‘Ministers must change course on evictions reform or risk serious consequences’

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A group representing all the key stakeholders in the private rented sector has warned the government that abolishing Section 21 evictions will not achieve the goals that the government, and groups like Shelter, hope to achieve.

The Letting Industry Council group includes over 50 representatives from the sector including Paul Shamplina of Landlord Action, Chris Norris of the NRLA and senior figures from Belvoir, Rightmove, UKALA, Knight Frank, Hunters, Dexters, Savills, Martin & Co, Goodlord, MyDeposits and Propertymark, to name a few.

Their new report, which is in response to the proposals for the PRS within the recent Queen’s speech, warns that abolishing section 21 eviction notices is ‘not the ultimate answer’ to resolving the issues of tenancy insecurity.

Read our report on the Queen's speech.

“Rental properties are investments and landlords prefer to have an occupied property rather than risk a void period, with statistics showing that the majority of tenancies are ended by the tenant, not the landlord,” the reports says.

“However, we accept that the Government have committed to do this and we have to come together as an industry to find the best way of introducing this far-reaching change and avoid unintended consequences.”

The TLIC report also warns that abolishing section 21’s effectively abolishes Assured Shorthold Tenancies (ASTs) and that, apart from losing landlord confidence, which is a serious concern, it will change the entire working model of an AST for all concerned.

“For tenants, this will mean that landlords become more risk adverse and that those with lower incomes and poor rental history will be rejected in favour of higher-income renters with a satisfactory rental history,” the report says.

Instead, TLIC recommends that Ministers:

• Enable faster possessions where a tenant has clearly ‘abandoned’ a property
• Reduce the backlog of eviction cases stuck in the courts including via the hiring of more judges.
• Priorities cases which involve high or persistent rent arrears and drop the ‘review hearings’ introduced during Covid.
• Make mediation recommended in all possession cases.

Other recommendations by TLIC include:

• Introducing a bond or guarantee scheme for tenants who struggle to scrape together a deposit.
• Using Unique Property Reference Numbers or UPRNs to join up all the data about properties and landlords into one place.
• Launch an industry-wide regulator to oversee a system of letting agent regulation, property MOTs, a property register as well as both tenant and landlord redress.

“This report seeks to find a balance between encouraging investment in the sector to increase available homes and ensure they are of consistent good quality through natural supply and demand competition,” says Theresa Wallace, Chair of TLIC (main pic).

Read the recommendations of the group in full.

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Boris mulling lower CGT for landlords to persuade more ‘accidentals’ out of PRS

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Boris Johnson is reportedly looking at ways to shrink the amateur end of the PRS by giving accidental landlords incentives to sell up – a plan doomed only to drive up rents, says the NRLA.

Media reports describe Whitehall officials’ plans to tempt buy-to-let landlords into selling properties to first-time buyers by charging lower capital gains tax.

The Daily Mail says that although in the very early stages, the Prime Minister is keen to do something radical on housing before the next election.

Landlords currently pay 18% on any gain as a basic rate taxpayer or 28% as a higher rate taxpayer.

The Scottish Sun adds that ministers reckon large numbers of accidental landlords are helping to strangle housing supply; indeed, the latest English Housing Survey reports that 45% of landlords have just one rental property or 21% of the private rented sector.

The Sun quotes a source close to the discussions as saying: “The Prime Minister wants to shrink the buy-to-let market”.

Chris Norris (pictured), NRLA policy director, tells LandlordZONE that there appears to be a worrying lack of strategy and coherence in government thinking.

“What we know is that the demand for rented housing is outstripping supply,” says Norris. “Cutting supply further and driving up rents is hardly going to make it easier for aspiring homeowners to save for a home of their own.

“Instead, the government should scrap the nonsensical tax paid when landlords create new housing. As well as easing the supply problem, this would bolster Treasury coffers to the tune of £10 billion as a result of increased income and corporation tax receipts.”

Read: The complete guide to CGT to landlords.

Whitehall officials have also suggested doing more to help young people by persuading older people to move out of their family-sized houses into smaller homes better suited to their needs by reducing the amount of stamp duty that pensioners have to pay if they move to a smaller home.

Read more about CGT reform.

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Can we move into our HMO?

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My wife and I were wondering if we moved into our HMO, by not taking in a new group of students and paying the HMO mortgage off with the sale of our residential property and using what was the HMO as our new main residence?

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Don’t give away 50% of your profits

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A very popular strategy with many property investors is the concept of Joint Ventures, particularly when you have run out of your own money.

You find a great property deal and someone else (who maybe does not have the time

View Full Article: Don’t give away 50% of your profits

EXCLUSIVE: Landlords fight ‘ridiculous’ plans to widen HMO licensing in Portsmouth

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Portsmouth Council has launched a consultation into licensing thousands more HMOs across the city.

Its current scheme already covers 1,200 larger HMOs but it plans to extend this to an estimated 4,800 three- and four-bed houses – figures that Portsmouth and District Private Landlord Association dispute.

Chairman Martin Silman (pictured) tells LandlordZONE: “The council only found 3,000 HMOs when they had additional and mandatory licensing between 2013 and 2018, and we know many have disappeared since then, so to suggest there are 2,000 more now than then is ridiculous.”

