Greenwich’s selective licensing plans are latest to be scuppered by Coronavirus

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Borough appears to following landlords’ advice that all visits other than essential maintenance would put tenants and staff at risk.

Greenwich is the latest London borough to
pause its selective licensing consultation in response to the Coronavirus
crisis.

The council kicked off the
process in February which was due to end on 26th April but has decided to call
a halt due to ‘safety issues’.

It already operates a
borough-wide HMO licensing scheme but wants a new scheme to cover parts of Plumstead, Glyndon,
Shooters Hill, Woolwich Common and Woolwich Riverside.

Greenwich council believes selective
licensing will help it improve town centres by reducing crime and anti-social
behaviour, while improving living conditions for tenants.

The Residential Landlords
Association (RLA) has written to all local authorities currently consulting on
licensing schemes, such as Greenwich, asking them to extend consultation
periods. It says current legal restrictions mean landlords won’t be able to
attend council-run forums.

Along with the National
Landlords Association, it’s also calling for a suspension of routine
inspections of properties by landlords and a temporary halt on enforcement
action by local authorities where landlords can’t fulfil certain non-essential
obligations because of the health risks.

In a letter
sent to all authorities, the RLA says: “At this time, it is only
sensible to restrict visits to property to only those required to address
issues of tenant safety and the habitability of the property, such as heating
failure and water supply and sanitation problems.”

Nearby
borough Camden has suspended inspections while Luton’s scheme, which was scheduled for 1^st May, has now been
deferred.

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Renting in 2030 – Deposits

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Introducing a new series: Renting in 2030

I think
it’s safe to say that we are in the middle of a transformative episode for the
entire planet. In the same way that the fall of the Berlin Wall in 1989; or the
catastrophic events of September 11^th, 2001; or even the last
financial crises in 2007/8 were turning points in the way the human race
interacted as a species I think the spread of Covid-19 will been seen by
academics of the future as a period that changed the world.

Bringing things back closer to home, Covid-19 may also prove to be a significant milestone in the continued development of our residential private rental sector. I want to introduce you to my pilot blog in a new semi-regular series that will explore particular areas of our industry and speculate on some significant changes we could see. My role as Head of Redress at the Property Redress Scheme requires me to keep on top of the levels of service expected from our letting agents and therefore I regularly see a lot of the innovation throughout the lettings world. As ever, I will err on the side of optimism and look at where we can potentially improve as a market. I also want to avoid the topics currently in debate such as evictions and rent guarantee insurance as, if you’re like me, you’ve already seen a fair amount of coverage!

Can the deposit as we know it survive?

To begin I
want to dive into the world of deposits. Particularly following the ban of
tenant fees last year, the tenancy deposit is the largest lump sum a tenant
needs to gather in order to secure a new home. I must declare an interest in
this area of the market as the Property Redress Scheme is part of the Hamilton Fraser
Group who operate mydeposits, one of the three
government authorised protection schemes. Hamilton Fraser are also soon to be
launching a deposit replacement product through their latest brand Ome. However,
seeing this part of the lettings process up close gives me a unique position to
posit on the future of deposits.

Something
that I’ve really been impressed with during this spate of chaos is the
compassion many landlords are showing. Everywhere you look there are stories of
landlords offering rent reductions where they can or, in many other cases,
offering complete rent holidays. This is a direct response to the fears tenants
have over losing their homes by no fault of their own. Landlords have shown
that they are human too and not the greedy, opportunistic monsters that is
often portrayed by certain sections of the media. They have offered flexibility
to tenants that don’t have the room to budge. However landlords are, after all,
commercial entities and have their own bills to pay and mouths to feed. But I
don’t expect to see the end of this flexibility and instead we will see further
innovation in the deposit sector.

Now when you consider the average amount of savings per person in the UK is just £813 (and dropping) and 53 per cent of 22-29 year olds have no savings at all, it is clear that cash flow and emergency planning has passed many of us by – by choice or impossibility. Whether you are a home owner or a renter this poses a problem. As a society I believe we’ll start to be more prudent, saving more of what we have and keeping a small portion for a rainy day. This frugal nature is one we attribute with the generation that lived through trying times during World War Two and one I wouldn’t be surprised to see again. Our internal research at Hamilton Fraser, by deposit replacement provider Ome, shows the average deposit in England since the introduction of the tenant fee ban is £985 – quite a significant figure for the vast majority of people. This is also money that belongs to the nation’s renters but is not available to call upon in times of need. Deposits have been under increased scrutiny over the past year or so, with alternative products pushing traditional providers to innovate as well as the current government looking to introduce a new Lifetime Deposit – whatever that ends up looking like!

