English landlords are looking to Scotland for advice on tenancy issues

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Joint managing director of the national online property management firm, David Alexander, says there’s an increasing number of English landlords seeking advice from the Scottish lettings market as the eviction moratorium deadline approaches.

Scotland introduced new letting rules in 2017 and made no-fault evictions (the equivalent of Section 21 in England and Wales) illegal in the country. Now, Scottish landlords are having to navigate a new residential tenancy regime that gives tenants much greater security of tenure. It necessitates a more conciliatory approach which English and Welsh landlords may yet have to deal with, thinks Mr Alexander.

However, Covid has brought forward the need for English & Welsh landlords to strike a balance, to approach the landlord – tenant relationship in a different way than perhaps many have hitherto been used to.

Over the last few weeks says Alexander, apropos has been contacted by many English landlords seeking advice on how to deal with their tenants over issues created during the moratorium on evictions caused by the coronavirus pandemic.

In Scotland, landlords have learned to “develop a more conciliatory and mutually beneficial means of working with tenants which has proved particularly effective during the pandemic,” says Alexander.

English and Welsh landlords know this and have been contacting the firm to seek advice about lessons learned in Scotland, and on how they deal with their tenants. The eviction bad in particular has become a major issue for many landlords who now find themselves without recourse to the courts and the default Section 21 route to eviction when rent arrears, causing damage to property or anti-social behaviour raises its ugly head.

Alexander says the problem is exacerbated by the fact that many landlords have failed to established close working relationships with their tenants prior to the pandemic “so communication is not as open and effective as it needs to be to deal with these difficult circumstances.”

“I would encourage all landlords and agents to establish a strong dialogue to see if a negotiation on payments is possible. We have found that the majority of tenants are amenable to this approach,” Alexander comments.

The tenancy law changes introduced in Scotland some time ago have introduced a regulatory regime that is very different compared with the rest of the UK, with legislation which is much more tenant friendly. Landlords and agents have had no choice but to develop closer relationships with their tenants and evolve “more effective communication strategies so that everyone involved understands what is happening, what the processes are, and can generate workable solutions to difficult circumstances.”

Mr Alexander, writing for Scottish Housing News said,

“Evictions are always a last resort but sometimes they are inevitable and necessary. This is unfortunate but true. However, if the landlord, agents, and tenants have developed good communications and understand each other then this can go a long way to help avoiding confrontation.

“There will always be tenants who avoid rent payments and there will always be landlords and agents who immediately call for evictions. The best solution is somewhere in the middle. Encourage the tenant to pay through negotiation and it is a win-win situation for all involved.

“To have to go to court to evict is costly, time consuming, and unprofitable but occasionally necessary so it does happen, but no-one should undertake this lightly. If you can come to an agreement with the tenant, the outcome will be more positive.!

“The Scottish system has made everyone involved in the private rented sector become more understanding of each other’s circumstances and attuned to their needs. The result is a system that has been more able to adapt to these extraordinary circumstances.”

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BREAKING: Government considering evictions ban extension for commercial tenants too

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Commercial landlords are anxiously waiting to discover if the Government intends to extend the evictions ban until the end of the year.

The Financial Times quotes Government sources who say it’s preparing to extend the ban which prevents commercial tenants, such as offices and retailers, from being evicted from their premises, and set to end on 30^th September.

It risks angering many landlords if it does, who are still hurting from collecting only 18.2% of commercial rents on the last quarter day, 24th June. They claim it has been misused by some tenants who can afford to pay rent.

According to Melanie Leech, chief executive of the British Property Federation, the moratorium must come to an end. She says: “Well-financed businesses have been exploiting the Government intervention to avoid paying rent, when they are indeed able to pay, and this puts at risk our sector’s ability to support vulnerable tenants.”

Shops and restaurants in city centres, particularly London, are struggling with far fewer customers with some retailers such as New Look demanding that landlords provide them with rent reductions.

Grant support

Other trade bodies including UKHospitality and the British Retail Consortium have joined calls for the Government to step in and support companies struggling with the pandemic, with measures including grant support.

The British Chambers of Commerce has also called on it to introduce a comprehensive stimulus package to reduce the overall cost burden on firms. 

It suggests changes to the Employment Allowance and an increase to the threshold for National Insurance contributions. In a letter to the Prime Minister, BCC president Baroness Ruby McGregor-Smith says businesses face “the most difficult trading conditions in post-war history”.

