Serving Section 21 during fixed term – right or wrong?

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A friend has been in touch. She rents in London and signed a new 12 months fixed term AST wef from 1st September 2019. The paperwork was signed on the 16th July 2019.

Her Landlord has served her 2 months notice on the basis that they have a new buyer for the property who wants vacant possession.

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Give landlords a break, pleads leading property industry boss

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David Alexander says the March 11 budget should be used to encourage landlords to stay or enter the market, not leave it.

The Boris Johnson government’s first budget since the General Election is now less than seven weeks away and leading industry figure David Alexander has urged the Chancellor to give landlords a break as increasing numbers of them exit the market.
“With the final phase of George Osbornes’ policy of decreasing tax relief on borrowing coming into force on April 6^th many landlords find themselves at a crossroads on whether to continue in the sector or leave,” says Alexander.

His company DJ Alexander is the largest estate agency of its kid in and around Edinburgh and has also launched a lettings platform, Apropos.
“This is occurring at a time when the need for the Private Rented Sector has never been greater and this demand will continue for decades to come which should mean this is a market to be encouraged as an integral part of the housing sector.”

Alexander suggests landlords across the UK should encouraged to stay in the market, and new ones encouraged to enter with tax breaks and inducements.

“Governments always wishes to tax businesses to provide them with income but, at present, this appears to be detrimental to the long-term survival of the PRS,” he says.

“Given that almost two thirds (61%) of landlords earn less than £20,000 per annum this is not a group which deserves punitive taxation.”

“It should also be noted that the more punitive the financial regime for landlords the more likely higher costs need to be passed on to the tenant.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Give landlords a break, pleads leading property industry boss | LandlordZONE.

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Today in politics: English Housing Survey, Europe, broadband, Rented Homes and tenancy agreements

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Today’s update looks at latest PRS figures, commons activity and new bills to affect landlords and tenants. English Housing Survey A total of 19% of households in England are now living in the private rented sector, according to figures from the English Housing survey, out today. In 2018-19, the average rent was £200 per week […]

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3% rent increase reasonable?

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We currently let 3 properties, all of the tenants have been our tenants since we purchased them in early 2017. We haven’t increased the rent since, however we would like to do so this year.

All of the tenants are on a periodic tenancy agreement and the AST has provision for a rent increase –

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Do the Germans realise ‘guaranteed rent’ schemes in UK have a bad reputation?

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Munich firm looks to launch its guaranteed rent platform in UK, but will it get a chilly reception from landlords and regulators?

A
German proptech company looks set to bring its guaranteed rent scheme to the
UK.

Backed
by millions of euros in venture capital, Berlin-based start-up Home has moved
into Munich and Hamburg and aims to be in 10 German cities by the end of 2020.

It has
also announced an international expansion this year which, given that the UK is
the Euro Zone’s top private rental market, means Home is likely to be heading
here soon.

Guaranteed
Rent schemes, where landlords pay firms to take
the admin and hassle of finding and managing tenants off their hands, are controversial.

There
can be issues over who is responsible for repairs, while landlords might not
have a say over their tenants when schemes
sub-let the properties to local councils or the Home Office.

Home
reckons it has refined the model. Its glossy website pitch explains how landlords
sign up online in just 30 minutes and, after handing over the keys, leave Home
to find the ideal tenants. And if a tenant doesn’t pay,

Home covers the rent and insures the property in partnership with leading insurance companies. The tenant experience also gets a revamp; they use Home’s app and newly installed digital locks to view and move into apartments.

Thilo
Konzok and Moritz von Hase founded The German proptech in 2016, which now gets
1,100 landlord requests per month. It has just raised another 11 million euros
in venture capital funding.

“This latest
round of investment will help us to serve more landlords in more cities and
significantly improve the tenant experience, enabling us to build the first
housing brand that both tenants and landlords love,” says Konzok.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Do the Germans realise ‘guaranteed rent’ schemes in UK have a bad reputation? | LandlordZONE.

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Government give permission for large licensing scheme in Waltham Forest

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Plans to introduce a large selective licensing scheme in Waltham Forest have been approved by the government this week. The scheme, which will cover 18 out of 20 wards in the borough, will come into affect on 1st May 2020. It will run for a period of five years ending on Wednesday 30 April 2025. […]

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English Housing Survey 2018-19 released

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The Ministry of Housing, Communities and Local Government has today released the English Housing Survey 2018-19. Click here to download the headlines report. First run in 1967, it is a national survey of people’s housing circumstances and the condition and energy efficiency of housing in England.