Smaller shared homes were included in mandatory licensing from 2013 to 2018 but only within certain parts of the city, while the new proposal covers the whole of Portsmouth.

The local landlord group believes the authority is using the exercise to increase the standards required for HMOs, and that this could backfire.

“Portsmouth already asks for most communal space per person in the country, now they are adding minimum kitchen widths and other strange requirements,” says Silman.

“The sad news is that this will drive a lot of small HMOs out of the market which will push up rents for all and create homelessness.”

He adds: “We will fight it vociferously but unless there is a major change of political views, it will happen anyway.”

No justification

But the council believes there is no justification for targeting specific areas of the city and its report explains: “We also believe that having different requirements in certain areas would cause confusion to landlords and tenants. It may also put undue pressure on neighbouring wards where rogue operators may be displaced.”

Last year, LandlordZONE reported that despite heralding its current licensing scheme’s success, it had fined just seven landlords and agents in 2020.

A final decision is expected to be made in the autumn, with the first five-year licences – costing £855 – potentially issued in spring 2023. The consultation is open for comments until 31st July at www.portsmouth.gov.uk/HMOLicensing.

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Landlord 1 – Shelter Nil

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I had a very large and aggressive tenant who was in rent arrears. For the 11 years of his occupation, he was regularly behind with the top-up to his housing benefit and I would periodically have to ask for back payments.

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Property passports to help landlords prove their homes are compliant

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The NRLA are calling for new property passports to help landlords prove their homes are compliant and tenants identify decent and safe housing.

Under plans devised by the National Residential Landlords Association (NRLA), such passports would certify that a property met all legal standards.

View Full Article: Property passports to help landlords prove their homes are compliant

‘Landlords cannot rely on agents to tell them about licensing’ – judge

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A landlord who blamed his letting agent for mistakenly telling him his property wasn’t an HMO has been slapped with a £19,350 Rent Repayment Order.

Joshua Conway sought advice from high street agent Elli G Estates about his property in Shirehall Close, Barnet (pictured), where four former tenants shared three bedrooms, a kitchen and a bathroom between September 2018 and September 2019, a First Tier Property Tribunal heard.

When informed in July 2019 that it needed a licence, he applied for an exemption notice by telling Barnet Council he would soon be moving back in.

The tribunal judge said that a landlord’s reliance on an agent would rarely give rise to a defence of reasonable excuse.

During the hearing, it was discovered Conway had been named in an article in The Times as a director of Vale Investment (Management), where tenants had been trying unsuccessfully for months to get the property agency to repair a leaking roof.

Conway claimed he was not involved in property management, which the tribunal disputed.

It ruled that the professional landlord, who has one other rental property, should not have taken advice from the agent and that he had a better knowledge of property management than he was admitting to.

Giles Peaker, a partner at Anthony Gold, says it’s increasingly clear that attempts to rely on it being ‘someone else’s job’ to tell the landlord they have a licensable HMO, will fail.

He tells LandlordZONE: “For blaming the letting agents to have any real prospect of success as a reasonable excuse defence, I think it’s right that there would need to be a clear and explicit duty on the agent to inform the landlord of licensing requirements set out in the agent’s contract with the landlord. Even then, it may not work, as it is still the landlord’s responsibility.”

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MP’s Strike Back Against Buy To Let Landlords

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MP’s strike back against Buy To Let Landlords as they release a House Of Commons Commission Report about further regulation on the private rented sector.

Joining me to cover this story on Property Breaking News is Andrew Roberts.

View Full Article: MP’s Strike Back Against Buy To Let Landlords

‘Covid is not an excuse to dodge licensing’ judge tells landlord facing £10,000 RRO

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Landlords can’t use Covid lockdowns as an excuse for not licensing a property, a First Tier Property Tribunal has ruled.

Paul Fashade argued that his HMO in Devonshire Road, Lewisham (main image) had previously had a licence for six people which expired in July 2020 and that he and his property manager had tried unsuccessfully to renew it during the pandemic.

He told the tribunal they had emailed Lewisham Council and tried to renew it online – but couldn’t provide any evidence of emails or phone calls. He finally got a licence in February 2022, after the three tenants who brought the case against him had left.

One tenant received a Rent Repayment Order of £2,880 and two shared a joint order of £8,350 for living at the unlicensed six-bedroom HMO between December 2020 and December 2021.

The three reported that they had not been given copies of the gas certificate or EPC with their tenancy agreements and one said his deposit had not been protected until half-way through his tenancy.

They had assumed the HMO was licenced and only discovered its status by making a search of the local authority register.

37 repairs

A report following a council inspection in September 2021 revealed that the house was not in pristine condition and that Fashade had been asked to carry out 37 repairs and improvements to the property as a condition of the granting of a new licence.

He tried to claim that damage had been caused by the tenants, however the tribunal ruled that the cause was more likely due to wear and tear.

It added: “The tribunal does have regard to the respondent’s conduct and that of his manager for whom he is responsible, including making unfounded allegations about the applicants’ conduct, failing promptly to repair faults at the property and disrespectful behaviour towards the applicants.”

Read the tribunal decision in full.

Read more recent news about rent repayment orders.

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