UK’s largest ever HMO licencing scheme to begin on Monday

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The UK’s largest additional licensing scheme for HMO properties is due to start in London over the Bank Holiday weekend covering some 9,000 properties.

Like many other local authorities in London and beyond, Westminster Council has moved to include HMOs of all sizes across the borough rather than just less common larger ones.

This means that from 30^th August onwards landlords and letting agents operating HMO properties with three or more people who are not from one household with shared facilities will need to obtain a licence for the property.

From that date onwards, the number of HMOs requiring a licence is expected to jump from 300 to approximately 9,000.

Fees for the scheme are pricey by UK standards – landlords and letting agents must pay a £705 fee on application for the five-year-long scheme and a further £270 once the application has been approved, or £795 in total.

Accreditation discount

A discount of 10% is available for landlords who are accredited with the London Landlord Accreditation Scheme.

A higher fee is charged for properties within what Westminster classes as Section 257 HMOs. These are buildings that have been converted into flats where more than a third of the flats are rented out, or if the building does not comply with the 1991 Building Regulations or later regulations that applied if the building was converted after 1 June 1992.

The council wants to ensure those licensing a property realise that it must be the ‘person having control’ of the property which is normally whoever receives the rent.

This has caused confusion in the past, and led some letting agencies to believe that it is the landlord, and not they who must obtain an HMO licence.

Landlords can expect to be reported by tenants if they don’t have a licence – Westminster launched an online ‘snooping tool’ a year ago.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – UK’s largest ever HMO licencing scheme to begin on Monday | LandlordZONE.

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LATEST: Student property yields 13% to 18% above rest of market – claim

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Student property has consistently out-performed the rest of the PRS, latest research by lender Paragon Bank has revealed.

It shows that over the past five years student properties have delivered a mean gross yield in England of between 6.15% and 6.6% whereas the overall rental market has varied from 5.43% and 5.6%. This is between 13.2% and 17.86% higher than general PRS market.

Paragon’s report also says that the better yields offered by renting to students were the key reason why most landlords choose to cater for the graduate market.

Also, the returns are even better within towns and cities serving smaller universities.

For example, gross yields in Swansea’s private residential student market deliver a gross yield of 9.54%, the highest in the UK, followed by Hull (8.26%), Liverpool (8.25%) and Stoke (8.21%).

Smaller towns

The report also says one reason for smaller towns and cities faring particularly well could be they have a lower proportion of purpose-built student accommodation, which has become more commonplace in major cities.

Places such as Salford and Huddersfield – where yields of 7.53% and 7.40% can be achieved respectively – are both smaller locations where more traditional accommodation is found, such as houses in multiple occupation and property is generally more affordable to purchase, helping to generate better returns.

Despite these above-average yields, student accommodation remains a relatively niche markets, with just 13% of all England’s landlords involved in the sector.

“Landlords who adapt their proposition to cater to this niche can be rewarded with healthy and growing demand, the stability of parental rent guarantors and the ability to achieve attractive yields,” says Paragon Bank’s mortgages chief Richard Rowntree (pictured).

Read the report in full.
Read: The ultimate guide to student rental properties.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Student property yields 13% to 18% above rest of market – claim | LandlordZONE.

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Editor’s blog: Why are rogue tenants not held to account the same way landlords are?

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LandlordZONE has published hundreds of stories in recent years about efforts across the sector to reign-in rogue landlords.

They are a small group who, even the government admits, compromises at most 10,000 people or 0.4% of the UK’s 2.6 million landlords.

But they generate a disproportionate number of headlines in comparison with their size, usually when they are found to be running illegal HMOs, contravening selective licensing regulations or being fined for dangerous or substandard properties.

Looking at the LandlordZONE forums, emails from our readers and the comments below our articles about these cases, it’s clear some landlords feel frustrated that good operators rarely get much publicity in the media.

They also feel that the National Residential Landlords Association (NRLA), and other property industry trade associations, expend too much effort laying into this minority of rogue landlords and too little targeting the ‘nightmare tenants’ who wilfully damage properties, avoid paying rent or run circles around the evictions process.

Or in some cases all three – as we often highlight including, earlier this summer, the case of Lilyana Markova.

