Government Consultation launched on Tenancy Reform in England

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Tenancy Laws:

As a parting shot from resigning Prime Minister, Theresa May, the UK Government is launching a 12-week consultation on Tenancy Law Reform in England. It is thought the outcome will be a report setting out in detail some major changes – what the Government policy will be on renting going forward.

The Government has already said it wants to prevent private
landlords from evicting tenants at short notice, and without good reason. So
the no-fault Section 21 eviction process is likely to go, if not be drastically
amended.

It has said it will amend the Section 8 eviction procedure
and expedite the court process so that landlords are able to swiftly and
smoothly regain their property where tenants fall into rent arrears or cause
damage. However, given the state of the county court system, many experts are
sceptical that this can be achieved with the current setup.

Any such change as suggested would mean a fairly drastic amendment
to the 1988 Housing Act, in effect removing the 30 years-old Assured Shorthold
Tenancy (AST) regime from the legislation, in order to abolish the Section 21 eviction
procedure.

Views will be sought on:

What impact will removing ASTs have on the market and
landlord and tenants?

Will the reforms include the social rented sector?

When can eviction take place without the tenant being at
fault?

How can the grounds for possession be reformed?

What new grounds would be needed?

How can the Section 8 possession procedure be improved by the courts?

A New Deal for Renting Resetting the balance of rights and responsibilities between landlords and tenants: A consultation, which can be viewed here

The Government has assured that any changes will not be
retrospective – existing tenancies will be unchanged.

The Ministry of Housing, Communities and Local Government is
said to be working with the Ministry of Justice on reforms to the court process.
This could include using more IT, greater digitalisation and an accelerated
procedure.

Separately, there is also a concrete proposal to give
tenants access to the blacklisted landlords database under new government
plans. This new proposal if implemented would give tenants access to a register
which is currently only available to local authorities. It would allow them to
search landlords and letting agents by name to check on their track records.

With the effects of the recently implemented tenants’ fees
ban yet to be felt, the Government must surely be aware there’s a danger that
such rapid change could affect landlord sentiment to the sector negatively at a
time when rented accommodation in many parts of the country is in short supply.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government Consultation launched on Tenancy Reform in England | LandlordZONE.

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Property valuations for tax planning purposes cost just £19.95 each

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Reasons for obtaining property valuations for tax planning purposes include:-

• Transferring properties into a Limited Company
• April 2015 valuations for non-residents to establish base values for CGT calculations
• Establishing revaluation reserves when properties are transferred into an LLP

HMRC can open an ‘aspect enquiry’

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Will Boris ring in the changes in housing?

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Housing Policy:

We’ve seen some momentous changes in politics this week, not just a shuffle around of cabinet posts this time, but an almost total clear-out and a new set of Ministers loyal to Johnson and committed to Brexit. Will he get a grip on housing?

Esther McVey has been appointed Minister of State at the
Ministry of Housing, Communities and Local Government.

Ms McVey will now work with Mr Robert Jenrick, a lawyer by background, who was has been appointed as housing secretary after the incumbent James Brokenshire left the role – now familiar process with housing Ministers, few of whom seem to last long.

Ms McVey, who is the MP for Tatton, held roles as the minister for employment, deputy chief whip, and parliamentary undersecretary for disabled people.

In the past Boris Johnson has been highly critical of the Tories’ housing policy, especially when he was Mayor of London, but has lately praised the Right-to-Buy policy.

Conservative policy has always been to encourage home ownership as opposed to rental housing, whether this be in the social sector or private, so we will have to wait and see how the cards fall under Boris’s new leadership – will the ongoing tenure consultations be curtailed?

With the possibility of an election looming over them, the Tories will be mindful of a housing crisis of considerable proportions. House prices have risen to such an extent that many are now priced out of the home buyers’ market.

However, a rising proportion of renters goes against the
grain: the Tories know that as soon as young people get a mortgage, as soon as
they have a stake in society, (1) they are far less likely to go on strike, and
(2) they are more likely to vote Conservative.

So, the big question on everyone’s lips, certainly those with an interest in housing, as Boris enters Number 10, is: what does he really think about housing? And what is he most likely to do?

Given his propensity to change his mind, and leave the detail to others, pinning down his exact focus and the eventual direction is not easy. But as reported by Inside Housing, reliable sources have said he is considering a funding channel towards part-rent, part ownership, an obvious first step towards encouraging more ownership. This could include a policy move away from social renting, a sector Johnson has been critical of in the past.

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Auctions to Off Plan purchases?

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Yesterday I covered Auctions and today Off Plan purchases. We have a change of Prime Ministers and we must give the lad a chance. Boris needs a Housing Czar!

In my neck of the woods houses are going up like never before

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Robert Jenrick MHCLG Secretary of State and Esther McVey Housing Minister

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After the ‘night of blond knives’ the new PM Boris Johnson has replaced Kit Malthouse with enthusiastic Brexiteer Esther McVey as Housing Minister and replaced James Brokenshire with the lower profile Robert Jenrick as Secretary of State for Housing, Communities and Local Government.

