LATEST: Luton finally brings in blanket HMO licensing after years of problems

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Luton Council has finally got its act together and revealed blanket HMO licensing for the town after a number of false starts over the last few years.

HMOs of any size will now need a licence under its additional scheme which launches on 1st April, while all privately rented properties in South ward which aren’t HMOs will also need to be licensed under a new selective scheme.

The council has previously been thwarted by landlords and letting agents as well as its own ineptitude. Luton tried to introduce a scheme in 2018 when its previous additional licensing scheme ended, but faced significant local opposition and then went silent about its plans until December 2019 when its executive committee rubber-stamped them.

However, a group of agents, landlords and concerned residents got together and formed Luton Landlords and Letting Agents Ltd, whose solicitor launched a legal challenge, forcing the council to admit errors in its implementation and decision making, and the scheme was put on hold.

Regulated

Councillor Tom Shaw, portfolio holder for housing (pictured), says the new measures will improve a lot of tenants throughout the town, giving them peace of mind that their premises are being regulated.

He adds: “The introduction of these measures raises the game of landlords too as they will need to comply with the law in order to continue renting out their properties.

“Other parts of the country that have introduced this type of selective licensing have experienced improvements in neighbourhoods, which have enhanced the quality of life for all residents and we anticipate the same happening here in Luton.”

The licence fee for an HMO with up to three bedrooms is £488 with an extra charge of £122 for each additional bedroom, while it’s a flat fee of £488 for a selective licence.

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EXPERT: What this week’s Court of Appeal win by landlord means in practice

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A landmark Court of Appeal case with potentially calamitous consequences has cleared up uncertainty about who has the authority to sign section eight notices and deposit protection certificates, explains the lawyer representing the winning landlord company.

David Smith (pictured) of legal firm JMW says if the firm had lost the critical case earlier this week, it would have made business largely impractical and led to tenants making huge numbers of deposit claims against their landlord or letting agent.

“Recent possession orders obtained and not enforced could have been appealed, existing possession orders would have collapsed – it would have had a big impact on landlords across the country…with potentially widespread bankruptcies as a result,” says Smith.

Instead, it was a significant victory as Appeal Court judges found in favour of the landlord in Northwood Solihull v Fearn & Ors, which centred on the Solihull branch of letting and estate agency Northwood.

It had served a Section 8 eviction notice on tenants Mr Fearn and Ms Cooke who argued that this, as well as a certificate for their deposit, had not been signed by two authorised signatories or by a company director in the presence of a witness, but by another company employee instead.

Smith says the ruling means that if you’re a corporate landlord or agent acting in a corporate capacity, your employees can continue to sign documents on your behalf.

Tea maker

“As long as the employee has the authority to do so, for example, a property manager – however, if your job is to make tea then you probably don’t.”

He adds that the Court of Appeal has effectively ruled that it’s up to Parliament to protect tenants with laws: “It’s not for lawyers to come up with tricks to make it more difficult for landlords.”

The tenants have now sought permission to appeal to the Supreme Court although Smith doesn’t think the Appeal judges will give permission and expects that a section 21 will be served.

Reaction

Timothy Douglas, (pictured) Head of Policy and Campaigns, at trade body Propertymark says: “The decision by the Court of Appeal brings much needed clarity to a long-disputed area of the law and is a victory for common sense, which agents will welcome.

“The retrospective judgement from the High Court dangled the possibility for ramifications for the sector with a significant number of claims against agents. Due to the potential implications, Propertymark was pleased to contribute to the costs of the appeal by the landlord.

“The judgement does however go much wider and the same rational will surely apply to virtually every notice prepared for a corporate landlord, from Section 21 Notices to rent increase notices and even notices to quit.”

Watch David Smith talking more about the case.

Read the judgement in full.

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RESEARCH: Why landlords are becoming more semi-detached

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Semi-detached houses have overtaken terraced homes as the most popular properties with landlords looking to buy, as tenants search for more space. 

Research firm BVA BDRC’s survey of 800 landlords for Paragon Bank found that of the 14% who are on the acquisition hunt this year, 40% want to buy semi-detached homes – up from 32% at the start of the pandemic.

If found that 39% are after terraced houses, while detached houses have also grown in popularity during the past two years, up from 9% in Q2 2019 to 18% in Q4 2021.

Other property types on landlords’ wish-list include individual flats (17%) and HMOs (16%).

Activity versus size

The survey also found that the likelihood of being active in the property market increases in line with portfolio size; 8% of single property landlords expect to buy during the next year, increasing to 24% among those with a portfolio of 11 or more homes.

Meanwhile, 52% plan to buy a property within a limited company structure.

Richard Rowntree, mortgages MD, says it has seen a trend for larger homes due to the prevalence of home working, along with more families who are selling their home to relocate and renting before they buy.

He adds: “We may also be seeing landlords anticipating the planned changes to energy performance rating of property and targeting homes that are either meeting the planned minimum EPC level C or those that will be easier to upgrade than terraced homes.

“It will be interesting to see whether this trend continues in the coming months.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – RESEARCH: Why landlords are becoming more semi-detached | LandlordZONE.

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Avoid potential problems as a result of pending carbon monoxide safety legislation

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UKALA has cautioned Landlords and letting agents to act now to avoid potential problems following the announcement that the government intends to pass legislation to extend the requirement to install carbon monoxide alarms in all rental properties in England with fixed combustion appliances.

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Housing market leaders vent frustration over stalled leasehold reform

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Leading organisations from the property sector have written to housing secretary Michael Gove imploring him to implement his government’s plans to reform the leasehold system which were announced more than a year ago.

The interest groups represented include conveyancers, deposit protection providers, mortgage lenders, surveyors, estate agents and tech firms.

All are asking Gove to bring into law the measures already announced or supported by the government over the last two to three years, including the Law Commission Reports on leasehold enfranchisement, sorting out ‘right to manage’ and Commonhold, bringing in the much-expected Leasehold Reform Act, preventing leaseholders being ripped off by management firms.

Disappointed

“We are disappointed the government has yet to implement these measures given the exploitation continues and increases with every passing day,” the letter says.

“We would therefore urge you to include the already-announced measures in future legislative plans as soon as possible to avoid further blighting of leasehold and so-called ‘fleecehold’ managed leasehold.”

Beth Rudolf (pictured), Director of Delivery at the Conveyancing Association, says: “We are simply calling on the Government to fulfil its obligations in this area.

“By doing this we can ensure leaseholders can set in motion parts of the property-owning democracy that are simply not open to many of them, such as selling their properties or securing a mortgage.

Time for action

Sean Hooker, (pictured) Head of Redress at the Property Redress Scheme, adds: “This is the time for Government action to restore the confidence of leaseholders, who currently feel like second-class citizens in the property world.”

“The redress schemes deal with the frustrations of leaseholders on a daily basis but are often powerless to help. The balance of power must shift back towards the consumer.

“The measures in the proposals will create a robust framework of rights and remedies and restore balance and fairness to the system that has been eroded as the market has evolved and changed, since the existing laws were introduced.”

Read more about leasehold flats.

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