Landlords in limbo as homes shortage makes renters stay put

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Landlords are struggling to get tenants to move out because of a chronic shortage of available properties to rent.

As well as coping with tenants building up rent arrears during the pandemic and the resulting protracted eviction process, landlords around the UK report that some are now ignoring eviction notices and having to be forcibly removed because they can’t find anywhere suitable. Rising house prices – preventing potential home buyers from moving on – and the fact some landlords are selling up have both contributed to the problem.

Landlords in limbo

An article in The Telegraph quotes letting agents and landlords who explain how they’ve even offered to help tenants move or how a refusal to quit has put their property sale at risk, leaving the landlord in limbo.

Portsmouth & District Private Landlords Association chair, Martin Silman, tells LandlordZONE that some members with private sector tenants have been told by their local authority not to move until they absolutely have to do so, after being served a Section 21 by their landlord. He adds: “Sadly this is not uncommon and further evidence of the immense shortage of rental accommodation in the area.”

Chronic shortage

The NRLA has been warning the government for some time about the problems tenants are facing because of a chronic lack of private rented housing to meet demand. “Action is needed to address this, including reversing some of the tax changes on the sector,” a spokesperson says. “This should include scrapping the stamp duty levy on additional properties. It is crazy to be taxing the supply of new homes.”

However, there is less evidence of the phenomenon in other parts of the UK, such as the East Midlands where EMPO’s Giles Inman says it has not heard reports about the issue. He adds: “We are dealing with lots of requests for advice and guidance around the possession process, however the main reasons for possession are around tenant behaviour, rent arrears and landlords selling up.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords in limbo as homes shortage makes renters stay put | LandlordZONE.

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Rent arrears – Benefit Nightmare?

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I have a tenant who was unable to work due to health reasons. His partner left him a couple of years ago and subsequently, I’ve gone out of my way to try to find ways for him to stay in the flat because of his health.

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Gove pledges to improve social housing – and takes a swipe at PRS

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Levelling Up Secretary Michael Gove has vowed to give the “inadequate” social housing sector a boost in an apparent policy U-turn.

After decades of falling investment, government figures show there are more than a million households on the waiting list for a social rented home in England, according to Shelter. Speaking at the charity’s housing conference this week, Gove said the sector was in urgent need of reform. “If we want to have functioning communities, if we want to have our cities and towns having places where keyworkers and individuals who keep our public services going can ensure that they have a decent roof over their heads and raise a family in stability and security, then we need more social homes,” he told delegates.

PRS criticised

However, in the same speech, Gove also levelled criticism at the PRS, lending weight to the homeless charity’s line that it is now ‘broken’. He said: “The quality of the private rented sector, the circumstances in which people find themselves, the inadequacy of so many of those homes, the fragility and vulnerability that so many people find in their daily lives…is insupportable and indefensible.” 

Gove added: “But the cost even for those who are in the care and in the hands of good landlords, compared either to what they would be paying if they had a mortgage or what they’d be paying if they were in social housing, is again indefensible in many cases.” 

Decent homes

Former Prime Minister Theresa May added that problems were caused because not enough homes were built over many decades. She said: “For too long, my party has been seen in many peoples’ eyes as the party only of homeownership. Indeed, dare I say it, our policies have too often made it seem that way. But we are the party of decent homes for all, be they people who want to rent their home or to own their own home.” 

Other speakers at the event included social housing campaigner Kwajo Tweneboa and the Bishop of Barking Lynne Cullens.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Gove pledges to improve social housing – and takes a swipe at PRS | LandlordZONE.

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Levelling up Bill targets vacant shop landlords…

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The new levelling up Bill will force landlords into letting auctions

Announcing another 68 local authorities that will receive support from the High Streets Task Force, including Southend-on-Sea, Somerset West and Taunton, Rossendale and Dudley, the Government spells out its commitment in its new Levelling Up and Regeneration Bill.

The locations have been allocated using the Indices of Multiple Deprivation (IMD), together with other measures of retail exposure. Delivery of funds and support to these local authorities is to be staggered, starting from this summer, until the end of the programme in 2024.

In addition, new powers are to be introduced as part of the Bill, which will be announced in the Queen’s Speech next month. The Government has said it will give more powers to local authorities to enable them to make high streets and town centres “the thriving hearts of communities again.”

“We will incentivise landlords to fill vacant units by giving local authorities the power to require landlords to rent out vacant properties to prospective tenants. This will tackle both supply and demand side issues to avoid high levels of high street vacancies and blight, and in turn increase the attractiveness and vitality of our high streets,” says the Government’s white paper.

This, the Government says, builds on the High Street Task Force’s wider offer to all communities, which includes online resources and training modules, webinars and access to data dashboards.

New life on the high street

Vacant shops are to be “reborn” under plan which aims to “breathe life into high streets” by forcing landlords to let out retail units that have been vacant for six months

In other words, retail landlords in the chosen locations could be forced to rent out shops that have been vacant for 6 months or more. If the owner can’t let the shop, then councils will be empowered to hold letting auctions.

