GET READY: New possession hearing rules WILL add time and cost to existing evictions as ban end looms

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Evictions expert Paul Shamplina of Landlord Action has urged landlords waiting to re-start possession actions over non-payment of rent dating from before the pandemic to get their paperwork ready now to comply with the new court rules revealed on Friday.

These require that, in order to proceed with existing actions, landlords must inform both the court and their tenant that they wish to resume their claim by serving a ‘reactivation notice’.

Landlord Action has approximately 500 cases ‘stayed’ in the system and is ensuring its clients have their reactivation notices served to the courts as soon as possible once they re-open, although there are believed to be 5,700 such cases in the system in total.

Reactivation notices are part of several rule changes laid before parliament on Friday within the Civil Procedure (Amendment No. 4) (Coronavirus) Rules 2020 that add a ‘Covid temporary provision’ to existing regulations.

“The reason behind this is to ensure the court’s time is used effectively and on the right cases after hearing begin on 24^th August,” says Paul Offley, the Guild of Property Professionals’ Compliance Officer.

“If the matter has been resolved through another means, the case can be withdrawn, something the government is encouraging landlords to do rather than pursuing non-priority cases through the courts.”

As well as reactivation notices, landlords must provide a court with relevant details regarding the tenant’s circumstances. This must include the effect of the pandemic on the tenant and his or her dependants, so that the court can consider vulnerability, disability, social security position and those who are shielding.

Landlords must also provide a list of the full arrears history before the hearing.

Block listings

Although these rules are reasonable on the face of it, the realities of both social distancing in courts, which mean they will no longer be able to offer the usual ‘block listings’, and the extra time all this paperwork will add to the process, mean many landlords face additional time and expense before they can regain possession.

“Many will struggle to find out what their tenant’s current situation because the relationship has totally broken down and that’s why it’s ended up in court,” says Shamplina.

“These new processes will therefore be hard for landlords to implement, and of course the landlord cannot harass the tenant to get the information if they are unforthcoming.

“Unfortunately for many landlords who have already been waiting for months to regain possession before the pandemic it will be pot luck – some courts will have huge backlogs while others will not.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – GET READY: New possession hearing rules WILL add time and cost to existing evictions as ban end looms | LandlordZONE.

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SPOTLIGHT: Why have so many landlords been remortgaging during Covid?

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Landlords raising capital – to either act as a buffer from the impact of COVID or to invest in more property – pushed up the level of buy-to-let re-mortgage business in the second quarter of the year.

Research by Paragon Bank found that the ability to secure a better interest rate was the most common reason for re-mortgaging for 54% of landlords, while 30% re-mortgaged to raise capital.

This made it the second most popular reason, accounting for double the amount of business than all the remaining reasons combined.

Mortgage brokers reported that re-mortgages accounted for 60% of buy-to-let cases in the second quarter, up from 48% in the previous quarter, as new lending for house buying fell because of the lockdown. 

Just Mortgage Brokers director Carl Shave says the 30% figure isn’t surprising.

“The two main drivers for people to re-mortgage is indeed for a better product and/or to raise capital,” he tells LandlordZONE. 

“The reasons for the capital raising vary and although some landlords will use this as a way to shore up their defences in relation to any financial impact caused by the pandemic, the most popular reason continues to be to invest in additional property, especially portfolio clients who are looking to increase their property holding.”

Portfolio landlord growth

Paragon’s survey also highlighted the growing prominence of portfolio landlords in the sector; landlords who own four or more properties accounted for the highest proportion of buy-to-let mortgage business, rising from 25% in the first quarter to 28% over the last three months.

Moray Hulme, Paragon director for mortgage sales, says the findings show that landlords have not only been resilient during the recent challenges but have also been planning. 

He adds: “The data also supports the idea that there is a shift towards a professionalisation of the private rented sector. This is positive because a higher number of professional landlords has been shown to correlate with higher standards in the sector.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – SPOTLIGHT: Why have so many landlords been remortgaging during Covid? | LandlordZONE.

