The 3 most important things landlords should do when selling rental properties

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The current economic situation has landlords across the UK making the decision to sell their whole property portfolios, or at the very least, downsize. With property market risks, rising interest rates, Section 24 legislations and refurb costs overtaking rent, it seems that the golden era of buy-to-lets is well and truly over.

View Full Article: The 3 most important things landlords should do when selling rental properties

NEW: Shelter claims more landlords ‘kicking out’ tenants via no- fault evictions

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Shelter has published its interpretation of the latest Government landlord possession statistics, claiming they show the courts have seen a 41% rise in Section 21 notice eviction notices as more landlords ‘kick out’ their tenants.

The organisation says the claim, which is based on data covering the first three months of 2022 vs the same period of 2020 before the pandemic hit, shows landlords are turning to no-fault evictions in ‘soaring’ numbers, or approximately 6,000 Section 21 evictions in England during the period.

The figures also show that evictions of all types increased by 32% to 18,626 during the period compared to the previous quarter in 2021. Section 21 ‘no-fault’ eviction notices mean that landlords do not have to give a reason for the eviction and renters can be given eight weeks’ notice.

Shelter is calling on the government to urgently bring forward legislation that will scrap Section 21 no-fault evictions to give renters greater security in their homes during a time of uncertainty – something Ministers have promised to include within the looming Renters Reform Bill.

Polly Neate (pictured), Chief Executive of Shelter, says: “It’s alarming that as the living cost crisis rages more landlords are kicking tenants out of their homes. These are real people whose lives are being turned upside down and simply cannot afford to lose their homes right now.

“While scrapping Section 21 evictions alone won’t solve the cost-of-living crisis for renters, it will at least give them some much-needed security in their homes.”

But Paul Shamplina (pictured), founder of Landlord Action, says the figures quoted by Shelter ‘need clarifying on several fronts’.

“If the government’s quarterly figures continue like this throughout 2022 then some 24,000 evictions will take place using a Section 21 notice, approximately 5,000 more than 2019 and, if you compared the two quarterly periods year-on-year, some 41% more, as Shelter point out,” he says.

“But the trend since 2015 has been downwards when 34,000 Section 21 evictions took place.

“After that, changes to the eviction rules greatly diminished S21 evictions as new rules over gas safety certificates and other mandatory tenancy requirements kicked in.

Read more: How to handle the eviction process.

“But the rise that Shelter now refers to is not because landlords want to suddenly evict tenants unnecessarily, but because either Covid has delayed possession actions [for tenants who have stopped paying the rent] or the government’s tax and regulatory changes have driven more of them to quit the sector, and they want to sell up.

“Remember, many are using Section 21 notices to achieve this, rather than the more complicated Section 8 route.”
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©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – NEW: Shelter claims more landlords ‘kicking out’ tenants via no- fault evictions | LandlordZONE.

View Full Article: NEW: Shelter claims more landlords ‘kicking out’ tenants via no- fault evictions

Spiralling finance costs in turbulent times?

admin    Uncategorized     agents

I’m looking to remortgage and fix for 5 years but I’ve found that 4 of my properties are being classed as commercial which is dictating higher interest rates and ‘setup fees’.

The four freehold properties each contain two self-contained flats and lenders are treating them as ‘Multi-Unit Blocks’ which is commercial lending.

View Full Article: Spiralling finance costs in turbulent times?

EXCLUSIVE: Expert questions official claims that eviction courts backlog ‘improving’

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Claims by a Ministry of Justice (MoJ) minister that possession case delays are being addressed have been questioned by leading evictions specialist Landlord Action.

In response to a question from Conservative MP Theresa Villiers, MoJ Parliamentary Under Secretary of State James Cartlidge revealed that both his department and HM Courts and Tribunals Services had introduced efficiencies to address the delays.

This includes the increased use of Warrant of Control Support Centres to reduce the administrative tasks undertaken by bailiffs.

“This has, and will, free up bailiff resources to focus on other enforcement activity which includes the enforcement of possession orders,” Cartlidge said.

