First-time buyer sales hit 7 month high

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NAEA Propertymark has now released its September Housing Report and the number of sales made to First-time buyers increased in September, to 30%. This is the highest figure seen since February.

Year on year, this is an increase of 36 percentage points from September 2018 when it stood at 22%.

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RLA research says rent controls will hurt tenants

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Rent Controls:

The controversial issue of rent controls, as proposed by Labour and the Mayor of London, divide opinion in both the tenant and the landlord communities. Most landlords are against, while for tenants its often a tempting prospect.

However, according to a round-up of research by the Residential Landlords Association (RLA), rent controls hurt tenants by drying up the supply of homes to rent and in the long run, in many cases by actually increasing rents.

The Mayor of London is calling for the power to introduce rent controls across the capital. This, according to evidence sourced by the RLA, would have a negative impact on tenants. The RLA’s analysis of existing research from around the world it says reveals the harm they can cause. And it gives specific examples:

·
Forms
of rent control exist in Los Angeles and San Francisco. A paper for
the California Budget and Policy Centre has reported that renters are
“substantially more likely to struggle with housing affordability
than homeowners.” It goes on to note that: “More than half of
renter households paid over 30% of income toward housing in 2017, and
more than a quarter were severely cost-burdened, paying more than
half of household income toward housing costs.” A further paper for
the National Bureau of Economic Research has found that in San
Francisco, landlords affected by rent control reduced rental housing
supply by 15 per cent.

·
Research for the
National Multi Housing Council in the United States warns that rent
control and rent stabilisation laws “lead to a reduction in the
available supply of rental housing in a community, particularly
through the conversion to ownership of controlled buildings.”

·
A document prepared for
the European Commission has warned that rent controls “appear to
have a significant destabilizing impact on the aggregate housing
market, increasing the volatility of house prices when confronted
with different shocks.” It goes on to note: “The drawbacks of
rent controls in terms of unintended consequences for housing market
stability and negative effects on labour mobility would advise
against their use for redistribution purpose”.

·
In 2015, a rent control
mechanism was introduced across Germany. The research cites evidence
showing that between 2015 and 2017 rents in central Berlin increased
by almost 10 per cent. Before the introduction of the control they
had been rising by just one to two per cent each year. Research by
the German Institute for Economic Research has concluded: “Contrary
to the expectations of the policy makers, the rental brake has, at
best, no impact in the short run. At worst, it even accelerates rent
increases both in municipalities subject to the rental brake and in
neighbouring areas.”

·
In Italy, a paper for
the Centre for the Analysis of Public Policies notes that the private
supply of rental homes fell dramatically after a law regulating rent
levels was introduced in 1978. A further paper has found that in
Italy between 1998 and 2008, market rents increased by 57 per cent
compared to a growth in household income of 31 per cent.

·
In Sweden, a report by
the International Monetary Fund this year concluded: “Tackling
Sweden’s dysfunctional housing market requires reforms of rent
controls, tax policies, and construction regulation. In addition to
fully liberalizing rents of newly constructed apartments, there is a
need to phase out existing controls, such as by applying market rents
when there is a change in tenant.”

A
senior academic has warned the Greater London Assembly that the
Mayor’s proposals for rent controls would have “really dramatic
unintended consequences,” the RLA says of Kath Scanlon’s
intervention.

Addressing
the Assembly’s Budget and Performance committee, Kath Scanlon,
assistant professorial research fellow at the London School of
Economics, argued that: “Landlords would simply decide they were no
longer going to rent their properties.”

Further,
The Centre for Cities warned earlier this year that: “Rather than
helping make London open to everyone, strict rent control would close
off London to new residents and divide the city’s renters into
winners and losers.”

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

“This
research shows clearly that rent controls are not a panacea for
tenants. Far from making renting cheaper, experience around the world
shows it can make it more expensive and more difficult for those
looking for a home to rent.

“Rather
than resorting to simplistic and populist ideas which have shown
themselves to fail, the Mayor should instead work with the vast
majority of private landlords doing a good job to see what is needed
to stimulate the delivery of more homes to rent. Increasing supply is
by far the most effective way of keeping rents down.”

The
RLA PEARL research
paper
can be accessed here:
https://www.rla.org.uk/rent-controls-report.

Kath Scanlon’s comments are available here can be found here

The comments from the Centre for Cities can be accessed here

The government mulls the return of rent controls

London Mayor Sadiq Khan favours rent controls in re-election bid

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – RLA research says rent controls will hurt tenants | LandlordZONE.

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Private landlord tax vs that of a private hotelier

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This case study illustrates just how unfair the UK tax legislation will become for private landlords as of April 2020.

Perhaps more importantly, it provides insight into what can be done to “level the playing field”.

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Breaking Section 21 News – The plot thickens!

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The plot has thickened with regard to what will happen to Section 21. Yesterday, Esther McVey made the following statement with regard to its proposed scrapping:

‘In April this year the government announced that it proposes to consult on the future of Section 21 of the Housing Act 1988.’

