Welsh housing market to partially re-open on Monday

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The Welsh government has revealed that it is to relax the housing market lockdown.

In a statement released at 12.30pm today First Minister Mark Drakeford has said that the Welsh housing market can re-start partially on Monday.

Housing viewings can now take place in vacant properties as can home moves where a sale has been agreed but not yet completed.

The updated does not mention rented properties but a Welsh government spokesperson has told LandlordZONE that clarification on this point will be made when the guidance is update later today, but that they ‘assume it will cover the private rental sector’ as well.

We will update our readers on this as soon as it become clear and update this story. Watch this space!

The announcement as it stands is a much more cautious approach than the other parts of the UK. England, Scotland and NI have all moved directly to a full re-opening of their housing markets.

Today’s announcement has been made following a fourth statutory review of the coronavirus regulations by Welsh Ministers, using the latest scientific and medical evidence from the UK Scientific Advisory Group for Emergencies (SAGE), the Welsh Government’s Technical Advisory Cell (TAC) and the advice from the Chief Medical Officer for Wales.

In addition to the housing announcement, all non-essential shops in Wales will be able to re-open and is part of a stepped relaxation of the Welsh lockdown that will announced every Monday for the next three weeks.

First Minister Mark Drakeford said: “The threat of coronavirus hasn’t gone away but thanks to the efforts we have all made over the last few months, the number of people contracting coronavirus each day in Wales is falling, so too is the risk of meeting somebody with virus.

“Given the progress we have made, we are able to take some additional cautious steps to further unlock our society and economy. This includes more retailers being able re-open their businesses, as long as they take measures to minimise the risk to their staff and to the customers who visit their stores.”

Industry reaction

“This is very positive news for the Welsh housing market and whilst safety is a paramount consideration, a sensible return to business is the right approach to ensure the sales and rental sector can start to recover,” says Sean Hoooker of MyDeposits.

“This said property professionals should follow the Welsh Government Guidance very carefully and don’t take unnecessary risks with customers and staff. Their well-being comes first but also this will avoid complaints and disputes in the future”

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EXCLUSIVE: Ministry of housing officials roll back guidance on electrical safety

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Officials at the Ministry of Communities and Local Government have pulled the latest update to the Electrical Safety Standards after LandlordZONE pointed out that discrepancies in its wording were causing confusion among landlords and the wider industry.

Yesterday MHCLG updated its guidance on the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 which suggested that landlords must ensure that national standards for electrical safety are met within their properties by June 1st despite originally stating that they had a month after that date to comply.

This could have meant that millions of landlords were suddenly not compliant with the regulations and who could in theory be issued with a remedial notice by their local council.

An MHCLG spokesperson has now clarified that the update published yesterday has indeed been causing more problems that it was solving and that, therefore, officials are to roll back the new guidance and re-publish the original version.

“The guidance is complicated and is intended for both landlords, agents and local authorities and therefore it needs to be clearer so we’re going to go back to the original and work on making it clearer,” she said. “We are grateful to LandlordZONE for highlighting this.”

Sean Hooker of MyDeposits, says: “The sudden and unannounced update yesterday has caused problems for organisations like MyDeposits who have been briefing their clients about the Electrical Safety Standards, and when they should be ready to comply. It’s good to hear that MHCLG is going to revisit their update.”

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The Future for HMOs post Coronavirus

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During the current pandemic I am now thinking about the after affects on the rental market when it ends.

In particular what everyone thinks will happen to the demand for and the ongoing lettability of HMOs considering they are shared living and whatever the new social norms will be?

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New tech allows landlords to charge for pets without breaking fees ban rules

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A new tech platform lets landlords capitalise on the increase in tenants looking to rent with a pet, while keeping on the rights side of the law.

PlanetRent generates fully compliant contracts in minutes, which can include a standardised pet-friendly clause and a fixed, transparent monthly charge to help cover the costs of keeping a pet in a rented home. It say the typical extra rent charged is £50 a month or £600 a year.

The tenant fees ban outlawed the use of fees charged to tenants who want to live with their pets, but it does allow landlords to charge extra rent for a dog or cat without being considered a ‘fee’.

While 44% of people in the UK are pet-owners, only 7% of buy-to-let investors advertise their property as suitable for pets because many worry about maintenance costs or the insurance implications of housing tenants with pets. 

Planet Rent believes there could be even more potential renters looking for properties to share with a furry friend, as the pandemic has seen an increase in the number of people looking for pets as companions, with dog breeders especially reporting a massive increase in interest. The Kennel Club group recently reported a 180% rise in inquiries over the last year.

Unless buy-to-let landlords change their approach to pet-friendly rentals, they risk losing customers, warns Mary-Anne Bowring, founder of PlanetRent.co.uk.

