Council starts charm offensive to persuade landlords to help tenants ahead of evictions re-start

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As key courts prepare to hear possession hearings once more later this month, Hackney council has written to all its registered landlords to ask them to give tenants more time to pay and also consider rent reductions.

Landlords in Hackney are some of the first being asked to help their struggling tenants when possession hearings restart in three weeks’ time.

The local council has written to all its 2,500 registered private landlords
as it believes
Hackney’s high rents mean support through sick pay or Universal Credit is often
not enough to provide security due to the government’s benefits cap.

“We’re grateful to the many landlords in Hackney who are already
doing this, but the real challenge will come as the freeze on evictions ends
and the economic impact of the pandemic hits,” says councillor
Sem Moema, mayoral adviser for private renting and housing affordability.

“These are issues on which we need the Government to act, but
until then I’m asking landlords to do their bit to help prevent a homelessness
crisis in Hackney.”

Instead of beginning the evictions process, the letter asks landlords to offer time and flexibility where tenants are struggling financially, and to consider rent reductions where a tenant really can’t pay.

She tells LandlordZONE that private renters are among those least protected from the coronavirus pandemic, which is why it’s vital that landlords go beyond the requirements set by Government and give their tenants protection and flexibility where it’s needed.

Hackney Council has also written to Housing Secretary Robert Jenrick asking for a long-term plan to provide continued protection for private renters as it says their security is at risk while the Government has yet to announce whether it’s extending the ban on evictions. It is still waiting for a response.

The council also recently refused to back a London ‘rent strike’.

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Private tenants twice as likely to be behind in rent as their mortgage paying counterparts

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New report reveals how tenants are less likely to be financially secure, and what Ministers should do to prevent a huge debt pile of housing arrears accumulating.

A radical change in Government policy is urgently needed to respond to the plight of private tenants as new research shows renters are twice as likely to default on their rent as mortgage holders.

The Resolution Foundation has reported on levels of housing stress and says the Coronavirus crisis has highlighted inequalities between renters and homeowners, with renters up to twice as likely to have fallen behind with their housing payments compared to mortgaged home owners.

Its survey of more than 6,000 people found that renters in lower paid jobs, as well as the oldest and youngest renters, were more likely than mortgaged owners to have lost their job or been furloughed.

While 8% of home owners with a mortgage have failed to cover their housing costs in recent weeks, the rate rises to 13% of private renters. And of those renters who are unable to cover housing costs, 25% were claiming Universal Credit or Housing Benefit before the crisis, while 37% have made a claim for Universal Credit since then.

Twice as likely

Lindsay Judge, principal research and policy analyst, says renters who’ve made a benefit claim since the Coronavirus crisis began are almost three times as likely to be struggling with their housing costs as the average person, and experiencing significantly more strain than those who receiving housing support beforehand.

Judge says: “We argue that policy needs to respond to the plight of private renters. If families – and indeed landlords – are to be protected from housing arrears, the system needs to be as all-encompassing as possible, by suspending capital rules, for example and by lifting the benefit cap.”

The foundation believes that renters have suffered disproportionately when it to comes to covering housing costs because 13% of mortgaged home owners held no savings before the pandemic, compared to 23% of private renters

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Are tenants still being charged illegal fees by some agents and landlords?

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LandlordZONE looks at claims made in an article with The Times yesterday that tenants continue to be charged illegal fees including check-out fees, deposits of more than five weeks’ rent and excessive charges to replace lost keys.

A national newspaper article has claimed that renters are still being hit with illegal fees a year after the Tenant Fees Act went live.

Industry figures back this up, revealing that the practice is on the rise, while both Generation Rent and Shelter say they have anecdotal evidence to back this up.

Sean Hooker of the Property Redress Scheme says that, while the numbers remain very small, he says they are likely to be larger due to under-reporting by tenants, and that until Monday only new or renewed tenancies were covered. As we reported on Monday, the Tenant Fees Ban now covers all ASTs regardless of when they started.