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An IF-ISA can get you onto the housing ladder 7 years faster than a Cash ISA

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The latest
research by leading peer to peer lending platform Sourced
Capital, part of the Sourced.co
Group, has looked at how best to invest when it comes to saving for a house in
order to save years’ worth of painstaking saving.

Cash ISAs
have become a popular way for many to stash away the cash with the aim of
climbing the ladder, with the Help to Buy ISA in particular helping many save
that all important deposit.  

While buyers
can no longer take advantage of the scheme there are a whole host of Cash ISA
saving accounts that average a return of 2.12% a year with a maximum annual
investment of £20,000 allowed.  

This means
that investing £20,000 a year on the current average UK house price of
£235,298, and when taking into account the addition of compound interest,
maximising the benefits of a Cash ISA would see you pay off the cost of a
property in 10 years compared to the 11.8 years it would require to save
£20,000 a year with no benefit from interest.  

With the
lower cost of buying in Northern Ireland and Scotland, it would take 6 and 7
years respectively, instead of 7 and 7.7 years saving £20,000 a year straight
up, and in the North East a Cash ISA can also cut your saving time to 6 years
instead of 6.5. 

In London,
you’re looking at a longer saving stretch of 19 years although this is
marginally better than saving for 23.8 years without the help of an ISA.

However,
investing in an Innovative Finance ISA (IFISA) through a peer to peer platform
such as Sourced
Capital could help you pay off your property much faster, with annual
returns hitting 10% and higher.

With backing
from the UK government, showing their confidence in the sector, there is now
encouragement to invest in property through peer to peer lending. The IFISA is
a category of ISA which was launched in April 2016 for UK taxpayers.
Previously, there have been two main types of ISA: Cash ISAs and Stocks and
Shares ISAs. Similar to these ISAs, the IFISA allows you to invest money
without paying personal income tax. This enables you to invest your money into
the growing peer to peer market. 

Like cash
ISAs Each tax year, you get an allowance of up to £20,000 to put into IFISAs
which you can distribute across your different ISAs should you wish to. In
addition, you can transfer your previous year’s ISA investments into your
IFISA.

While this
investment option allows for a much quicker return across the board, nearly 3
years faster in the UK as a whole, the time saving is most notable in
London where an IFISA investment could accrue a big enough saving pot to buy in
the capital at a cost of £475,458 in just 12 year’s, as opposed to 19 year’s
via the average Cash ISA – a seven year difference! 

Stephen
Moss, founder and MD of Sourced
Capital, commented: 

“Record low
interest rates over such a prolonged period have been great for those looking
to secure a mortgage, however, those still trying to accumulate a savings pot
have suffered where the rate of interest is concerned.

As a result, the consumer has become savvy when it comes to saving and the market has been flooded with a whole host of options to make our money work harder. While some Cash ISAs are proving popular, the peer to peer sector has really led the way with some of the best rates of return and whether you are trying to save a mortgage deposit, or pay off your property completely, there are a number of platforms like Sourced who can help you reach your goal far quicker than some of the more mainstream options.   As always, the biggest hurdle is educating the consumer on the additional options open to them and although their capital may be at risk, investing via more professional platforms in the peer to peer sector can bring a much better return.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – An IF-ISA can get you onto the housing ladder 7 years faster than a Cash ISA | LandlordZONE.

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Custodial and alternative rental deposit schemes on the rise pushing transparency in the sector

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The latest research by rental deposit
replacement scheme Ome, has looked at how the growing preference for custodial
deposit protection schemes is creating a more professional, safer and
transparent rental sector, with the emergence of deposit alternatives also
helping to drive this change.

Data from Ome shows that the number of deposits
protected via insurance-based deposit protection schemes has fallen -8.3% on
the previous year, while the number of deposits protected via custodial schemes
is up 24.4% on the previous year. A trend that has been seen consistently since
Ome’s sister company, mydeposits, launched a custodial protection scheme
alongside their insurance-based option in 2015.  

Ome believes this trend is an overall positive
one for the lettings sector as not only are custodial schemes preferable for
many tenants, who may otherwise feel uneasy about a landlord holding onto their
money personally, but it also limits the amount of client money held by agents
to further reduce risk in the industry.  