Cartlidge also claimed that the most recent MoJ eviction figures reveal ‘a consistent improvement in timeliness since the enforcement restrictions lifted [at the end of June last year], enabling bailiffs once again to undertake enforcement activity’.

Court speed

But addressing his latter point, Landlord Action’s Paul Sowerbutts (pictured) says his staff report that although some courts are speeding up, those in London ‘are not’.

“Stratford Housing centre says it still has a 14-week backlog and Milton Keynes court is so overwhelmed with work it is outsourcing to Oxford County Court,” he says.

“Bromley is also overwhelmed and using various other places like Bexley Magistrates Court to hold possession hearings. Central London County Court is also super slow.”

The comments echo those by the Lord Chief Justice, Lord Burnett of Maldon, who told a House of Lords enquiry yesterday that all of the jurisdictions were ‘under pressure’ and that ‘overall we have problems… due to ‘capacity issues’.  

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: Expert questions official claims that eviction courts backlog ‘improving’ | LandlordZONE.

View Full Article: EXCLUSIVE: Expert questions official claims that eviction courts backlog ‘improving’

Rental affordabilty in England – Average salary of £30,264 equated to 32.1% of average rent

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Paragon’s Rental Affordability Index takes recently published Government data, and by overlaying gross annual earnings with the average amount spent on rent, reveals an average rental affordability ratio for local authority areas across England with the average salary of £30,264 equating to 32.1% of the average rent

The least affordable local authorities in which to rent a home were all found in London.

View Full Article: Rental affordabilty in England – Average salary of £30,264 equated to 32.1% of average rent

Right to Manage (RTM) Formations Platform Looking For Beta Testers

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Do you lack control over your service charge or have difficulty getting your landlord to make urgent repairs? Are you thinking of RTM but keep on putting it off as the process seems laborious and overwhelming?

If so

View Full Article: Right to Manage (RTM) Formations Platform Looking For Beta Testers

Eddie Hughes, Minister for the Private Rented Sector, to address national landlords conference

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The Minister for the Private Rented Sector, Eddie Hughes MP, will be the keynote speaker at the inaugural National Landlord Conference on Tuesday 15th November.

Hosted by the National Residential Landlords Association in partnership with Landlord Law, the conference will focus on the future of the private rented sector.

View Full Article: Eddie Hughes, Minister for the Private Rented Sector, to address national landlords conference

EXCLUSIVE: How agents and landlords are ‘taking risks’ when sharing referencing info

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An investigation by LandlordZONE into data privacy within the private rental sector has revealed how many letting agents and landlords are sharing information about tenants’ referencing information in contravention of GDPR regulations.

In particular, many agents are getting caught out when there’s a problem with a tenancy and the landlord wants to see the referencing information on which an agent has based their decision.

In theory, they can only share what has been agreed between all parties and within their contracted agreement, usually just a copy of the reference summary confirming the check’s outcome. But when tenancies get into trouble, landlords often then ask to see more detail about a tenant’s background when they challenge the agency’s initial decision to approve a tenant.

Data protection law

Landlords and letting agents are likely to be data controllers under the UK data protection law and should be registered with the Information Commissioner’s Office (ICO), which advises they must be clear with tenants about what data they will collect, why they are collecting it, what they will do with it, who they will share it with, when it will be destroyed, and what the tenant’s rights are in relation to that data.

Vouch founder Simon Tillyer tells LandlordZONE that agents also need to make sure they’re not sharing the name and contact details of a referee as this is personal identifiable information of another individual – not the tenant – which they don’t have grounds for sharing with the landlord. Publicly available information relating to court judgements and bankruptcies would be ok to share.

Legitimate interest

For anything else, an agent must ensure they have a reason to share that information by making a legitimate interest assessment. Adds Tillyer: “Should there be a challenge, they will be able to demonstrate their justification to support the action they have taken.”