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Leasehold reform recommendations published

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The Law Commission of England and Wales has published recommendations to transform home ownership. It has been estimated there are at least 4.3 million leasehold homes in England alone. If enacted our reforms would help those owners and pave the way for a system where flats are sold with freehold title (as part of a commonhold).

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How to Source Bargain Property Post-Covid – Wednesday 29th July

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This Month’s Theme – Online Networking Event
How To Find Bargain Property Deals: Direct From Vendor & Through Auctions

Live Stream with: Our Four Property Experts

Jay Howard, Claire Norwood, Hanif Khan
& host Ranjan Bhattacharya

Don’t miss out.

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Leading inventory service says get ready for a surge in tenant moves

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Agents and landlords will need to strike a balance between managing the ongoing impact of Covid-19 while at the same time preparing for tenant moves and new tenancies.

No Letting Go, the UK’s largest provider of inventory services is predicting a surge of tenant moves in the coming weeks as lock-down eases.

There are positive signs of a recovery in the rental market which inevitably will result in a suge given the pent-up desire for moves as lockdown measures are eased and the market’s recent recovery continues.

Letting agents and landlords are therefore being advised by No Letting Go to get prepared for a wave of new tenancies while still managing the ongoing impact of Covid-19.

The UK’s largest provider of inventory services says, “an efficiently executed pre-tenancy process can pave the way for a smooth tenancy and increase satisfaction for all stakeholders.”

Following the reopening of the property market on May 13, evidence from numerous sources suggests that rental activity has rebounded impressively and at a faster rate even than the sales market, which has also been positive.

According to digital lettings platform Goodlord, the number of completed lets was above the 2019 average for all but six days in June, while new tenancy applications remained 90% above 2019 levels last month.

London estate agents Chestertons the number of new tenants registering for a new property was up 43% in June compared to May, with figures for viewings, offers and agreed tenancies all significantly higher over the same period.

“It’s clear that tenants have been buoyed by the recovery of the rental market and that due to the extraordinary circumstances, activity in recent weeks has been significantly higher than the annual average,” says Nick Lyons, CEO and Founder of No Letting Go.

“The combination of those tenants whose contracts are expiring and need to move, those who wanted to move before or during lockdown but couldn’t and those that decided they want to move during lockdown, means the next few weeks and months are likely to be extremely busy for agents and landlords.”

Landlords and agents need to keep battling virus impact while remaining on top of everything while maintaining high levels of service and compliance will be a big challenge for property professionals,” says Lyons.

“First and foremost, agents and landlords need to ensure all safety precautions are taken and government guidance is followed. This in itself has been a steep learning curve for the industry.”

“The balancing act of achieving this while continuing to stay on top of all the administrative processes required to grant a new tenancy marks the next step for agents and landlords to negotiate.”

He cites the raft of legislation that now governs the private rental sector with landlords needing to comply with over 150 pieces of legislation, up from 118 (32%) in 2010, according to the Residential Landlords Association. This increasing pressure is demonstrated by the introduction of mandatory electricity checks for new lets this month, as well as changes to the Tenant Fees Act in June.

“We know from experience that getting all the ducks in a row at the start of a tenancy can help to reduce the chances of disputes or the potential need for eviction. It also increases the chance of a happy tenancy and the subsequent prospects of a long-term residency which benefits all parties,” explains Lyons.

“As well as meeting all regulations and carrying out the relevant health and safety checks, it’s important that processes such as referencing tenants, carrying out a thorough inventory check-in and monitoring properties through mid-term inspections are given due care and attention.”

“Landlords and agents should never take the risk of accepting potentially problematic tenants or not having the necessary records in place to protect against property damage or rent arrears. However, during a time of such uncertainty and financial instability, protecting investments is vital,” says Lyons.

He acknowledges that the workload of agents and landlords who self-manage is likely to be considerably higher for many months to come as they aim to overcome numerous obstacles.

“For letting agents, having an adaptable and dedicated staff will be more crucial than ever. Meanwhile, all stakeholders will need to make sure they work with the best industry suppliers and use technology to increase efficiency to meet compliance obligations while a quality service,” Lyons concludes.

