Hamilton Fraser’s Property Podcast – ‘The residential laws of the land’

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The property industry is in a
state of flux, with a number of new laws and legislation impacting on landlords
and letting agents. Failure to keep up to speed with industry updates can be
costly for landlords and letting agents alike.

With this in mind Hamilton Fraser’s
latest property podcast featuring Eddie Hooker, CEO of award winning Hamilton
Fraser Total Landlord Insurance and Paul Shamplina, Founder of Landlord Action
and Brand Ambassador at Hamilton Fraser, are joined by special guest Tessa
Shepperson, residential property lawyer and Managing Director of Landlord Law.

Tessa started Landlord
Law, a website dedicated to providing landlords with
information on their legal rights and obligations, back in 2001 and has been
providing content and advice ever since. This includes Tessa’s popular ‘Landlord Law’
blog which keeps landlords informed
of ever changing legislation, as well as her popular ‘Blog Clinic’ which
addresses landlord or tenant legal issues.

In this podcast episode Eddie,
Paul and Tessa talk all about the ‘residential laws of the land’, with a
particular focus on government plans for landlords, the importance of using the
right documentation, landlord redress and housing courts as well as what
happens when landlords fail to protect deposits. They also ask Tessa for the
best tips she can give to landlords in today’s industry and whether she thinks current
laws help or hinder landlords?

Wrapping up with their new closing question for 2019 Eddie and Paul ask Tessa; ‘If you could make one new property law what would it be?’

You can also find out more information
related to property industry legislative change in our latest guidance ‘Legislation
for landlords: Everything you need to know’.

Missed the previous podcasts in the series?
Don’t worry you can catch up with industry news here!

Previous guests include:

• Tony Gimple,
  Founding Director of Less
  Tax 4 Landlords
• Jeremy Leaf,
  Principal of Jeremy Leaf & Co Chartered
  Surveyors and Estate Agents
• Arden
  Hanley, Property Educator and HMO landlord
• Sean Hooker,
  Head of the Property Redress Scheme
• Kate
  Mutter-Bowen, Head of Tenancy Deposit
  Protection at mydeposits

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Hamilton Fraser’s Property Podcast – ‘The residential laws of the land’ | LandlordZONE.

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Scrap Right to Rent organisations tell Conservative hopefuls

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Righ-to-Rent:

THE candidates to become Conservative Party Leader are being
urged to scrap the controversial Right to Rent scheme.

A coalition of organisations made up of the Residential
Landlords Association, the Joint Council for the Welfare of Immigrants and
the3million which represents EU citizens in the UK have united in calling on
Jeremy Hunt and Boris Johnson to scrap the policy after the High Court ruled it
causes discrimination against British ethnic minorities

Under the policy, private landlords face potential
imprisonment of up to 5 years if they know or have â€œreasonable cause to
believeâ€� that the property they are letting is occupied by someone who
does not have the right to rent in the UK.

It was introduced by Theresa May when Home Secretary as part
of the Home Office’s hostile environment.

The call for its abolition follows damning criticism by the High Court earlier this year that the Right to Rent breaches human rights law because it causes racial discrimination that otherwise would not happen.

Following a Judicial Review of the policy secured by the JCWI and supported by the RLA, the presiding judge concluded that discrimination by landlords was taking place â€œbecause of the Scheme.â€� In his judgment he said thatdiscrimination by landlords was â€œlogical and wholly predictableâ€� when faced with potential sanctions and penalties for getting things wrong.

The Chief Inspector of Borders and Immigration has also
concluded the Right to Rent had â€œyet to demonstrate its worth as a tool
to encourage immigration compliance�.

David Smith, Policy Director for the Residential Landlords
Association, said:

“The Right to Rent has been a failure. No one has been
prosecuted under the scheme but it has created a great deal of anxiety for
landlords who do not want to go to prison for getting it wrong.

“Landlords should not be used to cover for the failings in the
UK Border Agencies.�

Nicolas Hatton, CEO of the3million said:

“Two-thirds of EU citizens in the UK live in
private rented housing and will be affected if this failed scheme continues.
 

“We are already seeing that landlords are less likely to
rent to anyone without a British passport, and uncertainty about Brexit
added to the hostile environment will only increase the
discrimination EU citizens are facing. We urge the UK government to scrap
this scheme and end the discrimination.”

Chai Patel, Legal Policy Director of the Joint Council for
the Welfare of Immigrants, said:

“The Home Office is now arguing in its appeal that it is
justified in causing racial discrimination against British ethnic minority
families struggling to find a home. It is arguing that black and brown
British people’s dignity, humanity, and rights can be tossed aside to pursue
Theresa May’s Hostile Environment.  