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Number of homes let by company landlords up 42% since 2015 Budget

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The proportion of homes let by a company landlord has been rising steadily since 2016 when the tapering of mortgage interest tax relief for non-company landlords was announced (see notes to editors). Latest 2019 figures show 12% of homes were let by a company landlord

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National Trading Standards Redress scheme warning for agents

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Estate and Letting Agents in the UK are being urged to check that they are signed up with an approved redress scheme that covers the full remit of their work. The warning follows a recent tribunal that penalised a business that was signed up to a redress scheme for its letting agency work but not for its property management work.

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Buy-to-Let drifts towards company ownership

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Incorporation:

The number of privately-rented homes in Britain, rented out
by a landlord company, has risen to around 12% of the British market. Although small-scale
“sole-trader� landlords still dominate the scene, there has been a steady move
towards larger portfolio landlords owning their homes through a limited
company.

The move, which is being propelled by tax changes introduced
a couple of years ago by the then Chancellor, George Osborne, plus the growing build-to-rent
initiative, is now said to be “professionalising�, the sector.

The motives behind the Government’s changes towards
buy-to-let are still unclear: but some experts attribute them to a fear that
buy-to-let was pricing out first-time buyers, that the buy-to-let market was
growing too quickly, leading to extended mortgage debt and financial
instability, and being dominated by small-scale landlords the industry was said
to be harbouring too many rogues.

London landlords are the ones most likely to own a
buy-to-let using a company structure, that’s according to the research carried
out by Hamptons International. It found that around 12% of privately-rented
homes across Britain were let by a company landlord in the first half of 2019 –
this is the highest proportion recorded since 2011, when Hamptons say it was
also 12%.

Hamptons, which uses its own data to make the calculations,
says that in London around 13% of privately-rented homes are now let by
company landlords. Hamptons’ theory is that the increase is due to the growing
size of the rental sector.

Aneisha Beveridge, head of research at Hamptons
International, has said:

“More than one in 10 rental properties are now owned by
private companies, an indication that the sector continues to professionalise.

“Increasing taxation for private landlords combined with the
growth of the build to rent sector has meant that more companies are letting
homes than at any time since our records began.

“London, where landlords tend to have higher levels of debt
and often the most to gain from corporate ownership, has the largest proportion
of homes let by a company.

“However, it’s not always more profitable to put a
buy-to-let into a company as other associated costs come into play.�

Hamptons International
has published the following figures for region by region percentages of privately-rented
homes let by company landlords:

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Auctions – A great start for landlords

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I attended the Clive Emson auction in Maidstone yesterday (23rd July, 2019) and was with my pal Billy Singh at noon when the news came over my mobile telephone that Boris Johnson had won and would be the next Prime Minister.

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Coventry councillors claim buy-to-let landlords are pricing out buyers

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Buy-to-Let:

Councillors in Coventry are claiming that “Buy-to-rent�
landlords are monopolising the housing market in Coventry and “crowding out�
families who are first-time buyers. Policy moves would appear to be leaning
towards discouraging small-scale landlords.

Given that one-quarter of all residents in Coventry are renting
from landlords, a Coventry Council scrutiny co-ordination committee was told, there
are fears that “buy-to-rent� landlords are monopolising the local housing
market and “crowding out� families who are first-time buyers

As reported by the coventrytelegraph.net,
rents in Coventry are higher than the regional average.

The midpoint rent stood at £625 per month between October
2017 and September 2018, it was reported, and it is thought to be contributing
to less disposable household income per head being availably in Coventry –
compared to the West Midlands, and also compared to the national average. This
was stated to be £14,555 in Coventry in 2017, compared to £16,885 in the West
Midlands and £19,988 nationally.

Coventry Council Chair, Cllr Richard Brown, had said:

“Presumably it’s because people are spending their money on
the rent.

“It says to me that landlords in the private rented sector
have been doing very well out of Coventry in the last few years and that
concerns me.�

Acknowledging that rents are high in the private sector, Cllr
Kindy Sandhu added that she is also aware of university-owned housing in her own
ward of Earlsdon which is being sold to landlords.

Cllr John McNicholas had said:

“If that is being taken advantage of by landlords, that’s something
we need to look into.

“Clearly that wasn’t the purpose of supporting student-built
accommodation.

 â€œWe want first-time
families but if they are being crowded out of the market because of higher rent
requirements that’s not achieving our objective.�

It was recommended that these issues be brought to the
attention of housing cabinet member Cllr Tariq Khan.

The council is said to be taking steps to improve standards
in the private-rented sector with a “selective licensing� policy being drafted,
which will “introduce new charges for landlords�, with the hope of “weaning out
irresponsible landlords�.

Additional information indicates that licensing on houses in
multiple occupation came into effect in April, imposing new charges in a bid to
reduce the high number of HMOs in the city of Coventry.

At the same time, the council is said to be supporting
purpose-built student accommodation to encourage students to move out of smaller
student housing – supposedly to free them up for families to buy.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Coventry councillors claim buy-to-let landlords are pricing out buyers | LandlordZONE.

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