With the upcoming launch of Ome and continued
success of mydeposits, parent company Hamilton Fraser will be the first
provider to offer the choice of three deposit options when tenants secure a
rental property. This will drive further progress for choice and transparency
as the sector continues to progress.  

What’s the difference?  

Insurance-backed Deposit Protection

With an insurance-backed deposit protection
scheme, the landlord or agent takes the security deposit from the tenant and
registers it with a government-approved scheme but the money remains in their
bank account. This allows them to control the money for the duration of the
tenancy but requires a small fee to be paid to the scheme provider.  

At the end of the tenancy, the landlord or
agent is free to negotiate any return with the tenant, agreeing on deductions
before returning the money without needing to involve the deposit protection
scheme. This is often the quicker of the two traditional deposit protection
schemes when ending a tenancy.

The scheme reimburses the tenant at the end of
the tenancy should the landlord or agent be unable or unwilling to return the
right proportion of the deposit to the tenant when it is legally due following
a dispute resolution process. The landlord is expected to send the scheme the
disputed amount whilst the scheme decides who gets what. It is the scheme that
is insured rather than the tenant to cover the scheme’s liability to pay the
tenant when the landlord or agent won’t. 

Custodial Deposit Protection

With a custodial scheme, the money is collected
by a landlord or agent and then lodged within a government-approved protection
scheme.

This scheme provider then takes custody of your
money and holds it for the duration of the tenancy, only releasing it once both
parties agree on a returned sum or a tenancy dispute has been resolved.  

Both landlord and tenant can initiate the
request to return funds but both must agree on the sum being returned. Today,
all of this can be done easily online via portal that all parties will have
access to.  

The benefit to a tenant is that an independent
third party has control of the money and again, the money remains safe if the
landlord or tenant goes out of business. The money will only be returned once a
tenancy has finished or if the landlord or agents wish to move it to another
protection scheme.  

Ome’s Deposit Replacement Membership

Ome’s Deposit Replacement Membership removes
the requirement of a cash deposit altogether, with a landlord or agent
registering the tenancy online and inviting the tenant to create their
membership.

Tenants pay a small monthly membership until
the end of the tenancy, at which point the tenant and landlord are free to
negotiate any end of tenancy settlements. Where an agreement cannot be met the
negotiation can be escalated to the same adjudication team as mydeposits use.

The core benefit to tenants is cash flow.
Unlike cash deposits, or even some of the more traditional deposit
alternatives, the tenant can manage their finances over a longer period of
time.

A landlord can feel comfortable that they
receive the same financial security as a cash deposit, however as no money
exchanges hands are not threatened with a fine of up to three times the deposit
should they forget or fail to protect a deposit properly. Even where a tenant
leaves the property early (or fails to maintain their membership fee) Ome will
ensure landlords are reimbursed for their losses as a result of a tenant’s
breach of contract.

Co-founder of Ome, Matthew Hooker,
commented:

“There isn’t a huge difference between an
insurance or custodial deposit protection scheme from a tenant perspective and
both will deliver a certain degree of protection. However, it’s clear that the
industry is slowly moving away from the insurance-backed protection scheme and
this is largely due to a focus on raising standards and increasing transparency
across the sector, with landlords opting for custodial schemes in order to
provide and maintain this level playing field throughout. 

Poor communication during the repayment of
deposits is currently the biggest cause of
tenancy disputes so it’s clear that the industry is
heading in the right direction by opting for custodial schemes that enforce the
need to itemise deductions before the money can be released. The next logical
step is to provide a trusted, cashless option that not only requires an
itemised list of end of tenancy settlements but also requires the evidence
upfront. 

That said, while custodial schemes continue to
become ‘the norm’ and the increase in the number of deposit replacements such
as Ome are also providing tenants and landlords with an additional route that
further removes many of the friction points of deposit disputes entirely, we
believe that the ultimate goal is tenant choice.  

Looking into the future, and in the context of
a Lifetime Deposit, it wouldn’t be unimaginable that tenants have the choice as
to where they put their money for protection during a tenancy. Whether this is
with a custodial scheme or a deposit replacement, all options should provide
the same fundamental protection and operate to the same minimum standards in
order to better the sector as a whole.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Custodial and alternative rental deposit schemes on the rise pushing transparency in the sector | LandlordZONE.

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Solutions for Widow’s Right to Remain in Family Home

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I have a very tragic scenario and would welcome any comments.

Background: My elderly mum has been married to her husband, Mr M, for 25 years. As both were on their second marriages and both have children from their first marriages

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