The Government has pledged its commitment to lifetime rental deposits in a new document that vows to improve the housing market.

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Plans to introduce a new lifetime
tenancy deposit are outlined in Planning
for the Future with a pledge to support good landlords who can, “continue
to provide the homes the country needs”. It adds: “Ensuring renters are treated
fairly through the Renters’ Reform Bill – we will improve security for tenants
by abolishing the use of ‘no fault evictions’ so that tenants can put down
roots in their communities and plan for their long-term future.”

The Ministry of Housing,
Communities & Local Government document says it wants to deliver a rental
system that is fit for the modern day – one that protects tenants and supports
landlords. This will start with a planning white paper in the spring to
modernise the planning system.

Although there are no details yet on how it would work, ARLA Propertymark says a lifetime deposit is likely to be welcomed by both tenants and landlords, while The Residential Landlords Association has long called for such a change, arguing: “It would be easier for all involved if a tenant’s deposit could follow them from property to property, with the tenant making up any shortfall caused by deductions.” ARLA believes that under the proposed system, a tenant’s deposit would follow them around from property to property, with the tenant liable to make up any shortcomings as a result of deductions.

One potential downside is how quickly any possible shortfall could be made up without affecting either the outgoing or incoming landlord – something the Tenancy Deposit Protection Reform Working Group was set up to explore.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The Government has pledged its commitment to lifetime rental deposits in a new document that vows to improve the housing market. | LandlordZONE.

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Fraudulent London landlord jailed for forgery

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A rogue landlord jailed for forging documents to prevent enforcement action being taken over his three illegally converted HMOs has been ordered to pay £55,000.

Siddarth
Mahajan of Milton Crescent, Ilford was convicted under the Proceeds of Crime
Act at Snaresbrook Crown Court during a confiscation hearing where Barking and
Dagenham Council recovered £30,000. The judge also ordered him to pay £25,000
in costs.

Mahajan was
sentenced in February 2019 for converting a three-bedroom family
home in Sherwood Gardens, Barking, into an HMO without planning permission. He’d
bought the property in 2015 but falsely claimed it had been in use as an HMO for more
than 10 years and was therefore immune from enforcement action. He produced a
number of documents to support this claim including several tenancy agreements,
a letter from an estate agent and a sworn affidavit which appeared to show that
it had been an HMO since 2008.   

The Special Investigations Team examined other
properties owned by Mahajan in St Erkenwald Road and Ripple Road, Barking. He
had also converted these family homes into HMOs without securing planning
permission, and provided similar forged documents. Mahajan was found guilty of
two counts of perverting the course of justice and three counts of using copies
of forged documents, and sentenced to eight months for each offence, to run
concurrently.

Councillor
Margaret Mullane, cabinet member for enforcement and community safety, says: “I
hope this serves as a stark warning to disreputable landlords that we will
continue to come after them for their money even if they have been previously
prosecuted.  

“The council will not stand by and let our residents
live in cramped properties that are harmful to their wellbeing.”

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Right to Rent checks raise Coronavirus fears among lettings agents

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Worried letting agents are calling on the Government to issue advice about how to conduct Right to Rent checks without putting themselves and their tenants at risk.

ARLA Propertymark has written to the
Secretary of State for Health, Matt Hancock, asking for guidance, stressing just
how much social interaction is needed for letting agents to do their jobs. Chief Executive David Cox writes that
by law, letting agents must carry out face-to-face Right to Rent checks in the
presence of all adult occupiers, but many agents are concerned about their
ability to do their work in light of the Coronavirus.

“The virus poses more of a problem when tenants are
self-isolating and there are issues at the property that need to be resolved or
at the start and end of the tenancy process with interaction between multiple
parties,” says Cox.  

He adds: “Given the importance of housing and the ability
for people to buy and sell property as well as rent, we implore the Government
to provide urgent advice to the sector to ensure that their businesses can
continue to operate.”

The Residential Landlords Association’s policy manager
John Stewart suggests that if landlords have a property inspection scheduled, they
should consider whether it can be delayed until later in the year. If it
can’t, or they’re checking a tenant in or out, he says they should follow official
advice. “While you don’t want to be unnecessarily intrusive, it may be
worth asking tenants if they have travelled from higher risk areas or are
showing symptoms.”

“If your properties are managed,” adds Stewart, “then
ask what steps your agent is taking to inform tenants, and if they have
contingency plans in place should a tenant have to self-isolate.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Right to Rent checks raise Coronavirus fears among lettings agents | LandlordZONE.

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Breaking: Council bids to host England’s first Housing Court

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Portsmouth council and its local landlords’ association believe everyone involved in the private rental market would benefit from the proposal.

