We’ll sell your property portfolios in 7 days for 85% – 95% of the value so you can cash in and retire

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For many landlords, this year has been the year of the “cash in and retire” strategy. And with house prices sky-high, it makes sense. That coupled with the fact that the market won’t be this high again for another 7 years

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A step in the right direction for residential landlords

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A gradual return to normality looks hopeful for landlords and letting agents as the Section 21 notice period moves back from its temporary Covid extended period of 6 months to is normal 2 months on 1 October.

Desperate times called for desperate measures

When Parliament shut down for a month in March last year to combat the spread of coronavirus, one of its last acts in the final session, it passed through the Coronavirus Bill. The Coronavirus Act 2020 saw all notice periods for residential tenancies extended to six months for most grounds (including Section 21 notices), with exemptions only for certain serious cases.

So now, an important stage in the pandemic is being reached as we (hopefully) move towards post-Covid normality. This is happening for residential landlords, with the news that the notice periods they need to give to tenants to take back possession of their properties will revert to pre-pandemic lengths on October 1.

Rent arrears could soar

The good news is tinged with some anguish for landlords as furlough comes to an end, and those with benefit tenants, as their rent debts could soar when the soon to be removed £20 premium on Universal Credit payments hits. An in future , evictions could become much more difficult as on the horizon is the Government’s promise to remove the – much valued by residential landlords – Section 21* (no fault) eviction process.

Although the notice period was reduced to four months for most circumstances on the 1^st of June this year, and a further reduction to two months on August 1, where there was less than four months of unpaid rent, it will come as a relief to all residential landlords as the notices revert to normal after the end of September.

All Section 21 notices will then be for 2 months and also for Section 8 notices with periods of between two weeks and two months for reasons varying depending on such grounds such as serious rent arrears, persistent late payment of rent, breach of Right to Rent regulations, mortgage repossession and under Ground 1, the landlord wanting to move back in to was originally their main residence.

We are not out of the wood yet!

Should the Covid-19 pandemic worsen as we enter the Winter period the government has indicated that further restrictions could be imposed, this by recently tabling legislation giving it the powers to revert back to longer notice periods.

The extended periods have given tenants a welcome period of security if they were struggling financially, with landlords and letting agents often helping out where they could with rent reductions and rent holidays, but it does not alter the fact that arrears are arrears which legally are still due.

And for every tenant in genuine difficulty there will always be a small minority, as is the case with commercial tenancies, who take advantage of the legislation and refuse to pay rent even though they could. Although theoretically the courts are still available to resolve these issues, there are long delays and the expense involved is a “bit of a gamble” given that the outcomes would be uncertain.

Meanwhile the rent debt crisis looms

According to debt charity StepChange around half a million private tenants are now in serious levels of debt, with in total around £360 million outstanding in rent arrears across the UK. Their research shows that private tenants are on average around £800 in arrears with their rent payments.

The charity has argued, along with some landlords, that the planned removal of the temporary £20-per-week uplift to Universal Credit compounds tenants’ difficulties and arrears likely to soar..

A 61 years old tenant used as an example by the charity is £2,000-worth in arrears:

“I have recently managed to get some help from the council regarding my rent and am just about managing to pay it in full, but I’m still not really able to pay anything towards the arrears,” the tenant told StepChange.

“Luckily [says stepChange] the landlord seems fine with this at the moment, but obviously that could change at any time.”

One in ten could face eviction

The charity is predicting that around 10 per cent of all residential tenants in the UK – and these are in-work tenants, – are in fear of being evicted over the next 12 months.

Phil Andrew, chief executive of StepChange speaking to the PA News Agency, says:

“Covid support schemes, while a lifeline for many, haven’t been able to help renters address their arrears and with cuts to Universal Credit and the end of furlough imminent, there is a real danger of thousands losing their homes.”

A support lifeline is called for

StepChange is now calling for dedicated financial support to help ensure renters can safely wind down Covid rent debts and keep their homes.

“By establishing a dedicated rent debt fund, and by scrapping the planned Universal Credit cut, the Government can avert the threat of a rise in evictions, problem debt and homelessness that will compound financial and social problems and hamper economic recovery,” Phil Andrew suggests.

