15.75% of NLA landlords now support Tories

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Private landlords have lost faith in the Conservative Party, with only 15.75% of NLA members now saying they would support them in an election. Are Landlords now the elephant in the room for the Tories?

This polling, conducted shortly after the once strongly pro-business party announced its intention to abolish the no fault section 21 possession process and end fixed-term tenancies

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Building Control certificate issued but not communal

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We have come across an interesting wrinkle in building control. We own a lot of apartments in a building (about 25% of the building) and have been issued with LABC building control completion certs for each unit with no caveat on them.

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Privatisation of the Private Sector Landlord

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Make No mistake both The Conservative Party and The Labour Party intend to Nationalise The Private Sector Landlord. The scrapping of the Section 21 Notice, which both are committed to, means just one thing. Lifetime tenancies!

For the Private Sector Landlord (PSL) he will never get his money out and we will be back in the Pre 1989 situation of Lifetime Tenancies which can be passed onto the next generation of tenant.

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Warning: Tenant Fees Ban commences 1st June

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Fees Ban:

The Tenant Fees Act 2019 commences in force from 1st June 2019 and applies to England only for now, but is likely and has the facility to be extend to Wales. Scotland of course already has an equivalent set of legislation.

The new Act restricts payments that landlords and letting
agents may ask a tenant of a residential letting in England to make in connection
with their tenancy, and it includes certain student lettings and residential licences.

The Act also covers the capping of tenancy deposits and
holding deposits, with various conditions attached, and puts restrictions on third-party
contracts that a tenant or guarantor can be contracted to be bound by for
services such as insurance.

It is therefore very important for landlords and agents to
have a clear understanding of these regulations as there are stiff penalties
for failure to comply.

Note: These brief guidelines
are based primarily on English law and are not a definitive interpretation of
the law. There is more detail in the Act itself. Every case is different and
only a court can decide, so seek expert advice before making or not making
decisions.

Effectively, the Act bans all payments a landlord or letting
agent may take from a tenant except those expressly set out in the Act as “permitted�
payments. These are:

1. Rent –
   which will include an advance payment for the first rent period, which must be
   the same as all the subsequent rent payments. In other words, the first period
   cannot be loaded to recover costs
2. Holding
   Deposit – refundable, and no more than the equivalent of one week’s rent,
   with its terms of refund and retention set-out clearly in writing
3. Tenancy
   Deposit, sometimes referred to as a security or damage deposit, again refundable
   and capped at no more than five weeks’ rent, if the total annual rent is less
   than £50,000, or a maximum of six weeks’ rent, if the annual rent exceeds
   £50,00
4. Amendments,
   mid-tenancy, amendments requested by the tenant are capped at £50, unless a
   greater cost can be fully justified.
5. Early
   Termination, payments associated with this when requested by the tenant
6. Provision
   of Utilities, such internet services, telephone, TV licence and council tax
   when appropriate.
7. Default
   Fees, when the tenant defaults on rent payments orother permitted payments specified in the tenancy agreement, including
   such items asreplacement of a lost
   keys, etc.

There is considerably more detail within the Act itself –
see the link below – so landlords and agents should familiarise themselves with
the detail.

There are some severe sanctions for non-compliance for
landlords, letting agents and also for company directors in person. Enforcement
authorities may force the repayment of any prohibited payments together with
interest, tenants can apply to the First Tier Property Tribunal to recover any
prohibited payments together with interest, and landlords and letting agents
may face fines of up to £30,000.

The likely Impact on
Businesses:

Many letting agents, particularly small-scale single
practices may find it has a major impact on their profitability without passing
on the loss of fee income in the form of additional fees to their landlord
clients. In a competitive environment they may find this difficult.

Where the fees are passed on to landlords, in turn their
profits will be squeezed without passing on these costs in the form of higher
rents to their tenants. Again, in a competitive environment this may or may not
be possible depending on the circumstance.

Ultimately though, it is more than likely that rents will
rise overall for all tenants, but it may save those tenants who are regularly stung
by excessive fees by some high street agents. On the other hand, those tenants
who have rented direct from landlords, who don’t normally charge fees, may find
their market rent levels increasing.

Landlords and agents need to think carefully about their business
strategies going forward and adjust their budgeting accordingly, in the
knowledge of how the Act will affect them.