“That cannot be acceptable in modern Britain. The new Prime
Minister must commit to ending landlord immigration checks, and the
discrimination they causeâ€�.    

·   The full High Court ruling on the Right to Rent can be accessed here

·    JCWI’s briefing to MPs following the High Court judgment here 

·    The RLA’s most recent research on the Right to Rent can be accessed here

·    The Independent Chief Inspectors of Borders and Immigration report on the Right to Rent can be accessed here  

The foreword notes:

“Overall, I found that the RtR scheme had yet to demonstrate
its worth as a tool to encourage immigration compliance, with the Home Office
failing to coordinate, maximise or even measure effectively its use, while at
the same time doing little to address the concerns of stakeholders.�

·  Research by Oxford University’s Migration Observatory notes: â€œThe foreign-born population is almost three times as likely to be in the private rental sector (41% were in this sector in the second quarter of 2017), compared to the UK-born (15%).â€� Further details can be accessed here

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Scrap Right to Rent organisations tell Conservative hopefuls | LandlordZONE.

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The Government Fails to Inform Tenants of Their Rights and Responsibilities…

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Information:

The Government urgently needs to provide tenants with better
information on their rights and responsibilities if it is to avoid a breakdown
of trust between renters and their landlords, the National Landlords
Association warns.

New research, commissioned by the NLA, found that over three
quarters (79%) of tenants need better information about what they should expect
from their landlords or agents.

Worryingly, the NLA also found that more than two thirds
(67%) of tenants were not aware of the Government’s How To Rent guide that is
designed to help them understand their rights and responsibilities. The guide
provides tenants with key information on what to look out for before renting,
living in a rented home, what happens at the end of a tenancy, and what to do
if things go wrong.

Most tenants have a good relationship with their landlords.
In the survey, 68% of tenants said they never had any cause to complain to
their landlord. A further 12% said that when they had complained, the problem
was solved to their satisfaction. But the NLA is concerned that tenants’
failure to fulfil their responsibilities will undermine their relationship with
landlords.

Richard Lambert, CEO of the NLA, said: “It is alarming that
so few tenants seem to know about the Government’s flagship guide on their
rights and responsibilities. It’s clear that compelling landlords to give
tenants copies of the How to Rent Guide has made little impact.  Unless the Government tackles this problem
quickly, there is a danger that there will be a breakdown of trust between
landlords and tenants at a time when this relationship is already coming under
strain because of overregulation in the PRS.�

*NLA Tenant Survey Feb 2019, fieldwork conducted by Dynata
(885 respondents)

The National Landlords
Association (NLA) is the UK’s leading organisation for private-residential
landlords, with 40,000 landlord members, ranging from full-time landlords with
large property portfolios to those with just a single letting.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The Government Fails to Inform Tenants of Their Rights and Responsibilities… | LandlordZONE.

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Tenants can sue landlords for cold or damp homes under new laws

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New rules that came into force in March allow tenants to sue landlords for issues like cold and damp. A broken heating system or poor ventilation that leads to damp conditions could now leave landlords in hot water. If the property owner doesn’t carry out the required repairs or doesn’t complete them within the right timescale, the tenant will have the option to take them to court. If this happens, the judge will then be able to issue an injunction which compels the landlord to the necessary repairs.

Why the changes?

Cold and damp aren’t just inconvenient, uncomfortable and unsightly. Both can lead to health problems and aggravate existing health problems, particularly in the young, elderly and vulnerable. It can aggravate allergies and even cause flare-ups of skin conditions like eczema. Moulds can also cause asthma attacks, which can be fatal in some cases.

How many people live in unsafe accommodation?

According to the housing charity Shelter, there are over 1 million homes in the UK which are not fit for habitation but that are tenanted. This means that there could be over 2.5 million people living in unsafe conditions. In 1985, a new law came into play that made it the responsibility of the local council to check that conditions were satisfactory.

Due to ongoing cuts to public services and local councils, checks on properties have been infrequent and sometimes even non-existent. This has left tenants with no recourse and unscrupulous or absent landlords have been more than happy to take advantage of this loophole. As any homeowner will know, damp and cold aren’t conditions that will go away on their own, so conditions are only getting worse as time goes on.

What do the new rules say?

The new legislation is called the Homes (Fitness for Human Habitation) Act will replace the 1985 law. The purpose of this new law is to make landlords accountable for the homes they own and give tenants legal recourse in the event that conditions aren’t livable.

The law will require landlords to ensure that their properties are up to scratch before they are let, but also maintain standards throughout the lifetime of the tenancy. For the first time, the law will also cover defective design rather than just properties falling into disrepair. This can include anything from poor ventilation and heating problems to infestations of insects or vermin.

