Shelter rips into landlords over millions spent by councils on housing homeless in PRS

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Local councils paid private landlords, letting agents and companies 87% of their temporary accommodation budget for homeless households in 2019/20.

New Government figures show that councils spent almost £1.2 billion providing temporary accommodation for these households between April 2019 and March 2020 – up by 9% in the last year and 55% in the last five years.

The amount paid to landlords and agents has risen by 66% in the last five years from £621 million in 2014/15 to £1 billion in 2019/20. 

Shelter points out that more than a third (38%) of the money paid to landlords and agents was spent on emergency B&Bs – £393 million; spending on emergency B&Bs has increased by 73% in five years.  

Chief executive Polly Neate (below) believes the decades of failure to build social homes means too many people on lower incomes are stuck in unstable private rentals – increasing their chances of becoming homeless. 

She says: “It is outrageous that almost £1.2 billion a year is spent on often shoddy and expensive temporary accommodation because of the lack of social homes. 

“It’s a false economy for taxpayers’ money to be used to pay private landlords for grotty emergency B&Bs, which can be so terrible to live in that families end up deeply traumatised.” 

The National Residential Landlords Association (NRLA) agrees that there’s a pressing need for more social housing and says it recognises the importance of tenants feeling secure in their properties.

A spokesman tells LandlordZONE: “We would encourage all councils to work positively with private landlords in their areas to develop schemes to support those at risk of homelessness to access long term homes for rent.

This would be much cheaper than emergency accommodation and provide security to both the tenant and the landlord.” 

Shelter wants the Government to invest £12 billion over the next two years to build an extra 144,000 lower-cost homes. 

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Landlord duo fined £110,500 for running three dangerous and overcrowded HMOs

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A duo in London have been given the highest Landlord fine to date this year following an investigation by Islington council into three HMO properties.

Midlands-based landlord Arun Bajaj, 60, has been fined £100,000 with £20,000 costs while co-defendant Antonio Ferraiuolo has been £10,500 following a trial in August.

Bajaj was found guilty of 15 offences at two properties on Seven Sisters Road and a third on Grosvenor Avenue (pictured), all of which his family owned.

Ferraiuolo, 57, from North London was found guilty of 35 offences after he was found to have sub-let the Grosvenor Avenue property off Bajaj and filled it with 35 tenants. He also managed the two other properties for Bajaj.

All the offences were breaches of the Management of Houses in Multiple Occupation Regulations after tenants were found to be at risk from serious fire safety hazards, overcrowding and disrepair.  

Overcrowding

At the converted Victorian house on Grosvenor Avenue, council officers found dozens of people living in three two-bedroom flats, with up to five or six people having to sleep in the same rooms.        

The building was found to have no working fire alarm system, new room partitions that were not fire resistant, and fire risks including dangerous electrics. 

Occupants of the property did not have tenancy agreements, and paid rent in cash.

The council became aware of the property after neighbours complained about anti-social behaviour, and officers later discovered the link to the two other HMOs.

During sentencing, Judge Clark QC said Bajaj had turned a blind eye to the situation at all three properties, but that Ferraiuolo had been ‘calculatedly criminal’.

Read more about Islington Council.

Find out more about HMO tenancy agreements.

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Landlords and tenants should make contingency plans together for winter

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After the first national lockdown period, the restrictions on moving homes in England were removed in May 2020, but what impact did the temporary emergency rules on moving into a new house have on renters?

According to new research by Ome

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Landlords, ignore planning laws at your peril…

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Waltham Forest Council has brought two successful prosecutions against landlords over their flouting of planning laws.

Landlords Mr and Mrs Khilji and company director Mohammed Raja Iqbal have been prosecuted by the council and heavily fined for making changes to their properties without proper planning applications and consent, and refusing to re-instate when they were caught out.

Mr and Mrs Khilji of Sylvester Road, Walthamstow refused to revert a property they converted into flats back to its original configuration, despite warnings, and were eventually brought to court over the matter.

The Khiljis were found guilty of illegally converting a property on Rochdale Road, Leyton into two self-contained flats. Plus they failed to comply with an enforcement notice which required them to return the property to its original structure.

They pleaded guilty at the Thames Magistrates Court, following which the case was referred to Snaresbrook Crown Court for sentencing. Whereupon a combined sum of £421,837.89 was awarded for fines and prosecution costs in two cases under the Proceeds of Crime Act, the sum representing the profit from the committed crimes.

In a separate case, the Council Planning Enforcement Team investigated Iqbal, a landlord and a director of Premier Home Investments Ltd, a property company based on Hoe Street, Walthamstow.