Portsmouth council has become the first in the
UK to apply to run its own local Housing Court, ahead of a government decision
to set up a national system.

Ministers finished consulting on a separate Housing
Court system in January and an announcement is expected soon. Both lettings
agency and landlord
industry associations as well as housing
charities have been lobbying hard for it to be introduced.

Disputes in England are currently heard either
in a County Court or a First Tier Tribunal but
the government has said it is aware that many tenants, and landlords, find
these processes daunting and expensive.

Portsmouth is therefore proposing to ask
Ministers for permission and funding to set up its own local Housing Court
which, if successful, would make it the first to do so.

Local landlords are behind the plan. Alwin
Oliver, vice chairman of the Portsmouth and
District Private Landlords Association (PDPLA) told a meeting of the council that: “’We would ask firstly for a
mediation service to try to settle things. But it could lead to a specialist
division of the county court dealing just with housing.

“We think if there’s a good system
that a landlord or tenant can go and say ‘I have got a problem’ and a mediator
can help that would be better. It can take months for things to happen in
county courts.”

Oliver also said his organisation
would help the council lobby for funds from the ministry.

The meeting also revealed that the
council has other plans up its sleeve including proposals to loan tenants cash
to pay for deposits, lend landlords funds to do up properties, launch a website
listing accredited landlords and widening its HMO licensing scheme.

But
the meeting also heard arguments from one councillor against introducing a
selective licensing scheme within the city, local media
reported.

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BTL max age now 99 for Gatehouse bank

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Gatehouse Bank has relaxed its age criteria for Buy to Let mortgages increasing the maximum age at the end of the term, from 85 to 99 years. The 99 year age only applies to borrowers relying solely on rental income to stress test for affordability.

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Exclusive: landlords warned over new WhatsApp business usage rules

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Landlords who use WhatsApp to communicate with tenants are exposing themselves to legal action from the global communications giant, which is owned by Facebook and in the UK is the most popular way to text friends and family.

The free-to-use service has quietly ushered in new terms that mean businesses including landlords and letting agents cannot use its service to communicate with customers and must instead use a separate business version.

After talking to several landlords who wished to remain anonymous, it is clear that the use of WhatsApp is widespread within the private rented sector as a means to both on-board tenants and manage property and tenancies.

Landlords are also not being compliant with GDPR data protection and privacy laws when using the free personal version of WhatsApp for business purposes, according to consultancy Stitch.ai.

Late last year WhatsApp updated its terms to say that: “In addition, beginning on December 7, 2019, WhatsApp will take legal action against those […] that violate our Terms of Service, such as […] non-personal use, even if that determination is based on information solely available to us off our platform.”

WhatsApp expert Paul Gandar from consultancy Stitch says: “Having client messages on Personal WhatsApp Accounts – using a work phone doesn’t cut it – is something that you need to avoid if you want to maintain a client relationship over WhatsApp.”

Under the radar

He says smaller landlords with a few properties and only intermittent communications with tenants are, although technically breaking the new rules, likely to remain under the radar.

But other landlords with larger portfolios who run their own businesses whether through a limited company or not, are exposed.

There are two solutions. Either to sign-up to use the separate WhatsApp Business app or use a paid-for third-party managed service that directly plugs into WhatsApp.

“For the free version, we would point out to any business that they need to ensure they adhere to the correct naming policy, as well as WhatsApp Business Policy,” says Gandar.

“If
you need to manage your messages within a team, then a supplier such as Stitch will manage the Display
Name Policy, and Business Engagement policy on your behalf.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Exclusive: landlords warned over new WhatsApp business usage rules | LandlordZONE.

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Exclusive: leading letting agency calls for Right to Rent reform

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London firm Chestertons tells LandordZONE that the system is causing major problems for agents, landlords and tenants and should be enforced by the government, not private citizens.

A leading letting agency has called for major reform of the contentious Right to Rent scheme.

Guy Gittins, managing director of
global firm Chestertons believes the Government – not landlords – should be
responsible for checking would-be tenants’ immigration status.

Says Gittins:
“We would like to see the responsibility for Right to Rents checks – the cost
of which is also passed on to tenants in the form of higher rent – removed from
landlords and their managing agents and handed over to the Home Office.”

Richard Davies, Chestertons’ head of lettings, tells LandlordZONE that Right to Rent can cause issues for new
tenancies, especially when two tenants arrive at different times and only one
of them is present for the start date of the tenancy.

“Additional paperwork needs to
be actioned to accommodate such scenarios,” he says. “This is something that we
often see, on a weekly basis.” 