Tenant Fees
Act 2019

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Landlord Action invites Housing Minister to “work together� on changes to possession process as 38% of landlords will consider selling up if Government scraps Section 21

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Founder
of Landlord Action, Paul Shamplina, has written to the Housing Minister,
Heather Wheeler, inviting her to gain a greater understanding of the possession
process before making drastic reforms. 
This comes after a survey¹ carried out by Landlord Action has revealed
that 38% of landlords will consider selling up if the Government goes ahead
with plans to abolish Section 21.  A further
33% said they would only continue being a landlord with significant changes to
Section 8.

The Government has expressed a desire to encourage longer-term tenancies, which
Landlord Action agrees makes sense for those that want them, such as families.
However, with the current average tenancy life-span already four years and one
month, and with approximately 90% of tenants ending tenancies themselves, there
is growing concern that abolishing Section 21 is not the right approach to achieve
this.

According
to the survey, 70% of landlords would be less willing to consider a longer-term
tenancy if Section 21 was no longer available to them, and a staggering 85%
said they would be more selective with their choice of tenant.  “If
this was the case, the Government’s efforts could end up being
counter-productive and harming the most vulnerable tenants� says Paul
Shamplina, founder of the regulated law firm and eviction specialists Landlord
Action. 

He
continues: “Encouraging longer tenancies will
only be possible with major investment in housing courts to help speed up evictions,
which currently take 22.8 weeks from gaining possession to issuing a claim for eviction²,
and clarification regarding new grounds within Section 8 to protect landlords.

“It is clear from our survey that with
so many other obstacles already faced by landlords, such as the introduction of
more regulation, the reduction in the tax relief that landlords can claim on
mortgage interest and a three per cent Stamp Duty surcharge on buy-to-let
properties, there is a real possibility of the but-to-let market significantly shrinking
over the next five years meaning higher rents for tenants.�

With a long pedigree of working with Government on reform and legislative change, for example giving evidence to the Select Committee tasked to reform Section 21, Paul Shamplina, has now written to the Housing Minister, Heather Wheeler.  

Concerned
that, despite the opportunities for tenants, the Government may not have a
clear handle on unforeseen consequences that changing the law around Section 21
will present, Mr Shamplina  has invited
Heather Wheeler to attend Landlord Action’s offices in Borehamwood to see first-hand
the work Landlord Action carries out, meet their team of solicitors and share
their experiences of the court process.  He
has also invited the Housing Minister to attend an eviction with him and see
the reality of what happens on the ground in order to support the government’s
work in formulating policy and new law which presents equal opportunity for everyone
operating in the PRS.

 Â¹ Survey responded to by 263 landlords

²
Ministry of Justice

ENDS

Landlord Action
Public Relations:

Helen
Evison, Landlord Action PR, t: 01276 804411, m: 07920516577

Paul
Shamplina, Founder, Landlord Action, t 0330 134 2857

EDITORS NOTES

About Landlord Action

Landlord
Action is part of the Hamilton Fraser Group of companies, including mydeposits,
Property Redress Scheme, CMP and Total Landlord Insurance.  It is based at the Hamilton Fraser Offices in
Borehamwood.

Landlord
Action is a UK based organisation helping landlords, letting agents and other
property professionals. As a champion for landlords, it has campaigned extensively
and was instrumental in getting the law changed to make squatting a criminal
offence.

It
was founded in 1999 as the first ever fixed-fee tenant eviction specialist,
they revolutionised this area of legal practice. They have now acted in more than
35,000 problem tenant cases and are considered the authority in this field.

Landlord
Action is authorised and regulated by the Solicitors Regulation Authority (SRA
number 605660) and runs a free advice line to help landlords and property professionals
understand their rights: 0330 134 2857

www.LandlordAction.co.uk

About Paul Shamplina

Paul Shamplina is one of the key founders
of Landlord Action with 25 years’ experience in the legal field. He has previously
worked as a legal clerk, private investigator, debt collector and certified
bailiff.

He has appeared regularly on TV and radio and lectures across the UK at landlord seminars and events and still works full time in the office, heading up the team of advisors.

Paul believes passionately in the rights of the landlord and is always available for comment on any landlord/tenant matters.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord Action invites Housing Minister to “work togetherâ€� on changes to possession process as 38% of landlords will consider selling up if Government scraps Section 21 | LandlordZONE.