Iqbal failed to comply with a planning enforcement notice relating to 65 St James’s Street, Walthamstow, where he had built, without planning permission, a three-story extension, and had converted the upper floor of the house into separate flats.

Iqbal was prosecuted at Snaresbrook Crown Court after failing to demolish the extension and reinstate the original two-story structure following the issue of an enforcement order.

He was ordered to pay confiscation proceeds in the sum of £261,837.89 or face two years’ imprisonment in default of payment. Costs were also awarded in the amount of £27,174 and a fine of £20,000 was handed down.

Cllr Clyde Loakes, Deputy Leader and Cabinet Member for the Environment at Waltham Forest Council, commented:

“People who flout planning rules for their own financial gain need to understand that we will take necessary enforcement action.

“We will consider action under Proceeds of Crime Act whenever appropriate so that we take away the financial benefit of this criminal activity.”

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Will it happen again? 31% fewer private renters moved during lockdown months

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New tenancies fell by a third during lockdown according to new research by Ome, which has warned landlords and letting agents that a second wave of the pandemic could have a similar effect.

Using data from Government-approved deposit protection scheme mydeposits, it reveals that in the three-month period from March to May, 61,972 new tenancies were protected compared with the same period in 2019 which saw 81,055 new tenancies protected – a 31% drop.

The Coronavirus restrictions regulations were published on 26th March, stating that, ‘during the emergency period, no person may leave the place where they are living without reasonable excuse’. This meant that from the end of March, moving home was prohibited for many, and limits weren’t relaxed again until 18th May.

Ome co-founder Matthew Hooker (left) says that as we head into what looks like a second wave of the COVID-19 pandemic, it’s important to reflect and learn from the initial spring period when the rental sector wasn’t immune from having to adapt to unprecedented changes.

“We now know far more about the virus and its wider impact on society and the economy than we did at first, however there is still likely to be a significant period of uncertainty and flexibility required for landlords, agents and their tenants,” says Hooker.

“We’d therefore urge tenants and landlords to start making contingency plans together for the winter just in ce the virus rears its head again over the festive period.”      

Visit the Ome website.

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Citizens advice calling for tenant loans and grants in tiers 2 and 3

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Citizens Advice is reporting on a series of gaps in protections in England that do not align with the coronavirus lockdown tiers and that in some areas, particularly rent and council tax, the lack of broad national protections could see people at risk of falling behind on vital bills.

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ONS UK House Price Index for August 2020 up 0.7%

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The office for National Statistics has released the UK House Price Index summary for August 2020 showing the average price of a property in the UK was now £239,196 reflecting an annual increase of 2.5% and a monthly increase for August of 0.7%

At the individual country level

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Landlords: please change your minds on pets, says friend of man who took his life after being refused

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The best friend of John Chadwick, who took his own life after being separated from his pets while being rehomed, is calling on landlords to be more accommodating when considering tenants with dogs and cats.

Dee Bonett has been campaigning for a change in the law since his death in 2017 and helped persuade Maidstone Council to allow homeless people to take pets with them into emergency accommodation.

In August, the borough went a step further by introducing a 12-month pilot scheme allowing those in emergency accommodation to refuse an offer of permanent accommodation if it doesn’t take pets.

And MP Andrew Rosindell mentioned John’s story in his speech in the Commons last week when launching the Dogs and Domestic Animals (Accommodation and Protection) Bill, which aims to give tenants the right to live with their pet – provided they can prove they are responsible and caring, with conditions including that owners pass the test of responsible ownership.

Dogs and cat

John was evicted from his home in Maidstone after his landlord decided to sell the property, so had to give up his dogs Theo and Tinkerbell and cat Gizmo as he wasn’t able to take the pets into temporary accommodation at a bed and breakfast.

He was also told he wouldn’t be allowed to take them into permanent accommodation offered by the council. Ten days later John sent a text message to friends saying he no longer wished to be alive before taking his own life.

At the inquest, the coroner said the loss of his animals was a key factor in this decision.

Dee started a petition to encourage more positive pet policies on change.org in 2017 which has more than 17,000 signatures and hopes this Bill will encourage other local councils to study their policies on pets.

She tells LandlordZONE: “I know that not every landlord is an animal lover but there’s no evidence to suggest that pets cause more damage than children. I’m optimistic that this Bill will create change – I don’t want to see a tragedy like this happening again.”

The Bill gets its second reading on 29^th January.

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Capital appreciation covering the costs of running a property

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Research from GetAgent.co.uk has found that nearly half of all properties pay for themselves when it comes to the average annual cost of upkeep and the increase in capital appreciation.

GetAgent.co.uk looked at each local authority in England and the total current upkeep costs of a property on an annual basis

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