This could impact the buy-to-let market significantly as landlords will need to ensure properties don’t have any underlying issues before they add to their portfolio. With more people renting than ever before and the buy-to-let market driving up the prices of properties, it could serve a significant blow to landlords earnings.

The new law is far more extensive than anything that has come before it. It can include any of the following:

• Repair issues
• Stability and structural problems
• Damp
• Internal layout
• Natural light quality
• Ventilation
• Drainage and sanitary provisions
• Water supply issues
• Food preparation facilities
• Waste disposal facilities
• Hazards that fall under the Health and Safety Rating Ruling

There is a new clause called the Grenfell Clause which will also allow tenants to take action against the landlord over common areas in buildings. This will empower anyone to take action and won’t require the cooperation of everyone in the building. This is one section of the legislation that Shelter was keen to push through.

What can landlords do?

If landlords are aware of any issues affecting their properties, the best course of action is to make arrangements to have them changed or repaired. In cases where the damp is an issue, damp companies like Tapco HomeDry can help to identify and fix the root cause of damp. Rather than waiting for tenants to complain, it’s best to be proactive.

Regular inspections of properties are essential in order to be able to spot issues. In some cases, educating the tenant about how to properly ventilate a property can help to stop issues before they become more damaging and complex. In the case of older properties, regular inspections are essential.

How long do landlords have to do repairs?

It all depends on the severity of the problem. In cases where there is a risk to life, health or security, the issue needs to be resolved in 24 hours. For issues that will impact the comfort and convenience of the tenant, the landlord will have three days to make the repairs. All other issues will need to be addressed within 28 days. The new rules will not only give tenants the option to take action if work isn’t carried out but also if work isn’t carried out quickly enough.

With the number of people living in rented accommodation at an all-time high, these are welcome changes for tenant advocacy groups like Shelter.  According to the charity, over 1.85 million tenants have faced issues with landlords not meeting the above timescales in the past four years.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tenants can sue landlords for cold or damp homes under new laws | LandlordZONE.

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Fund Your Next Property Deal On a ‘Dragons den’ style TV show on Sky

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Are you looking to raise finance for a property project?

Do you fancy pitching for funding on a ‘Dragons Den’ style television show on Sky?

If so email me and I will send you the application form.

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Is the Buy-to-Let doom and gloom “overdone�?

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Buy to Let Investment:

Has the recent negativity about buy-to-let been overdone?  

People have always turned to residential property as a good
solid investment that they can understand; a means of supplementing their
income and their future pension. But will this change in the future, will
people look to other types of investment?

So what’s changed? Two things really: first the tax regime has
been altered so that for many people the income returns from letting property are
not as lucrative as they were. Secondly, the regulatory regime is changing fast,
making it more onerous on landlords to comply with the lots of new rules being
introduced – in short, it takes a lot more effort than it did in the past to
manage rental property well.

Let’s face it, change was needed: first buy-to-let was
running away with itself; people were going crazy building large-scale
portfolios of rental property, all based on borrowed money, leap-frogging from
one property to the next by withdrawing cash as values increased and buying still
more – some made a fortune, others went bankrupt because they just got carried
away.

There could only be one end to all this, so the government
acted. Secondly, the media and homelessness charities constantly highlight the
predicament of the vulnerable tenant, set against the “greedy� and, admittedly,
an army of rogue landlords. This had to change as well, so the government regulated.

But that’s not to say that buy-to-let is dead and buried, as
many of the more hyperbolic headlines would have us believe. Buy-to-let mortgages
are easily obtainable at record low interest rates, basic rate taxpayers are
largely unaffected, there are ways to avoid the higher tax rates for portfolio
landlords, and there’s record demand for rental accommodation. Returns (rental
yields) from letting property still far outweigh the paltry interest rates available
from even the best internet savings accounts.

There is plenty of evidence to suggest that the majority of
landlords still view buy-to-let as a money-making asset class, says John
Goodall, chief executive of specialist buy-to-let lender Landbay quoted by ftadviser.com,
but there are still undoubtedly some who feel that now is the right time to
exit the market.

But while people are selling opportunities are created. There’s
bit of contrarian investment wisdom that says: the thought that investing is
done in exactly the opposite way to the crowd, buying when most people,
including all the experts, are pessimistic, and selling when they are actively
optimistic. The best values are often found in the markets that were once hot
and have since gone cold.

There’s more than one tax and regulatory change to have hit
landlords’ profits over the past few years, including the removal of the 10% “wear
and tear� allowance, a 3% stamp duty surcharge for second properties, and of
course the dreaded Section 24 mortgage tax relief cuts, all of which put a drag
on income.