He says it is best to have clear T&Cs between agent and tenant which set out that any information used in their application for the property, including the tenant referencing, may be shared with the landlord.

In the case of rent guarantee insurance, it’s often a condition of the policy that satisfactory referencing has taken place; sharing a copy of the reference would be under the ‘performance of a contract’ lawful basis and therefore acceptable, says Tillyer.

“However, best practice would be to extend T&Cs wording to include that sharing the information with the landlord may include for the purposes of insurance.”  

Sensible view

Angharad Trueman (pictured), vice president of ARLA Propertymark, believes agents and landlords must take a sensible view about reference requests.

“The information is of legitimate interest to the landlord and the legal contract is between the tenant and the landlord,” says Trueman. “However, in practice, when information is requested I would always recommend reaching out to the tenant to inform them and have that conversation.”

As many agents may not be completely aware of their responsibilities, Ahmed Gamal, founder of Rentd, advises that one way to negate any breach of GDPR regulations is to allow technology to do the heavy lifting.

“With Rentd, the tenant shares information directly with the landlord and only the landlord,” he says. “Once their offer is accepted, the applicants are referenced based on the information provided with their offer.” 

The ICO’s data protection self-assessment checklist is here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: How agents and landlords are ‘taking risks’ when sharing referencing info | LandlordZONE.

View Full Article: EXCLUSIVE: How agents and landlords are ‘taking risks’ when sharing referencing info

Tenant referencing queries throw spotlight on data privacy laws

admin    Uncategorized     agents

Letting agents have been urged to swot up on GDPR guidance to avoid falling foul of rules over the sharing of tenant details.

Some are getting caught out, particularly when there’s a problem with a tenancy and the landlord wants to see the referencing information on which an agent based their decision. In theory, they can only share what has been agreed between all parties and within their contracted agreement, usually including a copy of the reference summary confirming the check’s outcome.

Data protection law

Landlords and letting agents are likely to be data controllers under the UK data protection law and should be registered with the Information Commissioner’s Office (ICO), which advises they must be clear with tenants about what data they will collect, why they are collecting it, what they will do with it, who they will share it with, when it will be destroyed, and what the tenant’s rights are in relation to that data.

Vouch founder Simon Tillyer tells LandlordZONE that agents also need to make sure they’re not sharing the name and contact details of a referee as this is personal identifiable information of another individual – not the tenant – which they don’t have grounds for sharing with the landlord. Publicly available information relating to court judgements and bankruptcies would be ok to share.

Legitimate interest

For anything else, an agent must ensure they have a reason to share that information by making a legitimate interest assessment. Adds Tillyer: “Should there be a challenge, they will be able to demonstrate their justification to support the action they have taken.”

He says it is best to have clear T&Cs between agent and tenant which set out that any information used in their application for the property, including the tenant referencing, may be shared with the landlord. In the case of rent guarantee insurance, it’s often a condition of the policy that satisfactory referencing has taken place; sharing a copy of the reference would be under the ‘performance of a contract’ lawful basis and therefore acceptable, says Tillyer. “However, best practice would be to extend T&Cs wording to include that sharing the information with the landlord may include for the purposes of insurance.”  

Sensible view

Angharad Trueman, vice president of ARLA Propertymark, believes agents must take a sensible view about reference requests. “The information is of legitimate interest to the landlord and the legal contract is between the tenant and the landlord,” says Trueman. “However, in practice, when information is requested I would always recommend reaching out to the tenant to inform them and have that conversation.”

As many agents may not be completely aware of their responsibilities, Ahmed Gamal, founder of Rentd, advises that one way to negate any breach of GDPR regulations is to allow technology to do the heavy lifting. “With Rentd, the tenant shares information directly with the landlord and only the landlord,” he says. “Once their offer is accepted, the applicants are referenced based on the information provided with their offer.” 

The ICO’s data protection self-assessment checklist is here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tenant referencing queries throw spotlight on data privacy laws | LandlordZONE.