Read the FT piece (requires subscription)

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What’s really happening in the property market and how will this affect landlords?

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While no-one expected a booming market post the Covid lockdown, there are those of us who questioned how much the housing market would suffer during these very strange times.

Currently the most robust housing market forecast seems to be from Hometrack who are predicting property prices to end up being 2-3% up this year, versus many other forecasts who were predicting a 5-16% fall.

There are some falls though, with Aberdeen still suffering year on year as low oil prices are still damaging the local economy. Rents on the other hand are performing very differently up and down the country with some parts of London seeing falls due to excess stock from the short term accommodation market, while other parts of the country are seeing rents moving forward, especially for houses.

For example, the latest Belvoir Index suggests areas such as Tunbridge Wells are seeing increased rents for flats and houses, due to a surge in tenants and as continued low stock levels mean they are forecast to increase on-going.  (Link: )

For landlords, the market very much depends on whether you own flats or houses and your tenants’ ability to pay. As mentioned, houses are in high demand both to purchase and rent, so whether you are looking to cash in or continue letting, landlords can feel fairly confident they can ride out the next 12 – 24 months economic turbulence we are likely to see. However, for flat owners, the market isn’t necessarily as rosy.

The trick moving forward is to make sure your tenants have ‘Covid-safe’ jobs, such as working in food retailing, a key worker and of course our amazing NHS heroes.

Alternatively, plan if your tenant loses their job and see if you can help them get Universal Credit and check what the local housing allowance would be to see if there is a way you can still help them stay in the property.

New tenants

For those that need new tenants, it may be worth checking if your lender/insurance company allows you to let to those on Universal Credit, as although there are issues with the payment system and in the past it has put tenants at a disadvantage, local housing allowances have been raised in some areas and an extra £1,000 has been given to recipients to the end of the tax year in 2021.

If this has been a no for you in the past (don’t forget you can’t discriminate), for the future they could be more likely to pay than someone who may rent privately and is at risk of losing their job.

Best time to buy?

The final question I have seen many ask is when is the best time to buy? Should investors for example hang on until next year now to purchase a home at a discount? The answer to this is, as always, it depends. We are in for one of the strangest recessions on record.

In the last two recessions, prices have pretty much fallen across the board by around 20%. However, in this recession although undoubtedly some could fall by this amount, quite a few might not. The reason being is that unlike many property recessions, we aren’t heading into it this one off the back of huge price rises from a boom.

Also, over half the property owners now own outright with many of the rest having repayment mortgages, so homeowners are unlikely to be under as much threat of losing their home as normal. And as far as job losses are concerned, sadly it’s likely to be those renting who are more at risk than homeowners.

Add to this that not everyone is likely to suffer financially as normally happens in a recession, properties that rarely come up for sale, especially ‘doer uppers’ on popular local roads, may not see any change in price at all if demand is much higher than supply.

However, we aren’t likely to know the extent of the impact of the Covid recession on the property market until the early part of 2021 or even post the end of the stamp duty holiday, so for now unless you are looking at long term investment, it might be better to wait a few months to see what happens next. 

Kate Faulkner is one of the most respected sources of property market data and advice and runs consultancy PropertyChecklists.co.uk

She has also written seven property books, including the Which? Essential Property Guides, and is regularly featured on television and radio as an expert property market commentator.

Her appearances have included BBC Breakfast, Your Money, GMTV, Radio 4 You & Yours and The Big Questions. She has degrees in Economics and Marketing, plus an MBA, and is a member of the Institute of Directors and the Chartered Institute of Marketing.

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Fail! Survey finds shocking number of unsafe gas boilers in UK including within PRS

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British Gas engineers found 26,000 unsafe or dangerous gas and electric appliances in UK homes during the first eight months of the year even though, LandlordZONE has been told, this includes rented properties, suggesting many PRS homes are still failing to meet basic safety standards.

Centrica, which owns British Gas, has also said many of these unsafe appliances included gas boilers despite the requirement that a landlord must provide a gas safety certificate each year for such appliances.

The research has been released by British Gas to tie-in with the tenth annual Gas Safety Week, which is currently under way (14^th-20^th September).

Despite the fact that the data includes rented homes, the research also revealed that the average person in the UK hasn’t had their gas appliances serviced by a qualified and gas safe registered engineer in more than 18 months – despite a fifth believing they might be faulty or dangerous.

LandlordZONE asked Centrica if it knew how many of the 26,000 dangerous appliances were in rented properties, but we have been told this information is not available, and only that ‘the data does include rented as well as owned homes’.

