Pandemic student exodus was ‘no excuse’ to dodge HMO regulations, rules judge

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A landlord who used Covid-related tenant absences as an excuse for not licensing his HMO has been handed a Rent Repayment Order.

Portfolio landlord Kulvant Singh Steven Birk, who owns ten properties in the Preston area, argued that because his five student tenants had left the Adelphi Street converted pub (pictured) during lockdown when their university closed, it should not be considered an HMO in that period.

Birk also claimed that he was not aware of a change in the law regarding licensing rules, but a First Tier Property Tribunal ruled that this was no justification and ordered him to pay them £2,116 each.

The tribunal heard that the five tenants signed an 11-month tenancy agreement in July 2019, but that at the end of March 2020 they returned to their respective homes before the tenancy ended at the end of June.

That month, ongoing issues about the bins led to an inspection by housing standards officers from Preston City Council who told Birk it needed a license. He then applied in May 2020.

Transitory

The tribunal ruled: “We are satisfied that the applicants’ lockdown-related absences were transitory and should not be regarded as a break in their occupation of the property.

“We heard that, on being advised to return home when face-to-face teaching was suspended at the end of March 2020, the applicants were initially hopeful that this would be for a short period or just two or three weeks.

“They fully intended to return as soon as circumstances permitted them to do so and they did not remove all their belongings from the property.”

It also rejected Birk’s claim that his higher than usual operating costs for running an HMO including payments for repairs and using a letting agent should be taken into account when deciding the fine.

Read judgement in full.

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County Courts given £324m to speed up cases and cut evictions backlog

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County courts are to receive an extra £324 million over the next three years to help clear their case backlogs and both modernise and speed up court processes.

The settlement is part of the additional £2.2 billion given to the Ministry of Justice within Chancellor Rishi Sunak’s Autumn Spending Review revealed this week.

“The pandemic created unprecedented challenges but this settlement is the largest increase in more than a decade for the justice system,” says Justice Secretary Dominic Raab (pictured).

“That means we can focus on building a better, more efficient, justice system for all.”

Of the extra £324 million, some £200 million is to be spent on upgrading the court system’s often clunky technology and move court processes to quicker and safe online platforms, all part of a £1.3 billion court reform programme.

The extra cash cannot come soon enough for landlords seeking to evict tenants, many of whom have faced huge delays and backlogs within the court system, problems that have intensified during the pandemic.

Shortages

Michelle Heeley QC of No5 Barristers’ Chambers, who works on the Midlands circuit, says: “Although any move to increase funding and improve the criminal justice system is welcomed, this cannot be allowed to simply paper over the cracks. The backlog crisis started before the pandemic, which has merely exacerbated the situation.

“Over the last four years, there has been an 11% decrease in the number of junior barristers available for criminal cases, and a 22% reduction in the number of criminal QCs. This is a direct result of a lack of funding to ensure cases are being heard, which in turn limits the ability of the justice system to carry out its function.”

Paul Shamplina (pictured) of Landlord Action comments: “This is great news for landlords and I hope some of this extra cash will be spent on a major recruitment exercise to provide more judges and more bailiffs – shortages of which continue to delay possession cases for our landlord clients.

“There also needs to be bailiff reforms – High Court Sheriffs must be allowed to carry out more evictions.

“But let’s not forget that prior to Covid, there was a Housing Court working group and consultation, which was linked to the [now delayed] rent reform White Paper and the banning of Section 21 ‘no fault’ evictions – this needs to be actioned too.

“It is essential that landlords have confidence in the evictions system and that they can gain possession of properties within a timely period when tenancies go wrong, otherwise more landlords will seek to exit the sector.”

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Act Now before rates rise – Don’t delay

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The Bank of England Base Rate is currently at an all-time low at 0.1% and this has led to mortgage rates being at all-time lows. Interest rates change over time, just over 30 years ago the Base Rate was 14.88%

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Misleading Right Move Adverts – What can we do?

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We are in a situation, where a dubious agent is advertising greenbelt land for sale on RightMove.com with a clause that says ‘Suitable for residential, commercial or agricultural subject to the necessary consents’.