He adds that last summer, nationals arriving
from the USA or Australia didn’t receive a stamp in their passport on arrival,
and entry was held digitally, however, agents were still checking for stamps. “It
took a whole month for us to be informed by the Home Office about the change.”

Currently,
any landlord found to have rented to someone who doesn’t have the required
immigration status will face a fine of up to £3,000 or a criminal sentence.

The Joint
Council for the Welfare of Immigrants (JCWI) believes
the Right to Rent scheme should be scrapped immediately.

“This
sort of discrimination is caused by the government’s decision to turn private
individuals, including landlords…into border guards,” Chai Patel, legal policy director,
tells LandlordZONE.

“It’s
wrong that private individuals are being conscripted into immigration
enforcement in this way, and we welcome all those who join the campaign for the
‘hostile environment’ to be scrapped.”

Last year, it bought a case
against the Home Office in the High Court, which
agreed that Right to Rent causes racial discrimination. As
a result, the Government was forced to halt its plans to roll the scheme out to
Wales, Scotland and Northern Ireland. After the Government appealed, it’s now
waiting to hear whether the Court of Appeal will rule in its favour.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Exclusive: leading letting agency calls for Right to Rent reform | LandlordZONE.

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Budget 2020: Little for landlords as focus on Coronavirus

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New chancellor Rishi Sunak didn’t have much to offer landlords when he delivered his first budget in the Commons today.  The RLA was disappointed the Chancellor did not take positive action to help reverse the fall in the supply of homes to let by reviewing the tax system as outlined in the association’s submission. Its […]

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INSIGHT: Here’s why tenants shouldn’t complain about paying a deposit in the UK

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Research within the 15 largest rental markets around the world has found that some tenants are asked to put down 10 months’ rent or £6,145 as a deposit.

The UK is one of the most affordable places to begin a tenancy,
research among the world’s 15 largest private rental housing markets has
discovered.

As well as the first month’s rent, tenants in the UK must pay an
average deposit of £811 or a maximum of five weeks’ rent, as the law now
requires.

Only New Zealand and Turkey have lower deposits, although in Sweden
there are no renting deposits at all but, instead tenants must register with a
central national database which holds their rental payment track record.

But elsewhere it’s a different story. In Japan tenants must pay a
deposit equivalent to ten months’ rent or £6,145 and similarly South Korean
renters must also pay ten month’s rent as a deposit, or £4,360, the research by
alternative deposits provider Ome reveals.

In Denmark it’s three month’s rent or £4,432 while in the US tenants
pay three-and-a-half months’ rents or £3,547. And Swiss tenants are required to
pay as much as three months’ rent to secure a rental property, coming in at an
average cost of £3,542.

But in 24 of the 51 states in the US, there is no statutory limit on
security deposits and in these states, landlords and agents can legally charge
whatever they see fit.

Only a handful of countries have average deposits similar to ours
including Germany, Austria, Israel, Canada, Australia and France.

Co-founder of Ome,
Matthew Hooker, says: “Landlords need security to feel comfortable letting someone else
live in one of their largest assets.

“That’s why we’re focusing on how we can provide the landlord with the
exact same financial protection as a cash deposit, whilst reducing the upfront
costs to tenants when moving home to improve their day-to-day cash flow and
rental wellbeing.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – INSIGHT: Here’s why tenants shouldn’t complain about paying a deposit in the UK | LandlordZONE.

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Breaking: Rent rises continue as property shortage bites

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Latest rental index shows rents up by 1.2% over the past year across the UK, but by much more in several regions.

Rents are still
rising across the UK with the average tenancy costing £955 a month, up 1.6% in
the last year.

Nine of the 12 regions monitored by HomeLet
showed an increase in rental values between February 2019 and February 2020,
with two of those regions seeing a rise of more than 5%.

The North-West has
seen the largest jump, with renters there now
having to fork out £755 a month, up 6.8%.

The new HomeLet
Rental Index figures – which analyse brand new tenancies signed in February – show average rents in London are now a
whopping £1,650, up by 3.2% on last year, although South-East rents have bucked the national trend,
falling by 2.7% to £1,018 in the same period.

ARLA Propertymark recently
warned that a rise in rents was inevitable as fewer properties are available
for long-term rent, partly because thousands of landlords faced with burdensome regulations are quitting the private rented sector to offer short-term lets instead. 

Its survey of 1,000 landlords found that 2.7%
had moved from having long-term tenants; it says if this was applied across the
country, it would equate to 46,000 properties being made unavailable for local
people looking for a home.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Breaking: Rent rises continue as property shortage bites | LandlordZONE.

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