Safety basics

But the survey also revealed astonishing ignorance of home safety basics, with a fifth saying they didn’t even know that annual boiler services are recommended, and a third saying they had no idea that being able to smell gas can be an indication that something is unsafe.

With half of those polled saying they never worry about the safety of the gas appliances in their home, British Gas says it is using Gas Safety Week to help raise awareness and understanding – specifically the importance of having carbon monoxide detectors installed.

As well as the legal requirement to provide tenants with a gas safety certificate, the NRLA is reminding landlords that they are responsible for making sure all gas appliances, including the installation of pipe or flues, are maintained in a safe condition throughout the entire time the property is occupied.

Find out more about Gas Safety Week.

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It’s been 6 months but…

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The current ban on repossessions in the residential rental market in England and Wales is due to end on Sunday 20th This follows a U-turn on the 21st August which saw the Government extend the ban by a further month in chaotic

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London’s foreign and UK student renters return to the market despite Covid fears

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A new wave of overseas and domestic students have ignored COVID fears to look for digs in central London.

Despite concerns that the student market could be heavily impacted this term, estate agent Dexters reports that 1,800 have signed up as potential tenants at its central 12 offices during the last month, with others registering at the company’s network of 70 offices across the capital.

Students make up about 25% of all tenants registering with its city central offices, mainly in Bloombsury and Fitzrovia, South Kensington, Chelsea and Notting Hill.

Marketing director Richard Page says some industry commentators have been anxious about whether the student accommodation market would return due to uncertainties related to Covid such as travel and social distancing, as well as the ongoing lack of clarity around fees for EU students due to the Brexit discussions.

He adds: “Our new Dexters’ London student survey shows that this September the student market has returned in force to the capital’s lettings sector and our findings underline the continuing appeal of London and global confidence in the UK university system and the calibre of courses being offered.”  

In the last academic year, more than 372,000 higher education students were living and studying in London, 107,200 of whom were from overseas.

Dexters says their requirements differ widely; youngsters typically pay £200 to £500 per week for one-or two-bedroom flats in Fitzrovia, while Mayfair attracts super-affluent ‘platinum students’ paying between £1,500 to £3,000 a week for air conditioning, underfloor heating, an on-site gym and CCTV security.

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Government forcing landlords to house non-paying tenants for lengthy periods

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When Robert Jenrick made his shock announcement on the 21st of August of a new 6-month notice period in England (copying ‘socialist’ Wales) he further abrogated the state’s responsibility. How could it be right that private citizens are now made to house non-paying tenants whom they ordinarily would have been able to evict after ‘only’ losing about 7 months’ rent?

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BREAKING: Compulsory licensing of Airbnb moves a step closer to reality in Scotland

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Compulsory regulation of Airbnb short-lets in Scotland is now only 18 months away after the country’s government launched its final consultation on proposals for the controversial housing sector.

This will then lead to legislation that it expects to go live by April 2021.

The plans, assuming they are voted through the Scottish parliament, will be the first of their kind in the UK and will put pressure on England, Wales and Northern Ireland to follow suit.

The new powers will cover all short-lets, which will be counted as accommodation made available for use for letting for a cumulative period of 28 days or more during any rolling 365 day period, and not used as a ‘main residence’.

Consultations

Following an initial consultation last year, proposals were published in January that would see councils empowered to regulated short-lets more easily, should they decide it is in the interests of their local community.

Scotland is now consulting on the final version of these proposals, which will enable councils to licence short-lets as well as introducing control areas where planning permission will be required to change whole properties into Airbnb rentals to manage short-lets densities.

Also, the Scottish government intends to ensure Airbnb hosts and landlords pay tax on their earnings in a way that makes an ‘appropriate contribution to local communities’.

“I believe our proposals for a licensing scheme and short-term let control areas set out in this paper are evidence-based and right for Scottish circumstances,” says housing minister Kevin Stewart (pictured, above)

“Short-term lets have become the subject of much controversy in some parts of Scotland and evoke strong opinions.”

Read more about Airbnb.

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Lincoln Licensed Deathtraps

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This story concerns two slum-like death trap HMOs which had both been granted recent HMO Licences by Lincoln City Council and condemned as unsafe for habitation by an independent expert.

One such HMO Licence was granted as recently as January 2020 and even after inspection by one of Lincoln City Council’s supposedly expert Housing Officers

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