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38% of landlords will consider selling up if Government scraps Section 21

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Founder of Landlord Action, Paul Shamplina, has written to the Housing Minister, Heather Wheeler, inviting her to gain a greater understanding of the possession process before making drastic reforms.  This comes after a survey¹ carried out by Landlord Action has revealed that 38% of landlords will consider selling up if the Government goes ahead with plans to abolish Section 21.  

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Could the Conservative government be driving Landlords to the Brexit Party

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Dr Rosalind Beck wrote an article for Conservative home titled, ‘It’s not just EU policy that’s driving conservative voters towards the Brexit Party.’ Click here to view the full article.

In this article Dr Beck quotes that 40% of Tory councillors and 60% of Tory activists say they will vote for the Brexit Party and asks if Nigel Farage’s prediction of a realignment of British politics is that far-fetched.

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Protest with Care

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The European Elections are on us next week. If you wish to exercise a Protest Vote then do so with care.

If you wish to not vote for the Party you normally vote for that is one vote less for that Party!

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USB report: “Global property boom is over�

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Property Prices:

It is likely that the property market peaked last year, that’s
according to the multinational Swiss investment bank, USB. The bank predicts though,
that proving interest rates remain low, and cheap credit remains available, rather
than a crash, the property markets around the world are facing the prospect of
a gradual slowdown.

Slowing growth, high asset prices and increasing risks are
indicators of the final stages of the long recovery after the financial crisis
of 2008, warns USB.

Interest rates at near zero since the great recession have
served to keep property asset prices rising, but the signs are that buyers are
stretched finically, and investors are facing low returns, especially on prime
investment property.

“Prices have run out of room to grow in many parts of the
world in commercial and residential property, and the market cycle is thought
to have peaked around nine months ago, the investment bank says, according to a
report by The Daily Telegraph.

While interest rates remain at historically ultra-low rates,
USB suggests that a property crash can be avoided, further supported by a safer
banking regime following the experience of the credit crunch in 2008.

Historical Bank Base
Rates since 1970 – currently at 0.75%

Source: Trading Economics | Bank of England

Thomas Veraguth UBS’s chief investment officer, has said:

“In the past 50-60 years a typical cycle was
overheating, creating higher interest rates as central banks tried to cool down
the economy, and those financing costs killed the [property market] cycle.

“Now we are in a situation where interest rates are
very low, so what we think is going to happen is a much more gradual downturn,
so it is not a crash that we expect. We would really need a severe recession to
drive a big correction, but that is not our base case,” Mr Veraguth told The Daily Telegraph.

Most borrowers, including homebuyers and investors in commercial
property, already enjoy lower interest rates with their fixed interest mortgages
locked-in. This gives borrows some protection against a slump and helps support
the market.

High Street commercial retail property has already seen a substantial
decline in values as changes in shopping habits, including the growth of online
shopping, are bringing about structural changes.

USB forecasts that achieving a gradual slowdown will depend
on market conditions remaining, and borrowing costs low, but there are no
guarantees as central banks have already warned of higher interest rates.   

The International Monetary Fund has warned that housing
markets in some of the leading world economies are overvalued by up to 12%, leading
to fears that a rapid correction could lead to another property slump and a recession.

According to USB, Britain has some of the most expensive
property in the world, so predicts there is little room for growth, and indeed
there will most likely be a fall by “low single digits� in coming months, unless
there is a breakthrough with a Brexit solution.

Although undoubtedly property prices have been pushed to unprecedented
highs following the financial crises, due to ultra-low interest rates and quantitative
easing, cheap money has supported the market until now. Also, says USB, debt levels
secured on property, compared to total bank debt, and pre-crisis levels, is at
its lowest level for 17 years.

So far this year there’s been a slump in first-time buyers
taking out mortgages, numbers falling by 2.4% year-on-year, according to UK
Finance, and home mover sales have dropped by over 6%.

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Tenant Fees Act 2019 – Elephant trap for the unwary!

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Landlords be warned – From 1st June 2019 if you take a holding deposit (which must not exceed one week’s rent) ahead of a new letting, the Tenant Fees Act 2019 says it must be repaid if you go ahead with the tenancy agreement.

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