But the buy-to-let market is probably in better shape than
many people might think, says John Goodall. The Landbay lender says there’s
always been a churn in the market. Of course there are some people selling up
property and getting out of the market but that’s always been the case.

“At the moment, the highlight is on those selling
rather than those buying. But those buying do still exist. Some small
buy-to-let investors are getting out but it’s still only a small fraction,”
he thinks.

As evidence, Mr Goodall cites UK Finance’s figures which
show that the buy-to-let market grew from £237bn to £243.9bn over the course of
2018 — an equivalent growth rate of 2.7 per cent.

The changes are more likely to scare off amateur
landlords with one or two properties, and inevitably the industry may be headed
towards a more professional industry – attracting those landlords who are
willing to understand the rules and regulations, keep their costs low, finances
in control and manage tenancies efficiently.

Yes, it’s no longer possible to let in a casual let-it-and-forget-it
way, but with a little effort, a bit of homework and due diligence on the part
of the average landlord, and the profits are still there. What’s more, property
has proved to be an excellent store of value if inflation returns, and
long-term values only go one way.

Standards are rising, the industry, like most others, is
getting more competitive, which can only be a good thing for the consumer
(tenants), but there’s money to be made for those who are willing to run their
lettings efficiently.

Mr Goodall concludes: “I think it’s far better for the
tenants to think their landlord is committed to it and that they are not just
in it for the short term.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Is the Buy-to-Let doom and gloom “overdoneâ€�? | LandlordZONE.

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Landlords do not understand BTL changes

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Buy-to-Let Changes:

Buy-to-let landlords
are finding it hard to keep pace with all the changes going on in the UK
letting sphere of late, so much so that many of them risk falling foul of the
law.

By far the majority
of UK landlords are part-time (they let property as a side-line to a full time
job), they own less than five rental properties, more commonly just one or two,
only a minority belong to any of the landlord associations, and it’s unlikely that
most visit websites such as LandlordZONE.

Landlords are a
diverse group, difficult to reach by any form of conventional communications
media, therefore it takes time, sometimes months and even years, before legal
changes filter through. Some let property on a very casual basis, even to the
point of having no written agreement, and of course the rogues in the industry
flout the law ad infinitum.  

According to FTadvisor.com, Market Financial Solutions, an independent bridging finance provider, surveyed around 400 landlords to see how the new tenancy information was getting through to them. The company found that around 30% of respondents were unaware or failed to understand the October 2018 changes to Houses in Multiple Occupation (HMO) licensing, a measure that importantly altered the scope of landlords’ duties in relation to obtaining an HMO licence.

In addition, roughly 28% cent of landlords were unaware of the government’s consultation on the no-fault Section 21 eviction process. Section 21 is a major plank in the 1988 Housing Act’s Assured Shorthold Tenancy (AST) allowing landlords to evict tenants at the end of their tenancy without reason, when necessary.

Much other legislative change, such as the recent Tenant Fees Ban, which became law from the 1^st of June, is also already a cause of confusion. Around 27% of those questioned were not aware or uncertain about the ban, with a further 19% stating they were unsure how or if it would affect them. The tenant fees ban will prevent landlords and agents requesting most letting fees, it caps security deposits taken and restricts holding deposits, which must be returned in most circumstances. Any transgression could potentially mean heavy penalties.

The Section 24 tax reforms are another source of much confusion, not surprising given their complexity, but this is a major change which affects the profitability of all letting activity and something every landlord with an eye to financial returns should be aware of.

The feelings elicited by the survey found that landlords in
general were not in favour of all the changes and saw them basically as
anti-landlord in nature. Nearly 44% said they were against the letting fees
ban, with only 23% in favour. Only 16% agreed with the proposed abolition of
Section 21 evictions and the buy-to-let taxation changes.

Paresh Raja, chief executive of Market Financial Solutions,
told FTadvisor.com :

“The legislation and regulation governing the UK’s
rental market is constantly evolving, and this research clearly shows that
landlords are struggling to keep pace with the change.

“From HMO regulations to the abolition of Section 21,
these are significant reforms that, for the most part, are rightly designed to
protect tenants.”

Mr Raja said there was evident frustration among landlords, many
feeling they were being unfairly targeted, especially in regard to a stricter
tax regime, but he said it was nevertheless essential that those renting out a
property understand all the new reforms.

Carl Shave, director at Just Mortgage Brokers, also told the
FTadvisor.com that it was “of no
surprise that landlords were finding it tough to keep abreast of legislation
when there was such an onslaught of changes in the sector.�

“Rental property owners together with the assistance of
agents and advisers need to ensure the messages are getting through.