The local farmland was recently purchased

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BREAKING: Ministers delay publishing rent reform proposals until next year

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The government has revealed that it is to delay publishing its long-awaited proposals to reform the private rented sector until next year.

In a statement released today, the Department for Levelling Up, Housing and Communities (DLUHC) says the delay is required because it needs ‘additional and necessary time to develop the balanced package of reforms that we promised to deliver’.

Michael Gove’s DHLUC says in an email sent out to the industry trade bodies that this will “not only allow us to benefit from continued work with the sector but will also allow us to carefully consider the findings of the National Audit Office’s review of regulation of the sector which is due to report in the coming months.”

“Responding to the DHLUC email, Isobel Thomson, safeagent Chief Executive, says: “We welcome the clarity on when the White Paper on reforms to the private rented sector (PRS) will be published.

“It makes sense to wait for the findings of the National Audit Office’s review of existing regulation and exploration of key sector organisations’ aspirations for PRS reform for the benefit of tenants and landlords [due ‘this winter’]. safeagent took part in the NAO’s review and looks forward to the report being published.”

When the proposals to reform the PRS are finally published within its White Paper, it will have been a long wait – the monarch revealed in May that the government intended to publish the document ‘in the Autumn’.

The proposals will include several radical new measures for the PRS including a new ‘lifetime’ tenancy deposit model, bringing forward reforms to drive improvements in standards including by ensuring all tenants have a right to redress and also exploring the merits of a landlord register.

Sean Hooker, Head of Redress (pictured) at the Property Redress Scheme, says: “I appreciate the industry is on tenterhooks waiting to see what the proposals will be and uncertainty is not good for any sector, the fact the Government is continuing to consult with us and gather evidence on the impact and unforeseen consequences of the changes, is a prudent thing to do.

“For the sake of a few months more, let’s get this right not rush it through half baked. What is essential is once the White Paper is published, that the process speeds up and a consensus is achieved that benefits all parts of the vital housing market.  

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Ministers delay publishing rent reform proposals until next year | LandlordZONE.

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Labour claims Rishi Sunak’s stamp duty holiday led to buy-to-let bonanza

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Labour claims its analysis has found that the number of buy-to-let mortgages had tripled when the Chancellor announced his stamp duty holiday plans in his 2020 budget.

The stamp duty holiday was introduced by the Chancellor in July 2020. Subsequently it was then extended until 30 June 2021. 

To boost the UK property market

The idea was to help homebuyers and to boost the UK property market during the COVID-19 pandemic. This meant that buyers completing a purchase on a property for less than £500,000 before 1 July 2021 didn’t have to pay any stamp duty.

Stamp duty went back to normal rates in stages. From 1 July to 30 September, it was payable on the cost of properties above £250,000. Then, from 1 October, it reverted to pre-holiday rates, starting at £125,000.

Landlords purchasing buy-to-let properties still had to pay an extra 3% in Stamp Duty on top of the revised rates for each band.

At the expense of first-time buyers

Labour say that Rishi Sunak’s stamp duty holiday has led to a bonanza for buy to let landlords – and a blow to first-time buyers, their research indicates.

Labour’s analysis found that the number of buy-to-let mortgages actually tripled after the Chancellor announced the stamp duty land tax temporary reduction in his 2020 budget, a zero rate that would be increased from £125,000 to £500,000.

The concession also applied to all buy-to-let landlords and second homeowners, which Labour strongly objected to. The opposition party says that its analysis of figures from UK Finance shows that buy to let mortgages had tripled from 4,500 when the holiday was announced in July 2020, to 152,00 in June 2021, when the biggest tranche of discount came to an end.

During this time the proportion of mortgages to first time buyers came down every month from October 2020 to June 2021 according to labour’s figures.

Shadow Housing Secretary Lucy Powell says that in March and April 2021, the months before the holiday was first expected to end, the proportion of mortgages to first time buyers was down 10% on the previous year.

She said: 

“The Conservatives have wasted millions of pounds on a stamp duty holiday which benefitted landlords and second homeowners, over first-time buyers trying to get a foot on the ladder.

“Rather than seeing homes as the bedrock of a stable and successful life, the Conservatives treat housing as a commodity to be traded and profited from.”