What could we expect to see?

I think the
important thing to remember is a deposit is a financial replacement for trust. A
landlord wants to know that they have a degree of financial redress available
should a tenant fail to abide by the terms of their tenancy. However, in
today’s increasingly cashless society the need to transfer the supervision of money
to the landlord, or agent, can pose more troublesome and risky.

Paired with
the continued push towards a tenant-focused lettings market I can see the
transfer of cash deposits to landlords and agents eradicated. I suspect, before
long, tenants will be given the responsibility to protect their own deposit and
provided with evidence to show their landlord they are ready to rent their
property. This will be a “custodial” only environment, where a cash deposit is
placed within an authorised deposit protection scheme directly by the tenant
and the money never touches the landlord. At the end of the tenancy, the
landlord will be given the opportunity to request a settlement figure which, if
required, would be adjudicated on by the scheme in the same way as we expect
now.

I think deposit replacements will also play a part in this new lettings world, where they substitute in for the current “insurance-backed” schemes. If the industry pans out how I predict, there will be no need for schemes that allow landlords to hold the deposit themselves, albeit with protection for the tenant to reclaim it if need be. Instead, tenants that wish for an option that grants them flexibility and access to improved personal cash flow. I expect these products to eventually become properly authorised government approved schemes and will be made to meet the same standards as their more traditional deposit protection scheme counterparts, such as offering free dispute resolution. I do think work needs to be done on making the products themselves more affordable as they are still quite expensive. I know that Ome, Hamilton Fraser’s entrant, is looking to provide the product in small, monthly membership fees but I hope to see competition and innovation drive the costs to the tenant down further. I also expect to see tenants given the opportunity to transfer between the new custodial scheme and deposit replacement scheme as and when they require, giving them flexibility over their money that they do not currently enjoy. When it comes to moving out, the schemes will be able to manage the transfer of financial protection to a new landlord without requiring the tenant to save for (or borrow!) and pay a second deposit. Landlords will have the exact same experience when requesting funds from the tenant regardless of the tenant’s choice of scheme.

To conclude…

As our
society continues to enshrine the security of the nation’s renters I see a
world where tenants are expected to look after their money in a way that best
suits their needs. This will not detract from the financial security a landlord
needs to feel comfortable letting someone else into their property as the
schemes will offer redress where required. Tenants will feel trusted and more
empowered to manage their finances and rental wellbeing. It will take time for
our industry to adapt to these changes but, as time goes by, I imagine
landlords questioning why they were ever asked to protect money on a tenant’s
behalf as it’s an added and unnecessary extra step to the rental process.

I’d really appreciate your comments and feedback
below. Challenge my thinking if you disagree! Do let me know whether or not
you’d enjoy reading more of my future gazing. All opinions are welcome and I’d
love to know what else you’d like me to cast my eye to. I’m quite keen to
explore the future of rent payments and how that could intertwine with
something quite close to my heart – landlord redress.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Renting in 2030 – Deposits | LandlordZONE.

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Only “serious and urgent repairs” should be attempted, says new government guidance

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Repairs and Maintenance:

Residential
landlords (private and social landlords) are being advised by
Government that they should only access tenants’ properties to
inspect or repair “serious and urgent issues”. They are advised
to take a “pragmatic, common-sense” approach to non-urgent
repairs.

The advice is included in a guide issued over the week-end – Coronavirus (COVID-19) Guidance for Landlords and Tenants – which sets out landlords’ new responsibilities and landlord and tenants’ rights effective during the coronavirus outbreak.

The guide states
that a landlords’ legal obligations “have not changed” as a
result of the outbreak; tenants still have “a right to a decent,
warm and safe place to live”, but that does not mean that landlords
or their tradespeople should put themselves or tenants at risk.

The guidance calls
for a “pragmatic, common-sense approach” to all non-urgent issues
and acknowledges that the outbreak may prevent routine inspections
and some repairs.

The guide covers
other issues including new rules on seeking possession, guidance on
dealing with rent arrears and general property access and health and
safety issues, including access for gas safety checks. It should be
noted that increased notice periods were introduced by law last week,
as well as the 90-day moratorium on possession hearings introduced
for courts in England and Wales.