Chris Norris, policy director for the National Residential Landlords Association speaking to the PA News Agency, said:

“Many tenants and landlords have struggled throughout the pandemic.

“The end of furlough combined with cuts to benefits creates a perfect storm as those affected face the prospect of rent arrears getting worse.

“These are debts that landlords cannot afford to sustain indefinitely. The Chancellor needs urgently to follow the examples set in Scotland and Wales and come forward with transitional support to get Covid-related arrears paid off.”

A spokesperson from the Ministry of Housing, Communities and Local Government (MHCLG) had said:

“Our £352 billion support package has helped renters throughout the pandemic and prevented a build-up of rent arrears.

“We also took unprecedented action to help keep people in their homes by extending notice periods and pausing evictions at the height of the pandemic.

“As the economy reopens it is right that these measures are now being lifted. We will bring forward further proposals in due course to create a fairer and more effective private rental sector that works for both landlords and tenants, including the abolition of Section 21 ‘no fault’ evictions and further support for landlords where repossession is necessary.”

Keeping landlords onboard

If landlords are to be encouraged to stay in the sector and provide much needed rental accommodation, especially as house prices continue to soar, then the government must come up with a sensible and workable system of not only supporting tenants in need but enabling landlords to recover debt and quickly remove delinquent tenants.

*The Government has committed to abolish ‘no-fault’ section 21 evictions in the private rented sector. A Renters’ Reform Bill was promised in the 2019 Queen’s Speech to achieve this.

The Section 21 process introduced under the Thatcher Government by the 1988 Housing Act and credited with much of the impetus behind the growth of Buy to Let, enables private landlords to repossess their properties from assured shorthold tenants (ASTs) without having to establish fault on the part of the tenant. Hence it is sometimes referred to as the ‘no-fault’ ground for eviction.

However, private tenants, their representative bodies, and homelessness charities working in the sector have argued for some time that the ability of landlords to terminate an AST at short notice has a detrimental effect on tenants’ wellbeing. The current Conservative Government it seems has been swayed by their arguments.

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Evicting a rogue tenant during the pandemic ‘cost £35,000’ – claim

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The cost of the evictions moratorium for thousands of landlords during the pandemic have been laid bare.

Largely due to the loss of rent during the average 51-week, eviction costs when ejecting rogue tenants rose to £35,000 from £11,820 new research shows.

Letting agency Benham & Reeves says the costs and time required to remove an uncooperative tenant who refused to negotiate or communicate and who damaged the property were lengthened significantly by the temporary Covid eviction restrictions introduced by the government.

The company says this includes a 10-week delay caused by the disruption caused to the court system during the pandemic.

shocking

“The situation for landlords throughout the pandemic has been shocking and while eviction notice periods have now been reduced to four months, many continue to lose thousands in rental income every month due to rogue tenants and the long delays suffered while trying to evict them,” says Marc von Grunherr, a director of Benham & Reeves (pictured, below). 

“We’re talking about professional crooks who have taken severe advantage of legislation designed to support those who are actually suffering financially and are in need of support.

“We had one particular case where a tenant moved into a new property at Television Centre [in Shepherds Bush, London) in October 2019 and only ever paid the first month’s rent and nothing thereafter.

“The eviction hearing was on 30th March this year and we couldn’t get a bailiff appointment until 25th August 2021.  The poor owner suffered a loss of over £50,000 plus to add salt to the wounds the tenant stole all the landlord’s furniture.”

The research, which is based on average repair costs, rents and legal fees, reveals London to have the highest eviction costs during Covid (£45,574) and the North East the lowest (£30,290).

Get help evicting a tenant.

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Renamed – The Department for Levelling Up, Housing and Communities

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Where is the mention of Housing and the Housing Market as a priority?

The Ministry of Housing, Communities and Local Government has now been catchily renamed the Department for Levelling Up, Housing and Communities as the Government with former Bank of England Chief Economist

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Cautionary tale to include fire cover clause in AST!

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We own a small bungalow that we rent out via an agent. We picked a local agent as the property is too far away from our home and neither of us has the specialist knowledge to self manage.