Labour’s figures show that in the South West, mortgages for first time buyers were down 14% on the previous year in April 2021. In the North West they were down 11%, and in the East and West Midlands they were down 12% in March 2021.

Lucy Powell went on: 

“Labour is the true party of home ownership. Rather than robbing first-time buyers of their advantage, we would give them first dibs on new build homes, and stop the scandal of developments being sold off plan to overseas investors.”

A Treasury spokesperson had said: 

“Our temporary stamp duty cut helped to protect hundreds of thousands of jobs which rely on the property market by stimulating economic activity.”

Tenant arrears fund

Tenants in rent arrears are to get a £65million fund to help them after the Government eviction ban and the Universal Credit uplift come to an end.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Labour claims Rishi Sunak’s stamp duty holiday led to buy-to-let bonanza | LandlordZONE.

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Yorkshire council boasts about its eye-watering fines for errant private landlords

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Harrogate Borough Council has fined seven rogue landlords a total of £109,000 since 2018 for failing to meet housing standards, one of a growing number of local authorities keen to parade its track record on prosecutions.

The council boasts that it has successfully defended every appeal made by a private landlord against financial penalties.

It most recently took action against Jamshid Jalali-Ghazaani, who ignored an improvement notice on his property on the High Street in Starbeck after the council found several hazards including excess cold, structural and kitchen safety issues.

He was fined £25,000 and appealed against the penalty which was dismissed by a property tribunal.

Other successful defences include against landlord Stephen Archer who was fined £15,000 for failing to comply with an improvement notice at a property on Providence Terrace, and landlord Andrew Norman who was fined £13,500 for failing to comply with licence conditions at an HMO in Dragon Parade.

Harrogate Council (pictured) has also issued financial penalties totalling £40,589 against other landlords who did not appeal.

Encourage landlords

Trevor Watson, director of economy, environment and housing, says: “This is an important reminder for landlords that as the housing authority we have the powers, and where necessary, will use them to protect tenants and residents, and hopefully encourage landlords to improve housing standards in the private rental sector.”

Earlier this month the Department for Business, Energy and Industrial Strategy announced a new campaign along with an extra £4.3m of extra funding to help councils clamp down on errant landlords.

Councils will share the cash to make an extra 100,000 engagements with difficult to reach landlords who own the worst performing properties that fail to meet a minimum energy performance rating of EPC band E. The money will pay for local radio ads, roadshows and workshops.

Read more about fines in Harrogate.

Image: Farrell & Clarke Architects.

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Isle of Wight votes to bring in £30,000 fines for rogue landlords

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Isle of Wight landlords face a crackdown after the council agreed to bring in tough new civil penalties, LandlordZONE can reveal.

The council is the latest to introduce fines of up to £30,000 which will be used where landlords fail to comply with improvement notices, offences in relation to HMO licensing and contravening an overcrowding notice.

The council says it will choose how to prosecute those involved, either by enforcing a civil penalty or through the magistrates’ court, on a case-by-case basis.

According to Island Echo, when reviewing one case the council had recently dealt with concerning a landlord who’d failed to fix nine hazards in a home where three children lived, housing enforcement officers determined that reasonable civil penalties would have been about £10,000.

The island has a rented sector of nearly 17,000 households. The council reports that money made from civil penalties would create a sizeable income for housing enforcement purposes, with the potential to add more resources to regulate housing standards.

A council report states: “We aim to support good landlords who provide decent homes and avoid unnecessary regulation which increases costs and red tape for landlords and also pushes up rents for tenants.

“However, a small number of rogue landlords knowingly rent out unsafe and substandard accommodation. We are determined to crack down on these landlords and disrupt their business model.”

Read more about the Isle of Wight.

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CGT reporting extended to 60 days

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As of Budget day, the government has immediately extended the deadline to report a Capital Gain on the sale of residential property from 30 days to 60 days.

They have obviously realised this was a needlessly tight timescale and may have responded to complaints made by members of the Association of Accounting Technicians who have been very vocal on the subject

Adam Harper

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UC taper cut does not undo the damage

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Responding to the announcement in the Budget that the Universal Credit taper will be cut from 63 to 55 per cent from 1st December 2021, Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“Today’s announcement is welcome news for those private tenants who have struggled to afford their rents throughout the pandemic

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