Tenant Fees ban sees Rent Increases

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Rent Increases:

With the introduction of the tenant fees ban through the Government’s
Tenant Fees Act 2019, which became effective from the 1^st of June,
it was almost inevitable that agents would pass on their loss of fee income to
their landlords, and that where they can, landlords will pass on these costs to
their tenants.

And as landlords can no longer charge tenants for inventory
checks on check-in or check-out, or add onto deposits an additional charge for
pets’ damage, then these two items will inevitably also lead to rent increases
in some cases.

So consequently, according to the RLA, the introduction of
the Tenant Fees Bill has already seen rent hikes across the country, and according
to the latest May PRS Report from ARLA Propertymark, the number of tenants
experiencing rent hikes increased to the highest figure on record in May, with
45 per cent of agents witnessing landlords increasing rents. And the RLA
says:

• Year-on-year, this figure is up 61 percentage
  points, from 27 per cent in May 2017, and 28 per cent in May 2018,
• In May, the number of tenants successfully
  negotiating rent reductions fell from 1.9 per cent in April to 1.6 per cent.
  This is the lowest figure seen since January 2016 when it stood at 1.5 per
  cent. 
• The number of properties available to rent
  dropped marginally to 201 per member branch in May, from 202 in April.
• In contrast, demand from prospective tenants
  increased in May, with the number of house hunters registered per branch rising
  to 69 on average, compared to 64 in April.
• Year-on-year, demand is up 15 per cent, from 60
  house hunters registered per branch in May 2018.

It also seems that less buy to let property investors are
leaving the private rental sector, with letting agents seeing a slight decrease
in the number of landlords selling their buy to let properties. The number of
landlords exiting the market fell from five per branch in April, to four in
May.

ARLA Propertymark Chief Executive, David Cox, has said:

“As predicted, last month’s findings have shown an increase
in rent prices in advance of the Tenant Fees Act coming into force. This rise
in the number of tenants experiencing rent hikes is the highest we’ve ever had
recorded, and rents will likely continue to rise as they must now cover the
agent’s legitimate costs for setting up a tenancy.�

“Competition for properties will be increasing as the supply
of properties available to rent falls, but the demand from prospective tenants
grows. This ultimately pushes up rent prices on well-managed properties and leaves
tenants feeling the pinch.�

It seems that rent hikes could be the norm for the
foreseeable future states the Residential Landlords’ Asociation (RLA).

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Call for fast track housing tribunal post Section 21

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Almost four out of ten landlords (39%) would like the Government to introduce a fast track housing tribunal if the Section 21 ‘no-fault’ eviction process is abolished as planned according to Paragon’s PRS Trends Report for Q2 2019 which surveys the views and experience of over 200 landlords.

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Universal Credit Landlord engagement

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The roll out of Universal Credit has had an impact on rental arrears for claimants. Rent owed by Universal Credit claimants in the UK is, on average, £663 compared to just £263 for those on housing benefit (source: a FOI request made by Panorama).

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Evicting vulnerable tenant in hospital – Landlord Action response

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My letting agent took on a lady in May last year who I knew was vulnerable. She was on the higher rate of both care and mobility Disability Living Allowance so her total income was £470 per week including her housing benefit.

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“Housing is our top domestic priority – the challenge of a generation”

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Speech by Communities Secretary James Brokenshire at the Local Government Association Annual Conference. Click here to read the full speech:

Housing

“Housing is another vital area where local authorities need to strengthen their ability to deliver.

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NLA Wins Government Support over Hull City Council’s “Unfair� Treatment of Landlords

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Private Landlords:

Following a representation from after hearing from The
National Landlords Association, the government has delivered a sharp rebuke to
Labour-controlled Hull city council that it was found to be “unfairly
penalising� private landlords.

Hull City Council has taken an aggressive stance against private
landlords whose tenants report them for an alleged failing in their property.
The Council has been serving them with enforcement notices before they have had
the opportunity to address a tenant’s complaint.

But after hearing about the protests from private landlords
at a meeting with the National Landlords Association (NLA) and Humber Landlords
Association, the Housing Minister Heather Wheeler MP called on Matt Jukes,
chief executive of Hull City Council, to “work with these landlords�.

Hull City Council has introduced the Hull Accredited
Landlords Scheme, whose members are given an exemption from an immediate
council inspection following a report from a tenant. But the NLA told the
minister that there is confusion over the entry criteria for the scheme, which
is free to join and only requires the landlord to attend a one-day training
course on housing health and safety.

In a letter to Mr Jukes, Mrs Wheeler said: “I was extremely
concerned to hear reports that many private landlords in Hull are not fully
aware of, or have misunderstood, the standards they must meet to become a
member of the scheme. It is crucial that you work to bring landlords with you
and are communicating effectively to do so.�

Gavin Dick, Local Authority Policy Officer at the NLA, said:

“Hull City Council has been unfairly penalising landlords.
While it should penalise landlords who don’t provide safe, habitable homes, it
isn’t right that good landlords should be punished before having the chance to
fix any problems they weren’t previously aware of. The vast majority of
landlords want to rectify issues as soon as they arise. Councils must not
tarnish all landlords with the same brush.

“It’s unfortunate that we had to take this matter to the
minister, but we are encouraged that our collective voices have been heard and
Hull City Council now needs to take immediate steps to ensure all landlords in
Hull understand the Hull Accredited Landlords Scheme.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – NLA Wins Government Support over Hull City Council’s “Unfairâ€� Treatment of Landlords | LandlordZONE.