Over the Bank Holiday

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Letting agent jailed for three years for ripping off landlords and failing to protect deposits

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An aggressive and threatening estate agent has been jailed for three years after cheating tenants and landlords out of £182,000.

Lee Clarke, who set up Berkshire Estate Agents in Slough, spent more than five years collecting rent and failing to pass it on, defrauding 31 clients.

He admitted 17 counts of fraud by false representation at Reading Crown Court, along with one count of Section 993 of the Companies Act 2006, to carry on the business of a company with intent to defraud creditors or for other fraudulent purpose.

Clarke, 42, of Park Corner, Windsor, has also been disqualified from being a director of any company for six years.

Crimes

DC Luke Simms, of Thames Valley Police, says the crimes took place while Clarke ran the agency in Windsor Road, Slough, between September 2013 and December 2018 – although no-one else at the firm was involved.

“Clarke knowingly collected rent from tenants but then deliberately chose not to pass on this rent to landlords,” says DC Simms.

“He also deceived his clients by failing to protect deposits collected from tenants as part of a deposit protection scheme.”

After landlords and tenants complained to Slough Trading Standards, a joint investigation uncovered the impact of Clarke’s crimes, with many of his victims describing him as someone who was aggressive and threatening after they made complaints.

“The sentence will be a relief to many of the victims in this case and should provide reassurance to the public and community of Slough that those who commit fraudulent crimes using a business will be brought to justice,” adds Simms.

Warning

Peter Adshead, principal Trading Standards officer for Slough Borough Council, says: “We hope this sentence will remind business owners that failure to comply with legislation will be investigated and brought before the courts where necessary. Landlords and tenants expect their money to be legally protected and monies handed over promptly.”

Read more: Trading Standards begins crack down on London agents who fail to protect landlord cash.

Guidance: Understanding security deposits.

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LATEST: Housing ministry is renamed and given major ‘levelling up’ role

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The government department that regulates and oversees landlords and the private rented sector has been renamed and given a new ‘levelling up’ focus.

Formerly the Ministry of Housing, Communities and Local Government, it will be now known as the Department of Levelling Up, Housing and Communities (DLUHC).

This decision follows the sacking of its Minister of State Robert Jenrick last week and the arrival of his replacement, Michael Gove, and a new ‘levelling up’ junior minister, Kemi Badenoch.

The change has clearly been made at pace – the organisation’s website and other online collateral remains with the old name at the time of writing – and most consider it to be a demotion in status from ministry to department.

But its Twitter account, which is followed by some 120,000 people, has changed – but now makes no mention of housing.

2nd renaming

The renaming, which was announced yesterday, follows a previous re-naming in 2018 by Theresa May, from the Department for Communities and Local Government to the Ministry of Housing, Communities and Local Government.

At the time, May’s government said this was to highlight her determination to sold the housing crisis, so given the ongoing battles in many policy areas including cladding, leasehold, planning and house building, the new focus is puzzling.

The Conservative government is now pressing hard on levelling up; over the weekend Boris Johnson appointed former Bank of England Chief Economist Andy Haldane to head up a new Levelling Up Taskforce.

This has been jointly established by the Prime Minister and the Secretary of State for Levelling Up, Michael Gove MP.

He says: “I’m thrilled that the PM has asked me to lead the Levelling Up agenda, the defining mission of this Government.

“With a superb team of ministers and officials in a new department, our relentless focus will be on delivering for those overlooked families and undervalued communities across the United Kingdom.”

Reaction to the name change has been mixed. The LibDem’s housing spokesperson and former leader Tim Farron (pictured) described it as ‘Orwellian‘.

Twitter has been quick to lampoon the change, making comparisons to Monty Python’s ‘Ministry of Silly Walks’, while more thoughtful critics have highlighted how it’s the first government department to be named after a policy or aim, rather than an activity.

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One year and £35k to evict a COVID rogue tenant

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The latest property market analysis by Benham and Reeves has revealed that the costs incurred by UK landlords who have been unfortunate enough to encounter a nightmare rogue tenant during the pandemic.

While the vast majority of tenants are respectful and treat their rented homes with great pride and care

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