The guide also
contains advice for local authorities and enforcement; they should
take a “pragmatic approach to enforcement” of standards
during the outbreak, taking into account if landlords have taken all
reasonable steps to carry out safety checks, including gas – they
were not be in breach of the law.

It is proposed that
access with the usual precautions is only sought for “serious and
urgent issues”.

Examples may
include:

• problems with
  the fabric of your building, for example the roof is leaking
• a broken
  boiler, leaving tenants without heating or hot water
• water supplies
  leaving tenants without washing or toilet facilities
• gas safety
  issues

• failed
  appliances such as fridge, freeze or washing machine
• critical
  security failures such as a broken windows or external doors
• failure of
  equipment for a disabled person

According to a
report by Inside Housing it is not as yet clear whether the
guidance leaves room for access to the property or delays to carry
out routine inspections required by law – such as gas safety
checks.

“Tenants should
let their landlords know early if there is a problem and landlords
should take the appropriate action. We understand current
restrictions may prevent routine and obligatory inspections,” it
says.

“While resources
are stretched, we are recommending a pragmatic approach to
enforcement from local authorities. This should mean that tenants who
are living with serious hazards that a landlord has failed to remedy
can still be assured of local authority support. Landlords should
also know they should not be unfairly penalised where COVID-19
restrictions prevent them from meeting some routine obligations.”

The guidance
“strongly advises” tenants to “take additional measures such as
remaining in separate rooms during any visits”.

Previous guidance
issued last week said that no work should be carried out by a
tradesperson with coronavirus symptoms and only work to remedy a
direct safety issue should be carried out where people are isolating
or being shielded from the virus due to a vulnerability.

Separate guidance
was issued to local authorities regarding enforcing standards in the
rented sector during the outbreak.

With regard to gas
and electrical checks, the guidance says: “Both regulations are
clear on the issue of compliance. If a landlord can show they have
taken all reasonable steps to comply with their duty under the
regulations, they are not in breach of the duty.

“A landlord
could show reasonable steps by keeping copies of all communications
they have had with their tenants and with electricians as they tried
to arrange the work, including any replies they have had.

“Landlords may
also want to provide other evidence they have that the installation,
appliance or flue is in a good condition while they attempt to
arrange works. This could include the servicing record and previous
landlord gas safety check record.”

On rent arrears,
tenants are advised to continue paying rent and should “speak to
their landlord at the earliest opportunity” if they are unable to
do so.

The guidance urges
landlords to “offer support and understanding to tenants who may
start to see their income fluctuate,” for example, “This can
include reaching a temporary agreement not to seek possession action
for a period of time and instead accept a lower level of rent, or
agree a plan to pay off arrears at a later date.”

Coronavirus (COVID-19) Guidance for Landlords and Tenants

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LATEST: Scotland suspends minimum EPC rating rules – will England follow suit?

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Scottish government says its councils need to concentrate on Coronavirus and that work to upgrade properties would compromise tradespeople, tenant and landlord safety.

Scotland is suspending the introduction of EPC rules for
private rented properties to keep landlords safe and free up local councils to
deal with the Coronavirus crisis.

The Energy Efficiency (Domestic Private Rented Property) (Scotland) Regulations 2020 were due to come into force on 1st April, requiring a minimum EPC rating of E at the start of a tenancy from 1st October. However, they’ve now been postponed indefinitely due to the crisis. These regulations aim to halt the letting of properties that don’t meet the standards.

Similar regulation is due to go live in England and England tomorrow too, but the Westminster and Cardiff governments are yet to announce a suspension or delay to their measures.

Unusual times

In a letter to the convenor of
the Scottish Parliament’s local government and communities
committee, Kevin Stewart MSP, Minister for Local Government, Housing and
Planning, acknowledged it was an unusual step, but said, “these are very
unusual and fast-moving times”.

Stewart said the new duties and responsibilities placed on
local authorities between now and October meant they would have to develop a
system for registering exemptions and be ready to support landlords and enforce
compliance.

“If introduced at this time, these duties would place a
burden on them which would be detrimental to their necessary focus on frontline
emergency responses to the COVID-19 crisis, and their delivery of vital
services and support to vulnerable people,” he said.

The regulations might require many private housing
landlords to undertake energy efficiency works in preparation for the change,
which risked encouraging them to try and get work done in tenants’ homes, despite
social distancing measures.