She says: “While pets are typically associated with higher maintenance costs, landlords risk fishing from an ever-smaller pond by refusing to accommodate renters with pets, especially as the big institutional and corporate landlords entering Britain’s rental market are typically pet-friendly in their developments.”

PlanetRent allows documents to be accessed virtually and enables contracts to be generated in seconds so they can be e-signed by landlords, tenants and agents.

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Who pays what? I’m out of pocket!

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I have a long standing Housing Benefits tenant who I always have had direct payment for as there is a history of drink, drugs and spells in HMP. I received direct payment (by HB ) as normal and expected for period 13 April- 19th May.

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Court of Appeal Rule in Favour of Landlords on Gas Safety Certificate Case

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The Court of Appeal has today sided with private landlords in a case which threatened the way they could repossess properties.

The case of Trecarrell v Rouncefield centred on the relationship between Section 21 notices and gas safety certificates.

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Base Rate held but QE increased by £100 billion

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The Bank of England Monetary Policy Committee (MPC) voted unanimously to hold the base rate at 0.1%. However, they also voted 8 to 1 in favour of increasing Quantitative Easing measures by purchasing an additional £100 billion of government stock taking the total level of asset purchases to £745 billion.

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15% of tenants are in rent arrears but a third are trying to clear their debt

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A third of tenants who are in rent arrears have begun paying back what they owe, latest data from the sector shows.

And among renters only 15% are behind in their rent although platform PayProp says four in five letting agencies it deals with have seen the number of tenants in arrears grow since March – a problem expected to worsen over the coming weeks as Covid-19 continues to affect their finances.

Its new report, using payment data from UK thousands of letting agencies, shows that while more landlords are facing rent arrears, about one-third of agencies actually saw debts reduce as tenants began repaying what they owed.

“After an initial surge in March when Covid-19 started to spread rapidly across the UK, heightened levels of rent arrears could persist for many months to come, despite many tenants settling some of their debt,” says Neil Cobbold, chief sales officer at PayProp.

“Measures like the furlough scheme and Universal Credit increases have helped tenants to continue paying their rent, but payments are still less predictable than usual, and the furlough scheme is almost at an end.” 

Rent arrears

It suggests that if letting agencies keep good records, they can help landlords stay on top of rent arrears, allowing them to see how much is owed and by which tenants, as well as to create payment plans. “Keeping a record of all conversations and agreements made with tenants will also reduce the chances of payment disputes occurring later on,” Cobbold explains. 

And with the evictions process put on hold for a further two months, he adds that landlords will need to consider their options carefully as there’s no guarantee that the Government won’t extend it further.

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Why are more DIY landlords looking to use agents on full management?

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These are turbulent times for both landlords and agents: Covid-19 has thrown an unprecedented curve-ball into what was already an increasingly complex environment in the UK lettings market, making more landlords consider full management.

The ever increasing workload and legal complexity of letting out property as a DIY landlord, along with a narrowing of profit margins, is encouraging landlords to either think about selling up, or else off-load the pressure of managing onto someone else – a professional letting management service.

Looking at the positives; tenant demand continues apace, with most lettings being achieved very quickly. With some landlords taking the decision to sell-up, this will only serve to exacerbate the shortage of rental accommodation and it will therefore sustain continued tenant demand and increase market rents. In fact from a contrarian investment viewpoint, when things a looking their most gloomy, and investors are selling-up, now could be the optimum time to be thinking about investing in property rentals bargains for a long-term result.

Most of the new legislation, in my view, such as the suggested abolition of section 21, will make little difference to the way the market works, or to the average tenant’s experience, if anything it could make it worse; it will simply create more work and expertise to make it work. For example landlords and agents will be far more stringent with their selection processes. At the end of the day, rental accommodation is still desperately needed, landlords are still needed to supply it, and there’s still a great opportunity for buy-to-let.

Choosing a letting agent

Engaging an experienced and competent letting agency can make the landlord’s life much easier, but the opposite applies if you engage a bad agent. Once you’ve signed a full management contract with an agent (as opposed to a let-only contract) you could be stuck with them for the duration of the tenant’s stay, so a lot of care is needed when selecting your agent.

You should do careful research before choosing an agency that is well-established and with a track-record of successfully managing private rented accommodation. Ask around locally, request to speak to existing long-term clients to make sure they are happy with the service, check online reviews and make sure they are members of at lease one of the main professional associations.

These associations should be preferably ARLA Propertymark, the National Approved Lettings Scheme’ (NALS), the ‘Ombudsman Services’ scheme, the UK Association of Letting Agents (UKALA) and the National Residential Landlords Association (NRLA). The must by also have in place client money protection (CMP) insurance and a Property Redress Scheme. Look for evidence of these on the company paperwork and websites and its a good idea to check current membership with the scheme providers.

