BREAKING: Home Office warned of impending failure of Right to Rent checks system

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Letting agents have written to the Home Office this morning to warn that its controversial Right to Rent scheme is likely to face ‘widespread failure in compliance’ once the Covid pandemic ends.

ARLA Propertymark, which represents some 8,000 estate agents around the UK, has taken issue with the government’s temporary ‘adjusted checks’ system for Right to Rent during Covid.

This has enabled agents and landlords to complete checks without having to meet tenants in person.

But this temporary measure is now eight months old and therefore ARLA says hundreds of thousands of tenancies have been secured using this system.

But the government’s Covid regulations stipulate that once the pandemic is over, these tenants will have to be re-checked for their Right to Rent within eights weeks.

“Recent sampling of our members has shown that almost all Right to Rent checks in that period have been carried out using the adjusted check method, in order to comply with public health guidance,” the letter days.

“Given the volume of checks that will now have built up, the majority of letting agents and landlords will undoubtedly fail to comply with the requirement to deliver retrospective checks.”

Digital storage

ARLA says tenants are unlikely to appreciate being checked twice and are less likely to co-operate second time around, and that the need to check twice will cause a huge bureaucratic and digital storage problem for landlords and agents.

This, the organisations claims, will be on top of the huge expansion of the Right to Rent scheme which from next month onwards will include EU citizens who have not yet applied for Settled Status.

“In this context, and with the time that has now lapsed since the introduction of adjusted checks, it is essential that the Home Office moves to accept adjusted Right to Rent checks on tenancies that started during the period under which the public health crisis requires minimal face to face dealings,” says Timothy Douglas, Policy & Campaigns Manager at Propertymark (pictured).

“I ask that you consider the benefits to tenants, landlords and letting agents of removing the need for retrospective, duplicate checks in order to ensure that landlords and letting agents can meet their legal requirements and support moves to the new points based immigration system through the first half of 2021.”

Read more news about the Right to Rent checks.
More advice on Right to Rent compliance.

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Social Housing reforms to speed up complaints procedure for residents

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Major reforms to support housing tenants in England and ensure social landlords raise standards where needed have been announced by the Housing Secretary Robert Jenrick.

The social housing white paper ‘The Charter for Social Housing Residents’, sets out reforms that will speed up the complaints procedure for residents by improving access to the Housing Ombudsman

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Substantial rent arrears cases are now exempt from eviction ban

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From today (17 November 2020), possession cases with severe rent arrears will be exempt from the ban on evictions, meaning bailiffs and High Court Enforcement Officers can move to enforce warrants and complete evictions. However, this will only apply to cases where the equivalent of nine months’ rent arrears had accrued prior to the 23rd March 2020

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BREAKING: Existing evictions to be given green light if more than nine months’ rent arrears

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The government has finally laid its updated lockdown regulations in front of parliament to clarify when landlords with existing possession orders can move to evict, revealing that one of the exemptions will be ‘substantial’ rent arrears, now to be classed as those over nine months.

As expected these regulations, which will come into force tomorrow and only relate to England, enable bailiffs to attend properties to execute a warrant of possession if it concerns trespassers, the death of a tenant, an unoccupied property and tenants involved in anti-social behaviour or, crucially, those who have built up substantial rent arrears.

It is this last point that many landlords and solicitors have been waiting for clarification on; how long can a tenant have not paid their rent before an existing possession order can proceed during the lockdown.

18 months’ wait

This may seem trivial when the lockdown is only a month long, but the way the law has been framed, landlords given the go-ahead to evict will now have been waiting at least 17/18 months before being able to deal with a tenant with substantial rent arrears.

This is because the eviction ban exemption only kicks in after nine or more months of unpaid rent, but any arrears accrued after March 23th are ignored – so another eight months on top of non-payment before an existing possession order can then proceed.

Today’s new regulations follow a sustained campaign by the industry to seek clarification, as well as efforts by leading PRS lawyer David Smith (pictured) who says his effort to point out that the the government ‘requesting’ bailiffs do not enforce legal evictions was in itself likely to be unlawful.

“This is a matter for Parliament and who gets evicted should not be at the whim of the Lord Chancellor,” he says.

Unfair

Ben Beadle, Chief Executive of the National Residential Landlords Association, says: “In trying to arrive at a compromise the Government has failed to help those in genuine need whilst rewarding those whose arrears have nothing to do with the pandemic, and in some cases are wilfully not paying their rent.

“This is doing nothing to help those tenants who are trying to do the right thing and seeking to pay off their debts.

“Instead of prolonging the problem with short-term fixes, the Government needs to urgently bring in a financial package to enable tenants to pay off rent arrears.”

Read the new regulation in full.

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Help for struggling tenants, Minister? Over to you, landlords!

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The government has indicated in a written parliamentary statement that it expects private landlords to shoulder the financial burden of helping students during the current lockdown in England.

Asked by Labour MP Zara Sultana if the government would offer students any financial support, Education minister Michelle Donelan (pictured) retorted that those in higher education can access hardship funds at their college or university but that otherwise students and landlords were on their own.

But these hardship funds are limited – for the 1.9 million students studying in England  there is a hardship fund of £135 per student or £256 million in total.

Donelan told Sultana that, if they are unable to access hardship funds, then students should agree a payment plan with their private landlord, and urged PBSA providers and universities to waive rents or release students from their contracts, as ‘many did during the Summer term lockdown’.

“We encourage landlords, letting agencies and tenants to adopt a pragmatic, common-sense approach to issues that may arise in the current circumstances,” said Donelan.