Private Rented Housing: 28 Oct 2019: Hansard Written Answers –

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Call of the Week: “Ghost tenants”

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This week our advice team were able to assist one of our members with an issue where their tenant had been subletting the property. This is unfortunately quite a common issue that landlords face, and can be quite a serious issue depending on that individual person’s situation. The landlord may have a licence, a mortgage […]

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Beware of Bats

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Beware of bats this Halloween as over the winter months bats hibernate to stay out of the cold weather and residential buildings, in particular, present an ideal warm roosting site for female bats to rear their young.

Scotland is home to nine species of bats and all have European protection.

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New Building Safety Regulator

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Dame Judith Hackitt has been named as the government adviser on the new Building Safety Regulator, which will have the power to apply criminal sanctions to those breaking the new rules.

A respected expert in building safety, Dame Judith Hackitt will provide independent advice to the government on how best to establish the powerful new Regulator.

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Access to electrical cupboard withheld?

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I have a few apartments. The electrical meters etc. are communal and outside in a cupboard. The management agent refuses to let me have keys. I have asked many times.

So, the inevitable happens. Out of hours, my pregnant tenant loses power.

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Tackling problem tenants – act quickly to secure the right outcome

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Evictions:

2019 has been a
testing year for landlords, with consultation on the abolition of
Section 21 legislation, the “rogue landlords” database and
extensive media attention on assured tenancy. The focus has very much
remained on tenant rights, while, conversely, landlord rights appear
to be taking a back seat. Add to the mix Labour’s unhelpful and
inflammatory proposals around the sale of rental properties to
tenants at sub-market rents and the result is an unpleasant
environment for landlords.

When it comes to
dealing with problem tenants, we regularly handle cases whereby
landlords have failed to act quickly enough. In recent months, this
has worsened – thanks to media demonisation of landlords, some are
wary of evicting tenants that cause damage, fail to pay rent or break
their tenancy agreement for fear of being criticised.

Instead, they
attempt to salvage the situation, at best kicking the can down the
road and at worst exacerbating tensions.

Rent arrears are
usually the first visible warning sign, yet we are finding that
landlords continue to delay before taking action. We recently helped
a landlord whose tenant racked up arrears of circa £29,000 – along
with very significant damage.

The faster action is
taken, the sooner you will regain control of your property.

Issuing a Section 8
notice is the most effective route to secure the eviction of a
problem tenant, although it’s important to be clear on the
situations that do and don’t warrant eviction. The most common
issues are rent arrears, damage and nuisance behaviour, however
circumstances do vary. On occasion, we see cases where several issues
coexist, creating a major headache for the landlord and making speedy
action even more vital to avoid repair costs racking up.

This month alone,
we’ve seen a variety of Section 8 cases, with tenants arrested for
anti-social behaviour, GBH and domestic violence, through to rent
arrears and more unusual cases, such as large sports equipment being
erected on public right of way outside the property.

There are many
scenarios that warrant the lawful eviction of a tenant, including
repeated failure to pay rent on time, neglect or damage of the
property, nuisance behaviour, use of the property for illegal or
immoral purposes, receipt of a criminal conviction, or unauthorised
pets living within the property.

Once landlords make
the decision to seek the legal eviction of a tenant, it’s vital to
avoid mistakes – some of which could have significant repercussions
and could derail the case. Communicating with a tenant is a good
example – while for some, particularly younger landlords, it will
seem natural to use social media to contact a tenant, Facebook,
Instagram and Twitter should always be off limits. A letter should be
the first port of call, followed by an email if that should fail. It
isn’t unheard of for a landlord to be accused of harassment where
care hasn’t been taken to limit communication to acceptable
channels.

A thorough record of
events, along with photographs, is important – it will prove
invaluable should court intervention be required. Paperwork and
records should also be stored carefully to avoid cases encountering
issues due to missing documents. In the past, we have helped
landlords and agents when cases have gone awry due to paperwork not
being in order – the last thing a landlord needs is to end up back at
square one.

Once a Section 8
notice has been issued, notice period for tenants can range from as
little as 24 hours, to as much as 2 months – the notice period will
depend largely on the reason for the eviction and those living at the
property.

It’s important to
seek legal advice to ensure that eviction of problem tenants is
achieved as swiftly as possible, which will help to prevent
additional damage to the property and limit stress as much as
possible.

Despite the media
depiction of landlords, the law does have the teeth to protect
landlords where tenancy agreements are broken – the key to achieving
the right outcome is acting quickly. Don’t delay and wait for the
problem to worsen.

By Sim Sekhon, MD of LegalforLandlords

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tackling problem tenants – act quickly to secure the right outcome | LandlordZONE.

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Rent controls dry up supply and hurt tenants

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Rent controls hurt tenants by drying up the supply of homes to rent and in some cases increasing rents according to new research published today. With the Mayor of London calling for the power to introduce rent controls across the capital

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