“The rental market is experiencing a change in its
landscape with much of the current emphasis being on the tenant that arguably
has been too easily dismissed in the past, but landlords serve a very
valid role in housing and the right balance needs to be struck to ensure this
continues,” he said.

National Landlords Association director of policy and
practice, Chris Norris, said:

“The government’s haphazard approach had been confusing and
damaging to both landlords and tenants, and stressed there needed to be a clear
and more cohesive approach to regulation.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords do not understand BTL changes | LandlordZONE.

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Birmingham’s Urban Quarter and the Big City Masterplan

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Our fantastic ‘early bird’ opportunity at Park View will capitalise on the vibrancy and growth that this dynamic and thriving area is set to deliver.

We are delighted to have secured for our clients these amazing investment properties within a great location

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Shelter couple’s “punishment�: self-imposed exile in Cornwall

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Shelter has produced a video, which you can view below, as part of its futile campaign against No DSS adverts.

“Krystyna and her husband Geoff had to return to private renting in their 50s after being home owners when they were made redundant.

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Shelter says new prime minister should abolish s21 to get re-elected

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Section 21:

Shelter claims that since the introduction of the open-ended
tenancies in Scotland (18 months ago) their research shows that Scottish
tenants have been reaping the benefits.

With the May Government’s stated intention to follow Scotland’s
example of ending no-fault evictions, and effectively introduce open-ended
tenancies, Shelter thinks that any future prime minister is more likely to win
a general election if they follow Scotland.

The Private Residential Tenancy (PRT) in Scotland in December
2017 is “helping tenants worry less about becoming homeless, worry less about
getting locked into inflexible fixed term tenancies, and giving them more faith
in politicians,� says Shelter. The homelessness charity goes on to explain:

“Our research shows that Scottish renters on the PRT are
only half as likely to worry about becoming homeless than those on the old
tenancy agreement. The loss of a private rented tenancy makes a significant
contribution to homelessness in Scotland and it seems that the new tenancy,
which gives renters stronger rights, makes people less afraid that they’re
going to lose their home.

“We know how important this is for renters in England, 75%
of whom worry about not being able to find another decent and affordable home
when they are asked to leave. The Prime Minister who finally passes legislation
to abolish Section 21 will bring peace of mind to the four million people
living in the private rented sector.�

Shelter’s argument is that as tenants are an increasingly influential group when it comes to election time, abolishing section 21 not only benefits tenants, it “it promises more trust in the elected officials who give them stronger rights… and [to] win the support of a group of voters who could, sooner or later, have a critical influence in the outcome of a general election.�

And what of the landlords?

What Shelter fails to acknowledge is that without drastic
improvements in the way tenancy disputes are handled outside of Scotland,
abolishing Section 21 and introducing some form of open-ended tenancy, where
tenants can leave at short notice, while landlords are held to a contractual
term, this could be highly detrimental to landlords.

The May Government has committed to ending no-fault Section
21 repossessions, whilst strengthening the adversarial Section 8 process.
However, landlords have little confidence, in the face of 30% cuts to the
Justice Departments budgets, or that any improvements to this slow and
cumbersome county court system would result. Currently it takes on average over
five months from an eviction notice being served to achieving repossession.

One suggested solution has been the establishment of a
national chain of special housing courts, bringing together all housing
disputes under a single body, and supported by 91% of all respondents. However,
much scepticism has been expressed about this citing cost and resources as the
stumbling blocks, given the current public sector economic climate. 

David Smith, RLA policy director, had said that landlord
confidence is vital, stating:

“Security of tenure means nothing unless the homes to rent
are there in the first place.

“With the demand for private rented housing showing no signs
of slowing down it is vital that landlords are confident that they can quickly
and easily get back their property in legitimate circumstances. 

“Whilst the system should clearly be fair to tenants, it
needs also to support and encourage good landlords.

“Our survey shows how complex it will be to ensure that the
grounds on which landlords can repossess properties are both clear and
comprehensive.

“This needs to be underpinned by a court system that is fit
for purpose and properly resourced. At present it is neither.

“It is vital that the government’s planned reforms are
carefully considered to avoid finding ourselves needing to reopen this whole
issue later down the line.�

Meanwhile, Paul Shamplina, founder of Landlord Action, has
written to Housing Minister, Heather Wheeler, inviting her to gain a greater
understanding of the possession process before making drastic reforms. He
implores here to “work together� with landlords on changes to possession
process as landlords will consider selling up if government scraps Section 21.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Shelter says new prime minister should abolish s21 to get re-elected | LandlordZONE.

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