The plan is to help remove boarded-up shop properties that blight these once thriving town centres, and return them to their former glory by allowing community groups and small businesses to take over.

Conversions and re-purposing

The High Streets Strategy, through changes to the planning laws, has been making it easier to convert empty shops into new uses like high street homes; granting automatic rights for pubs, restaurants and cafes to allow takeaway and al fresco dining; and make high streets safer and cleaner, with a focus on tackling litter, gum staining and graffiti.

The UK Government has been providing £1.7bn of temporary business rates relief in 2022-23 for up to 400,000 retail, hospitality and leisure properties to support the high street until the next revaluation. With the announcement of a freeze in the business rates multiplier worth £4.6bn over the next five years, all ratepayers in England will see a tax cut.

High street vacancies

With one in seven shops vacant on the UK’s high streets, the number of empty shops has soared since the pandemic. Many of these were shuttered during the lockdowns and failed to get back on their feet as the shift towards online shopping has accelerated.

The large fashion retailer chains have been among the hardest hit, with the likes of Debenhams, Dorothy Perkins and Topshop, along with many high street banks, contributing to the vacancies.

Last year more than 8,700 chain stores closed on Britain’s high streets, in shopping centres and on retail parks in the first six months. During this phase of the pandemic there was an average of nearly 50 outlets a day closing down.

But despite some high-profile retail failures, the number of closures has actually stabilised since then and the outlooks appears brighter as the effects of the pandemic recede.

Government support

Lisa Hooker, consumer markets lead at PwC says she believes continued government support, combined with resilient consumer spending, has helped many operators weather the storm and survive the pandemic.

Under the Government’s plans, local authorities will be given the new powers to to force landlords to rent out their vacant commercial property on high streets through a Compulsory Rental Auction. After a short grace period given to landlords to let their shop, the local authority will instigate an auction, inviting bids from interested parties.

Government ministers see this as a means of rapidly reducing the number of boarded-up shops while creating new opportunities for local small businesses and community groups. This, they argue will have a snowball effect, helping increase footfall and spending in these blighted town centres.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Levelling up Bill targets vacant shop landlords… | LandlordZONE.

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A familiar story I believe?

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I have issued a S21 to a tenant. I need to sell the house (they have never been a great tenant!). The council and Shelter have apparently advised the tenant to stay put – a familiar story I believe?

The tenant says the council has said some social housing is being built and she will get one

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Tenancy deposit cap cut costs for tenants in England and Wales

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The average tenancy deposit paid to landlords has dropped steadily since the start of the pandemic and the introduction of the deposit cap.

New research by mydeposits reveals that tenants paid an average of £948 in 2011, rising to a peak of £1,108 in 2019. This dropped 6% to £1,040 in 2020 and a further 1% to £1,025 in 2021, meaning that landlords now have less money to cover damage or tenants who disappear without paying rent arrears. However, the cost of a tenancy deposit is still some 8% higher than it was a decade ago as the cost of renting has also climbed by £202 per month (30%). 

Total deposits rise

The figures show that there’s been a 91% increase in the value of deposits protected across England and Wales; from 2.2 million deposits with a total estimated value of £2.1 billion in 2011, up to £4.3 billion in 2021 and more than 4.2 million deposits.

Eddie Hooker, CEO of mydeposits, says the hurdle of a tenancy deposit remains considerably higher than it was in 2011. “The good news is that it has started to fall since 2019 and the introduction of deposit caps, which have ensured that any sums charged don’t exceed the five to six-week thresholds set by the government. Of course, the pandemic has also played a part with rental values falling in many areas, thus reducing the deposit charged based on these thresholds.” 

Downward trend

Hooker adds that it’s looking increasingly likely that rental market values may once again start to climb in 2022, which could reverse the downward trend seen in the cost of a tenancy deposit. “Fortunately, tenants have more choice now especially with the introduction of initiatives such as Ome, our deposit replacement product and landlords are increasingly being flexible in offering these alternatives.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tenancy deposit cap cut costs for tenants in England and Wales | LandlordZONE.

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UK’s Number 1 Property Networking Event Returns – Baker Street Property Meet Is Back

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Join the UK’s Number 1 Networking Event in Central London, on 27th April at 6pm. Book Your Tickets For This Months Baker Street Event Here: https://www.bakerstreetpropertymeet.com/

The Baker Street Property Meet is the ideal place to get your burning property questions answered.

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BBC – Is the private rented sector under attack? Help us defend it

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The BBC has asked propertymark to collate data for them so the BBC can use the survey to “draw the country’s attention to the issue of landlords deciding to sell or jump to short term lets.”

The BBC say they want new incentives to bring in new landlords to the PRS whilst keeping the old ones.

View Full Article: BBC – Is the private rented sector under attack? Help us defend it