View Full Article: Tenant referencing queries throw spotlight on data privacy laws

Government commits to shop rental auctions

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Despite strenuous objections from industry professionals and landlords, it seems the government is determined to press ahead with its scheme to “solve” the problem of vacant high street premises.

Draft Levelling-up and Regeneration legislation has now been published which includes this controversial measure.

The draft Levelling-up and Regeneration Bill was published on 11 May 2022 and it contains full details of the government’s proposed high street rental auctions process, and how local authorities are to control who landlords can rent to, along with a raft of other property related measures.

The government says the Bill will “unlock new powers for local authorities to bring empty premises back into use and instigate rental auctions of vacant commercial properties in town centres and on high streets.”

Government literature states:

“The Bill will also directly give local leaders the powers they need to regenerate their communities, and transform their high streets and town centres.

“A new infrastructure levy will see the big developers contribute more towards better local roads, schools, hospitals, and genuinely affordable housing.

“Communities will also receive a share of the Levy revenue raised – as long as they have a parish or town council – and we are exploring how this could be expanded.”

The new proposals include:

• New powers for local leaders to run High Street Rental Auctions, where they can auction off tenancies in shops that have been vacant for over a year.

• Councils will be able to double council tax on empty and second homes, “ensuring everyone pays their fair share towards local services and boost levelling up.”
• The ‘al-fresco dining revolution’ will be made permanent, “injecting new life into the high street through creating a sustainable process for communities, business and local authorities, making it permanently cheaper and quicker to get a licence for outdoor dining.”
• A new locally set infrastructure levy, charged on the final value of property when its sold, to replace much of the “broken” S106 payments system. “This will see the big developers contribute far of the money they make from developments towards building better local roads, rail, schools, hospitals, and more affordable housing.”
• Legislation to make it easier for councils to regenerate their town centres through Compulsory Purchase Orders (CPOs), making the process quicker and easier to use.

Designated areas

The local authority will be empowered to designate a street or an area as being important to the local economy because of the concentration of high street uses. These high street uses are defined in the Bill across shops, offices, restaurants and light industrial, but does not include warehouses.

Once an area has been designated as such, any vacant units will be included in the scheme to force letting through a rental auction. This would be where it is considered by the local authority that occupation is beneficial to the local economy, society or environment.

A vacancy is defined in the Bill as a property in one of the designated areas that has been unoccupied for 366 days or more. This raises questions about what exactly is unoccupied, what about pop-up short term licences, what if the owners use it for storage?

By defining premises as the whole or a part of a building or any part that could with reasonably adapted, it seems it would allow a local authority to specify which part is to be let, for example just the ground floor retail unit of a three story building.

How will forced letting work in practice?

The Local Authority will serve a letting notice on the landlord preventing it from letting for up to 10 weeks without the consent of the authority, unless a contract has been already signed with a tenant.

The authority will have control over the landlord’s choice of tenant during the notice period. Any letting must be for at least a year and the will lead to the premises being occupied by “the regular presence of people at the premises.”

If the landlord fails to find a suitable tenant – one acceptable to the local authority within the initial letting notice period, then a process of a countdown to a letting auction begins.

The auction itself will be controlled at the discretion of the local authority in that the authority will ultimately choose the successful tenant: not necessarily the highest bidder.

The legalities

Further clarification is to be forthcoming as to the terms of any lease between the parties, but this, it would seem, has the makings of a legal nightmare: what about pre-tenancy works and who pays for these, how is the rent set and on what basis, for example turnover rents? What about the responsibility for repairs and maintenance, full insuring and repairing lease? What about responsibility for delapidations? What about security of tenure? The list of questions goes on.

These measures, it seems, ride a coach and horses through the Landlord and Tenant Act 1954, legislation that has governed commercial tenancies in England & Wales quite successfully for many years.

Property professionals and landlords have expressed serious misgivings about how this scheme can be made to work with any degree of success, and without causing commercial property owners serious financial losses.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government commits to shop rental auctions | LandlordZONE.

View Full Article: Government commits to shop rental auctions