After all, the government has set up a national rogue landlord database and is also planning to bring in a landlord redress scheme to enable tenants to gain compensation or action when their landlord falls short of minimum standards.

But what about a rogue tenants database for the sizeable community criminal renters and fraudsters who prowl the PRS, many landlords ask.

As reader Gtim put it recently: “Why is the NRLA not pushing for a more balanced legislative changes; how about a national tenant register to stop rogue tenants from moving from house to house leaving a trail of destruction whilst living cost free.”

Tackled urgently

I put these points to the NRLA. It’s spokesperson has told me in response, that: “Criminal and rogue tenants need to be tackled just as urgently as criminal and rogue landlords and our plans deal with this.

“The NRLA team works day-in-day-out to assist landlords in dealing with challenging tenants, and the harm that they can cause.

“That is why throughout the pandemic we have worked strenuously to ensure that enforcement action could still be taken against anti-social tenants. 

“Our proposals for the forthcoming rental reform white paper include calls for an enhanced set of rights and practical tools for landlords to resolve disputes and legitimately repossess properties, as well as improvements to the court system to ensure possession cases can be heard more swiftly and effectively than at present.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Editor’s blog: Why are rogue tenants not held to account the same way landlords are? | LandlordZONE.

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Changes requiring face to face Right to Rent checks deferred to 05/04/2022

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The end date for the temporary adjusted checks has now been deferred to 5 April 2022 (inclusive). We have made the decision to defer the date following the positive feedback we received about the ability to conduct checks remotely. We initiated a review of the availability of specialist technology to support a system of digital right to rent checks in the future.

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BREAKING: Welsh Ministers agree to extend commercial tenancy eviction moratorium

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The Coronavirus Act 2020 granted Welsh Ministers emergency powers to handle the COVID-19 pandemic independently, but this decision brings Wales in-line with England on the changes to the commercial tenancy eviction moratorium.

The Act introduced provisions that a right of re-entry or forfeiture, under a relevant business tenancy, for non-payment of rent, may not be enforced during the moratorium period, now extended until March 2022.

The moratorium provides protection from eviction for commercial tenants in rent arrears and is introduced in order to limit the impact on businesses from the series of lockdowns and trading restrictions imposed on the Welsh economy, as in England, throughout the pandemic.

The UK Government announced an intention to introduce legislation soon which will “ring-fence” commercial rent debt accrued during the pandemic. The idea is that instead of immediately resorting to eviction proceedings, landlords and tenants of business tenancies will be forced to negotiate, falling back on a system of binding arbitration, when agreement between tenants and landlords cannot be reached.

The UK Government recently announced its intention to extended the moratorium in England to 25 March 2022, which gives time for UK Parliament to pass the necessary primary legislation.

The restrictions on the use of commercial rent arrears recovery (CRAR) so that, from the 24 June 2021, the minimum net unpaid rent that must be outstanding before CRAR can be used is 554 days.

The Welsh government’s decision therefore will give the same levels of protection in respect of all these matters for Welsh businesses as those in England, and “will assist with the recovery of Welsh businesses as the economy improves.”

“It will also provide the Welsh Government with what is believed to be sufficient time to continue to work in considering and then where necessary, implementing measures in relation to commercial rent arrears accumulated during the pandemic in Wales. It is expected that this will include working with the UK Government in the further consideration and development of their proposals,” a Welsh government publication by Vaughan Gething MS, Minister for Economy, states.

The 26 August announcement emphasises that the protection provided by section 82 of the Act during the “relevant period” does not remove the requirement to pay rent, and “I am clear that, wherever possible, tenants should of course pay rent,” says the minister.

“This statement is being issued during the Welsh government recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Senedd returns I would be happy to do so,” the minister says.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Welsh Ministers agree to extend commercial tenancy eviction moratorium | LandlordZONE.

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New Article 4’s are coming – What you need to know

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New article 4’s are coming! Act fast to seize opportunities before the door closes on you. Linda and I break down everything you need to know following a review of statements from over 30 councils!

We talk about the new regulations being put in place and how we feel the councils do not understand the new National Planning Policy Framework 2021 policy for new Article 4’s and what you need to know in this situation.

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