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Pests in hot weather?

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I let a ground/lower ground floor flat out in a converted property of twelve flats. It is let out on a standard AST where there is a clause for the tenant to pay for the removal of “vermin, pests and insects

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Why the Government’s scapegoating of landlords for the rental crisis must end…

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Regulations & Landlords:

Earlier this month the Tenant Fee Ban was introduced, after much fanfare from the Government. However, it is not the only piece of regulation and policy change set to affect the landlord market this year.

It joins what can only be described as a slew of restrictive Government policies – including tax changes, tougher HMO requirements and the recent announcement / threat to ban ‘no fault’ evictions – which many would agree amount to an unfair and sustained attack on the landlord market.

It is clear the Government
seems to have forgotten landlords are often just ordinary, hardworking people
and savvy investors, who have saved to buy an additional property as a nest egg
or source of income. A report from the Institute of Economic Affairs (IEA)
recently criticised the Government’s approach, concluding landlords are
unfairly being discriminated against and scapegoated for the rental housing
crisis.

By squeezing profit margins and pushing landlords to exit the market, there is a very real danger that the recent Government policies will start to undermine the UK rental sector altogether.

The fact of the matter is, the rental market is growing, and landlords fulfil an incredibly important role in providing essential property stock. Instead of increasing red tape and making it harder for landlords to turn a profit, the Government should be supporting and encouraging the sector.

Appropriate planning is now
incredibly important to ensure you avoid any financial, practical or legal
ramifications of new and upcoming legislation. So, as a landlord, what should
you be doing to navigate this new regulatory landscape and make sure your
assets are protected?

As most will know, the Tenant Fee Ban means the only payments that can now be levied at tenants by landlords or agents are rent, dilapidation deposits and default fees, with the deposit limit reduced from 6 weeks to 5. However, the biggest danger for landlords is the removal of an agent’s ability to charge for tasks like reference checks.

Nightmare tenants can wipe out profit through property damage or failure to pay rent. It is therefore vital to commit to paying for reference checks and a rent guarantee to ensure all parties are fully protected. Alternatively, make sure you are using a reputable agent who will continue to carry out these tasks properly, potentially by using deposit replacement schemes that include these as standard.

Another significant change has been to HMO licenses, traditionally required in any property where five or more people live over three floors but are not part of the same family. Non-compliance can result in unlimited fines, a criminal record and a ban from acting as a landlord in the future.

What many don’t realise is that HMO rules can be different for each borough, and numerous councils are getting much stricter about enforcement (encouraged by the fact they now profit from any fines!). For example, in Camden, London, HMOs are now required for any property with three unrelated persons, and also within properties on a single floor.

Tenants are also being invited to report non-compliance, encouraged by the fact that landlords can be forced to repay all rent to tenants for the length of their contract. In just one of the London boroughs, there have been 1,200 prosecutions of landlords and agents for HMO breaches in the last 5 years, so ensuring you are HMO compliant by checking your borough’s specific rules is an absolute must.

On 20^th March this year the Homes Act 2018, or ‘Fitness for Human Habitation Act’ also came into effect. While not entirely new, rather a clarification and bringing into line of previous legislations, it is harsher in a number of ways. There are now 29 hazards that landlords are responsible for monitoring – including damp, mould, cold, asbestos, heat, and radiation to name a few.

Tenants can take landlords to court and sue if it is found they have failed to maintain standards in one of these areas. The problem here is that it can be incredibly difficult, as an independent landlord, to both have the necessary knowledge on these matters and make sure you are compliant. This is where a knowledgeable and reliable agent or advisor is key.

Finally, the Government have also announced that they intend to end ‘no fault evictions’, by removing the Section 21 notice. Although their proposals presently lack any real detail, this will make it even harder for landlords to get rid of disruptive tenants.

Their current suggestion that Section 8 notices should be used instead, by which grounds such as failure to pay rent must be provided for eviction, are little comfort thanks to a backlogged court system that with three-to four-month delay in hearings can make this an incredibly lengthy and costly option. Given the lack of detail, there might still be opportunity to adjust this law, and so lobbying MP’s and Parliament members on this could provide some relief.

Rental yields are improving and buy-to-let can still prove to be a good investment for many, so you should not necessarily be put off. However, it is vital to remember the onus is now on you to put the necessary precautions in place to protect both your property and rental income.

Information and education are key – to this end I will also be hosting a number of round table events aimed at helping local landlords understand and navigate recent policy changes. This first of these events is scheduled for Tuesday 18 June, at Stephen’s House, Finchley. Attendees will be able to ask questions, gain insight and discuss their experiences with experts from Martyn Gerrard, ARLA and local councils.

By Simon Gerrard, MD, Martyn Gerrard

For more information and to register your interest click here or email HO@martyngerrard.co.uk

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Why the Government’s scapegoating of landlords for the rental crisis must end… | LandlordZONE.

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The Alliance Housing Policy

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Following on from the onslaught against the PRS emanating from Government, Councils and other anti-landlord bodies, the Alliance has now published its housing policy.

We have stated our case at the Fair Possession Coalition summit regarding the abolition of section 21.

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A case of communication, cooperation and compliance

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I wanted to share this story, because it demonstrates the importance of direct payments from tenants in receipt of Universal Credit to Private Rented Sector (PRS) landlords.  Not only does it give landlords peace of mind, it also safeguards tenancies

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