Research by The Property Ombudsman shows that out of 5,106 complaints it received last year, 341 involved illegal fees. This is up from 110 the year before, but out of the 341 only 21 cases were verified and 14 upheld. The PRS, on the other hand, says it received 146 initial enquiries of which 43 (totalling £35,052) were resolved and 11 accepted but later closed.

Under reporting

Hooker says the reasons for under-reporting are varied. This includes tenant ignorance of both the act and what to do if they are charged an illegal fee, while others opt for a refund and apology, rather than report the agent involved to Trading Standards.

Redress schemes like the TPO and the PRS, on the other hand, only get involved if an agent will not return a contested fee and are only obliged to report ‘systematic breaches’ to Trading Standards.

But while landlords may consider this all a storm in a teacup, if they or their letting agent charges a tenant a prohibited fee, it then makes evicting a tenant extremely difficult further down the line, in the same way failing to provide a valid gas safety certificate or EPC does, and fines for first offences can reach £5,000 while for multiple breaches of the law it’s £30,000.

Read The Times articles (requires subscription).

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Rent to Rent lease termination?

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I signed a 5 year rent to Rent lease for a large property consisting of several flats. I decided to terminate the rent to Rent agreement and gave one years notice, even though the contract was silent on termination, to expire on the contract end date.

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Clutching at CGT straws?

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I sold a property in January which I’ve rented out for nearly 30 years, consequently there is a sizeable Capital Gains Tax bill to pay.

I was due to complete on another property in March which would have resulted in a significant loss which I would have used to offset against the other property.

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Minister dashes hopes that new Universal Credit system will see wider use of direct rent payments to landlords

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Despite praising the new online Alternative Payment Arrangements system, Secretary of State Thérèse Coffey has told MPs that she doesn’t want to see a return to the widespread use of directly-paid housing benefit.

Landlords hoping that that the new online Universal Credit direct rent payments system for Alternative Payments Arrangements (APAs) will ease the pain of renting properties to claimants have been dashed by Thérèse Coffey, Secretary of State for Work and Pensions.

In a session before a Zoom-hosted parliamentary scrutiny committee yesterday afternoon, she and DWP Change Director Neil Couling were grilled by MPs on a wide range of Universal Credit issues including housing benefit.

They confirmed that some 2,500 APA applications have so far been processed using the new system since mid-May.

Coffey said she welcomed the new system which, as LandlordZONE reported on 14^th May, was developed in partnership with a specialist consultancy, Caridon Landlord Systems.

Online APAs

It enables landlords and tenants to request that the housing portion of Universal Credit payments are diverted directly to the landlord via an APA without the need for any physical paperwork.

But Coffey made clear during the discussions that this system is only for those tenants who ‘really struggling’, rather than being a new and easier way for more landlords to arrange APAs.

Coffey said she didn’t want to see a return to the ‘default’ payment of rent to claimants that had existed before Universal Credit was introduced, and that re-introducing it now would ‘add too much complication’ to the system.

This was a reference to the way Universal Credit payments contract and expand for claimants depending on how much they work, what kind of accommodation they live in and their personal circumstances.

But Neil Couling was more candid about why the new system is unlikely to be rolled out more widely; he said the DWP is still set on compelling claimants to run their own personal finances rather than relying on the state for rent payments, and that the new online system was there only to catch the most distressed cases.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Minister dashes hopes that new Universal Credit system will see wider use of direct rent payments to landlords | LandlordZONE.

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Bank of England mortgage figures take an unsurprising tumble

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The Bank of England have released their money and credit statistics for April: Click here. Unsurprisingly, weakness in the housing market caused by the pandemic emergency resulted in a tumble in April’s mortgage market activity figures.

The number of mortgage approvals for house purchases fell 80% below the February level  to 15,800 ( see chart 4).

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Tenants fallen out and neither will leave?

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I have 2 tenants in my property who each rent a room each and share a communal space. Since living together, they have argued non-stop over really petty things and were contacting me daily to complain about each other.

Finally

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