Stewart added: “For these reasons, I firmly believe it would be unwise to bring the regulations into force from 1st April as planned. I can assure you that I will push forward with the vital work of improving energy efficiency in private rented housing as soon as the current COVID-19 situation comes to an end.”

Read more about EPCs.

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Covid-19 Temporary changes to Right to Rent

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Right to rent checks have been adapted to make it easier for landlords to carry them out during the coronavirus outbreak, the Home Secretary announced Monday 30th March.

Effective immediately, the temporary changes will mean the Home Office will not require landlords  to see original documents and will allow checks to be undertaken over video calls.

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Not all Doom and Gloom

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The Good News

Brooklands Commercial Finance is fully operational and assisting Property 118 clients in these unprecedented times.

We are currently working with lenders that have replaced their requirement for physical valuations with remote valuations plus they are passing on the full 0.65% base rate drop on their variable rates.

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Coronavirus: changes to Right to Rent checks

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The Government has published new guidance for landlords on conducting Right to Rent checks during the coronavirus pandemic. The guidance, makes a number of significant, temporary changes to the right to rent regime the come into effect immediately. In England, landlords are normally required to carry out Right to Rent checks of prospective tenants. This […]

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BREAKING: Government relaxes Right to Rent rules

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Home Secretary Priti Patel says landlords can now conduct right to rent interviews via video and that documentation can be submitted as scanned documents.

Landlords no longer have to physically inspect Right to Rent documentation or conduct checks face-to-face, it has been announced by the Home Office.

For the duration of the Coronavirus crisis, landlords checking in tenants to a property will be able to accept scanned or videoed documents instead of having to eyeball passports and other qualifying Right to Rent documentation.

Ministers say the Right to Rent scheme continues in every other way and that, if tenants cannot provide scanned documents to prove their Right to Rent in the UK, landlords should use the Landlord Checking Service as per usual.

The Home Office also says landlords must understand that it remains an offence to knowingly lease premises to a person who is not lawfully in the UK.

The government has also relaxed corresponding rules for employers checking a person’s Right to Work in the UK.

“I have introduced these temporary changes to help employers and landlords conduct checks more easily as people follow advice to stay at home to protect the NHS and save lives during the coronavirus outbreak,” says Home Secretary Priti Patel.

Landlords are not being entirely relieved of their document checking duties and will have to visit tenants after the pandemic is over to recheck their documentation face-to-face.

The Home Office has issued the following guidance:

• Ask the tenant to submit a scanned copy or a photo of their original documents via email or using a mobile app.

• Arrange a video call with the tenant – ask them to hold up the original documents to the camera and check them against the digital copy of the documents.

• Record the date you made the check and mark it as “an adjusted check has been undertaken on [insert date] due to COVID-19”.

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Larger Portfolio Landlords Face Financial Oblivion Unless They ACT NOW!

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Janet and John have spent their time in isolation considering the impact of Covid-19 on their rental property business.

They are predicting that in the 2020/21 tax year their rental income will reduce by approximately one third. This has already started happening with the inability to rent properties recently vacated and which they had been refurbishing.

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Labour backs three-month rent holidays and six-month rent rise freeze

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Report just out from outgoing shadow Chancellor John McDonnell goes much further than the government’s measures and says UK should copy New Zealand.

Landlords should be willing to
accept a drop in their income to prevent renters from losing their homes during
the Coronavirus crisis, says Labour.

The party believes new Government
measures to prevent landlords from starting eviction proceedings during the
next three months don’t go far enough and is calling on ministers to look at a
New Zealand-style plan to freeze residential rent hikes for the next six
months.

A new report from the party’s
outgoing Shadow Chancellor, John McDonnell, says the Government’s plea for
landlords and tenants, “to come to arrangements where necessary” is
insufficient.

It adds: “Where necessary, rent
payments should be suspended for a three-month period to enable people to feed
themselves and their loved ones, and to avoid driving people into destitution;
at a time of widespread job losses and wage cuts of at least 20%, it is not
unreasonable for landlords – many benefiting from a mortgage holiday – to
prepare for small declines in their regular income.”

Launching the new report, which
Labour calls ‘a constructive set of proposals’, McDonnell says: “As we move
into the next stage of this crisis, which we are all working so hard to tackle,
we have to build into our social protection system the resilience we need to
deal with the growing strain on our economy and public services in the coming
days.”

The
report, Protecting People in and Out of Work, also calls for increased benefit
levels and a moratorium on utility bill disconnections.

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