“In the first instance, a student should speak to their landlord if they think they will have difficulty meeting a rental payment. In this unique context, tenants and landlords are encouraged to work together to put in place a rent payment scheme.”

The Minister’s comments echoed those of NUS President Larissa Kennedy, who last week called on landlords to give student a rent holiday during the current lockdown if they are struggling to pay their rent or told to return home.

Back in April the NRLA wrote to the NUS during the first lockdown to point out that if landlords no longer felt student rentals were a secure form of income, the supply of properties would dwindle and rents would rise.

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Council told tenants to wait for court eviction?

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“You don’t have to leave the property when the notice period expires. You still have a legal right to occupy the property after this date and until your landlord obtains a possession order from the court. If you haven’t found alternative accommodation by the time your notice period expires

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Unfair Garage Rent Payment?

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I own a flat which has two leases. One for the flat itself, which is broadly fair and one for a garage, which is unfair and has to be taken on when the property is purchased and stays with the flat lease.

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The Private Rented Sector and buy-to-let remain resilient

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With private rents in Britain’s biggest cities falling by as much as 15% and with up to 50% of tenants now claiming housing benefit, one would have thought this new economic reality would have had a big impact on the buy-to-let market.

Not so according to DJ Alexander, CEO of Apropos, a UK-wide letting firm which finds that the “attitudes and actions of landlords and tenants” have remained stable compared to the same period last year.

This year, in the ten months to the end of October, the firm saw 103 of its landlords serving notice on tenants compared to 107 in 2019, plus the number serving notice has fallen substantially since the ending of the first lockdown in July, a drop of 20, from 60 in 2019 to 40 this year.

The number of tenants serving notice on landlords has also fallen. Apropos figures show a drop of 18% since the end of the first lockdown. From July 2020 to October the figures were 741 this year compared to 875 over the same period last year.

However, this increase in tenant stability means that the number of new tenancies started by Apropos has been lower, a drop from 850 to 695 over the last four months.

David Alexander, joint Chief Executive Officer of apropos by DJ Alexander, says:

“These figures highlight a much greater stability and resilience in the PRS than might have been expected following the first lockdown. Both landlords and tenants have shown a much greater belief and enthusiasm for remaining within the sector.

“Landlords have been serving fewer notices and tenants have been happier to remain where they are rather than undertake the uncertainty of seeking a new home. There is little doubt that the pandemic has made people focus more on their homes and their living space. Where people live has become so much more important since the lockdown so that once people find a good home, they want to stay.

“The result has been many more people staying put. It is incumbent upon everyone in the PRS – landlords, tenants and agents – to ensure that homes are maintained to the highest standard so that individuals can feel safe and secure. Security of tenure has rarely been more prized, and many more tenants and landlords seem to hold this view and are staying where they are rather than moving on. Stability is a vital element in the housing market and these figures show just how important it has become in the last six months.”

Mr Alexander concluded:

“Landlords and tenants are continuing to show faith in the PRS. Given that England has now entered its second national lockdown it is essential that the Westminster government shows continued faith in the sector by ensuring that landlords are provided with financial support to continue providing homes for millions of people. Failing to financially support this vital sector at this time would be disastrous for landlords and tenants.”

Commenting on rumours that the chancellor, Rishi Sunak, is being urged to double capital gains tax rates while reducing the exemption limit Mr Alexander said it has triggered fears that buy-to-let landlords, investors, those with second homes, and small business owners could face significantly higher tax bills. He commented:

“The OTS (Office of Tax Simplification) review of CGT (Capital Gains Tax) suggesting a huge increase in the rate of taxation for landlords, second home owners and investors would have an enormously detrimental impact on the housing market.”

If the Chancellor targets the private rented sector it will be an “extremely risky” strategy, putting at risk the future of the second largest provider of homes in the UK. It would not be possible to fill this gap if there was a mass exodus of landlords and investors from the market over a short period, according to Alexander.

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LIVE interview with David Smith on proposed legal action against Lockdown evictions 10am Tuesday 17th

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A judicial review into the inability to evict non-paying tenants during lockdown is being launched by David Smith of JMW Solicitors. This tenant eviction ban during lockdown is causing many smaller landlords serious hardship.

In this Property Investors Coffee Morning special

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BREAKING: Half of all families living within the PRS are in receipt of housing benefit

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Latest government figures show that half of all the families who live within the private rented sector now receive support from the government either via housing benefit or Universal Credit (UC) to pay their landlord.

DWP figures show that 910,000 families are now in the position, an increase of 23% since the Covid pandemic arrived in the UK.

Tenant lobbying group Generation Rent says that a fifth of these families live in more expensive properties that fall outside the Local Housing Allowance system, which only pays out based on the cheapest 30% of homes in any area. This means 378,000 families face a rent shortfall and are having to cut down on essentials or get into debt to make up the difference.

Also, many families will not get the full LHA because of the benefit cap, which places an upper limit on the amount that working age claimants who are out of work can receive.

Generation Rent says that, although many UC claimants have been exempt from the benefit cap, this exception is due to expire just before Christmas.

The group is calling on Sunak to commit more support to private renters by raising Local Housing Allowance, scrapping the benefit cap, and clearing rent arrears brought about by the pandemic.

“With so many private renters now reliant on it, the Government must ensure the benefits system covers housing costs,” Alicia Kennedy (pictured), Director of Generation Rent, told inews.

“Everyone deserves the security of a home they can afford while we recover from the economic impact of coronavirus.”

Read more about Universal Credit and landlords.

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