Make sure you are happy with the terms of their contract before signing, check for dubious clauses and if necessary have a solicitor look over it; don’t be afraid to negotiate on management fees, though driving down the fees too low could be counter productive – you get what you pay for.

What are the advantage of using a good agent?

A good letting agent should market your property proactively, they often already have enqiurers on their books, and they will quickly find you the right tenants for the property. They will make sure your property meets all the current letting and safety regulations, and they will handle all the necessary checks and letting documentation to make sure you are covered, should things go wrong with the tenancy.

For a standard full management fee of around 15% of the rental income, which could be lower depending on your negotiations and the number of properties you sign up with, and your importance to the agency, rent will be collected on your behalf, and all communications with the tenant/s taken care of – in fact as a landlord you may never meet the tenants if you don’t want to.

The agent will be geared up to deal with the day-to-day management issues, you will have a set spending limit so they don’t have to bother you with minor emergency repair issues, and they will have a regular programme of inspections in the calendar.

This type of arrangement with 24/7 cover is going to be particularly useful if you live a long distance from your properties, if you work away from home a lot of if you go on holiday – invariably problems with tenancies always occur at the least opportune times, so in this way you are covered for every eventuality.

As from June last year letting agents are unable to charge admin fees to tenants, so things like credit checks and referencing and inventory checks must either be absorbed into the standard fee they charge their landlord clients, or an additional fee on top. It’s a good idea to make sure how the agent is going to deal with this and perhaps compare their charging structure with other competing agents, bearing in mind cheapest is not always best.

You want an agent that’s proactive in the way they market their properties, so a quick anonymous test using a telephone equity might be a prudent move before making a decision on an agent, and make sure they are using a range of strategies to proactively market, particularly their on-line presence. You might check their property listings on a property portal like Rightmove or Zoopla to see how they present properties to market, and how successfully they rented out many properties in your area recently.

There are many benefits to using a full management agency and the trade-off between paying the fees and getting your life back can be more than worth it. However, there are some pretty poor agents out there as well as the really professional ones, so you do need to exercise great care; carry out through due diligence before signing a contract.

And remember, it’s not always the big national chains that give the best service, though most of them are very professional, the small local independent with a good reputation can often give you the personal attention and professionalism you desire.

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BREAKING: Court of Appeal backs landlord in key Gas Safety certificate and Section 21 evictions case

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The Court of Appeal has handed down judgement on the contentious Trecarrell House vs Patricia Rouncefield case which seeks to clarify if landlords can serve a Section 21 eviction notice on a tenant when a Gas Safety Certificate has been served after a tenancy has begun, and has backed landlords.

A valid certificate is one of several pieces of paperwork landlords must give tenants before they move into a property in order to enable a later valid Section 21 eviction.

Tenant Patricia Rouncefield has sought to clarify this important point of law after her landlord Trecarrell House attempted to serve a S21 notice on her despite having provided a Gas Safety Certificate after her tenancy began

Three judges, Lord Justices Patten, King and Moylan, have this morning passed judgement in this case following the hearing in January during which evidence was presented from both sides.

Gas safety certificate

Rouncefield’s property had a valid gas certificate both before and during her tenancy but she was not given a copy prior to or when she moved in During February 2017. She was served with a Section 21 notice on 1^st May 2018.

The judges each gave their own commentary on the case but agreed that ’as long as the [Gas Safety certificate] is provided to the tenant prior to service of the section 21, the notice will be valid’.

In the commentary on the decision, the lead judge said: “It is difficult to reconcile this interpretation of the law with legislation which would appear to be aimed at ensuring the safety of tenants.

“Similarly, I find it hard to balance this interpretation with the actual wording of regulation 36(6)(b) of the 1998 Regulations which states that the GSR needs to be given to any new tenant “before that tenant occupies those premises.

“I would agree with Moylan LJ’s characterisation of the majority finding: late service of the GSR for the purposes of 36(6)(b) becomes a mere “procedural requirement” rather than a “substantive sanction”.

Fantastic news

Tim Frome, Head of Legal at Landlord Action, says: “We’ve been waiting with baited breath for this decision from the Court of Appeal and on the face of it the news is fantastic for landlords such that, due to an admin error, they can’t be prevented from serving a Section 21 notice.

“This judgement may be further appealed, but as long as a certificate is served before a S21 notice then that will be sufficient.

“At Landlord Action we have a small percentage of cases where this problem has arisen and our clients will be heaving a huge sigh of relief.”

Read the judgement in full.

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