No Letting Go is the UK’s largest provider of inventory services with over 65 offices across the country, offering a range of pre-tenancy, check-in, property management and end of tenancy services.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Leading inventory service says get ready for a surge in tenant moves | LandlordZONE.

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LATEST: Radical overhaul of private renting needed says new report

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Tenants get more consumer protection when buying a fridge-freezer than when renting a house, according to a radical new report on the private rented sector.

Left-wing think-tank The Smith Institute says these rights should be bolstered and that those taken for granted in sectors such as utilities and financial services should be applied to renting.

As moving home is such a stressful and dislocating experience, it believes tenants can be less reluctant to exercise their consumer sovereignty by ‘switching’.

A plethora of Acts of Parliament and regulations can be confusing, with a real lack of clarity for both tenants and landlords around rights and obligations.

Landlord register

Its report criticises the lack of basic information on important safety issues for tenants and the lack of an accessible public register so they can check to see if they are dealing with a landlord who has a good track record of treating renters fairly.

The Smith Institute is also calling on the Government to protect and empower renters with a raft of measures including a new Private Rented Sector Regulator to ensure consumers are treated fairly and the introduction of an open-ended Private Residential Tenancy, including removing no-fault evictions and increasing notice periods for longer term tenants.

It suggests reforming redress and dispute resolution by introducing mandatory membership of the Housing Ombudsman Service for landlords and lettings agents, along with an independent Private Renters Panel to represent the interests of renters and to help shape Government policy.

It also proposes that all landlords should provide better information for tenants, setting out terms of the tenancy, information about the property, information about the landlord and responsibilities of tenants and landlords.

A review of mandatory third-party deposit schemes is also advised, with a new National Tenancy Deposit Scheme if these aren’t robust enough.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Radical overhaul of private renting needed says new report | LandlordZONE.

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Fast track to add 2 more storeys

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New laws laid in Parliament (21 July 2020) will deliver much-needed new homes and revitalise town centres across England, Housing Secretary Robert Jenrick has announced.

The new rules, which will come into effect by September, will mean full planning applications will not be required to demolish and rebuild unused buildings as homes and commercial and retail properties can be quickly repurposed to help revive our high streets and town centres.

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Electric meters for tenants – card pre-pay or smart?

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I’m renovating a five-bed, three-story flat into three separate flats (a floor each).

I now need to determine what to fit in each flat:

Prepay card meter – tenants know how much they have, top-ups when need to

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BREAKING: Most radical shake-up of leasehold in a generation proposed by Law Commission

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Landlords could be forced to absorb greater legal costs if the takes on board the Law Commission’s most significant proposals for leasehold reform in a generation.

Its three new reports published today on leasehold enfranchisement, the right to manage and commonhold, propose reforms of the leasehold system and its replacement with a revived commonhold tenure.

It calls for an overhaul of the right to manage process and says landlords’ legal costs should not be passed to leaseholders, blaming costs as the prime reason why applications fail.

Under the proposals, leasehold houses would also be able to opt for right to manage, removing imposed management by the freeholder.

Campaigning group Leasehold Knowledge Partnership, says: “Coupled with the Government’s commitment to set new ground rents to zero and to ban leasehold houses, the proposals demonstrate in compelling detail why the leasehold system needs reform and how it could be done.

“It is a blueprint for a Government to reform this entire sector, if it so chooses.”

The Law Commission suggests that all new lease extensions would be 990 years, instead of the current 90 (flats) and 50 (houses), and that there should be no ongoing ground rent.

Under its reforms, landlords would not be able to pass on their legal costs during the enfranchisement process. In its commonhold report, it makes recommendations that would make it not just a workable alternative to residential leasehold, but the preferred alternative.

LKP adds that these reports are a, “nail in the coffin for predatory commercial interests seeking to exploit the feudal leasehold system”. But it adds that they depend on the Government choosing to bring them in.

The Government tasked the Law Commission to study the sector which it said, “has far too many problems including disproportionate costs to extend leases; poor value property management; and a slow and costly sales process”.

Read more about leasehold reform and what it could mean for landlords.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Most radical shake-up of leasehold in a generation proposed by Law Commission | LandlordZONE.

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