Leading landlord figures pick holes in renting reform White Paper

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Landlord group leaders have begun picking holes in the government’s radical Renters Reform Bill white paper.

While welcoming some of the proposals, Portsmouth & District Private Landlords Association chair, Martin Silman (pictured), believes removing Section 21 notices could spell disaster if problems with the courts aren’t fixed too.

He also points to potential problems for student landlords following a move to allowing tenants to give just two months’ notice.

“They need to put a loophole for students who have to be on a fixed-term contract otherwise the whole model falls apart,” he tells LandlordZONE.

“You need the confidence that students will leave at the end of the academic year – if one of them decides to stay on for a few months, you couldn’t operate as a student landlord.”

Silman believes this could also create an issue by combining tourists with tenants needing a house as it would be cheaper to stay in an HMO for a couple of months (by moving in and then giving notice) than in some Airbnbs.

“It will mean that those looking to move back to an area or wanting to come here more permanently but who have not yet secured a job will no longer easily find accommodation.”

Giving notice soon after moving in could be damaging for many landlords who might have paid a letting agent up to £1,000 to find a family, agrees Giles Inman (pictured), business development director at EMPO, who says many anxious landlords will be making some serious decisions if these proposals come to pass.

He believes the suggestion about using an ombudsman for mediation would be largely ineffective. “99% of the time our members have to evict tenants due to arrears, so usually the relationship has broken down completely and no level of mediation would bring it back on track,” he tells LandlordZONE.

On the subject of being forced to take pets and for tenants to get insurance, Inman is also unconvinced.

“Pet insurance doesn’t cover damage over time such as scratching which is most common, just single incidents. Landlords would get scared if they can’t say no to a massive dog. It would be more logical to ask for a deposit for pets.”

Read the White Paper in full.

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All rise! With the cost-of-living soaring, how can DIY landlords protect their income? The experts at Belvoir advise…

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There is no escaping just how much stress the huge increases in the cost of living is causing everyone, but what can landlords do to try and protect their income and their investments? Tenants who find themselves struggling to pay their rents can leave landlords with the challenges of still having to pay mortgages and finance the other associated costs of owning a Buy to Let portfolio. If the situation continues for a long period and rent arrears continue to mount up it may become necessary to initiate costly eviction procedures. So what can be done to help ease the situation?

At a time when households are being squeezed to the limit, the question of whether or not to increase rents is an emotive and sensitive subject, with so-called ‘greedy landlords’ often blamed for exploiting a difficult situation. In reality, far from being part of the problem, landlords are very much part of the solution to the UK’s current housing crisis. It is a fact that rents are subject to supply and demand, and rents have risen significantly in recent months, but it is a highly localised picture with rents varying from region to region. If you are currently a DIY landlord, have a chat with a professional agent who will be able to advise on the current rental value of your investment. Other factors for DIY landlords to consider are the costs of finding a new tenant, although in such a buoyant market with unprecedented demand it is unlikely that good quality rental accommodation will remain empty for long. Importantly, by working with an agent you can take advantage of their extensive marketing and referencing processes to ensure you find the best tenants for your Buy to Let property as quickly and effectively as possible. Landlords who work with agents can also have the peace of mind of knowing that they are legally compliant, and not likely to face hefty fines for breaches of regulations.

For additional peace of mind, it is advisable for landlords to consider investing in a rental guarantee package, which has the backing of a reputable specialist insurer. A rent and legal expense guarantee will ensure that landlords continue to receive monthly rents regardless of the tenant’s ability to pay. Should tenant eviction from a property become necessary at any point this can result in an extremely and lengthy procedure but investing in insurance can ease the stress by covering the costs of the agent to prepare all necessary paperwork and attend court on your behalf. Belvoir’s rent guarantee offers zero excess and 100% rent protection.

Now is the perfect time for landlords to review the financing of their portfolio. If landlords have a Buy to Let mortgage it is worth talking to Belvoir as we work closely with Mortgage Advice Bureau.

At present there are no signs of any easing of the cost-of-living crisis. However, in May 2022 Chancellor Rishi Sunak announced a £15 billion support package, which aims to offer some respite in the autumn for households who are struggling to pay for their homes to be heated. A temporary windfall tax on energy companies is enabling the government to fund the payment of a £400 non-repayable grant for all households to help pay their energy bills. In addition, later this year targeted support is being made available for pensioners, as well as people with disabilities and those on low incomes. It is hoped that even more support may be made available in the future, but in the meantime communication with tenants is key to ensuring that any problems are highlighted early, and any necessary steps are taken to ensure that debts do not mount up. A professional agent will be able to negotiate with tenants calmly to help defuse a difficult situation, and report back to the landlord so that all parties are aware of any potential problems and can focus on finding the best solutions for all concerned.

To find your nearest Belvoir office visit: www.belvoir.co.uk

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – All rise! With the cost-of-living soaring, how can DIY landlords protect their income? The experts at Belvoir advise… | LandlordZONE.

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LSA warns landlords: recession is coming

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Recession is looming around the corner. It’s an unavoidable topic, and smart landlords are reacting fast. A report by Propertymark found a massive spike in landlords getting out of the rental industry and that 53% of buy-to-let properties sold in March 2022 left the private rented sector (PRS) completely.

View Full Article: LSA warns landlords: recession is coming

LATEST: Renting reform White Paper – its full shocking proposals go live

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The Government has finally published its renting reform White Paper three years after it was first promised, with legislation based on its proposals not due until at least next Spring.

Introduced in parliament by housing minister Eddie Hughes (main picture) but prefaced by his boss Michael Gove, it claims to be both a game-changer for renters but also assumed that not all landlords are rogue or irresponsible and that most offer good accommodation and take their responsibilities seriously.

“We want to change the UK’s reputation as a place to both rent and own a home,” Hughes told MPs. “And we want renters to have the same peace of mind that owning your home gives.”

After months of drip-drip leaks and vague ministerial statements, the full meat of the White Paper is now there for all to see.

Within it Gove says: “This White Paper builds on the vision of the Levelling Up White Paper and sets out our plans to fundamentally reform the Private Rented Sector and level up housing quality.”

12-point plan

The White Paper outlines a 12-point plan of action. These are to ensure all PRS homes in the UK meet the Decent Homes Standard, running selective local authority pilot schemes to bolster policing of bad landlords, removing landlords’ rights to evict tenants ‘without fault’ and then give them more powers to evict, but only for set reasons.

Rents will only be allowed to increase once a year, and tenants will be able to take poorly-performing and rogue landlords to a single Ombudsman to gain redress, a scheme that all landlords will have to join and pay for.

It also promises to reduce the courts’ backlog for evictions as well as a property portal for all UK rented homes that will include information from the official rogue landlord database and details of a landlord’s compliance.
It could also be used to stop landlords from renting out properties that do not meet minimum standards.

“Mandating landlords to take a proactive approach to property management would benefit those good landlords who already meet basic requirements while simplifying enforcement for local councils and hitting criminal landlords hard,” the document says.

Careful balancing?

“We are committed to carefully balancing landlords’ privacy concerns with the need of private tenants to make informed decisions about their housing options when designing a new system.”

Investigative powers for local authorities are also being increased, as are fines, while agents and landlords will be prevented from refusing tenants on benefits without good reason, and tenants who want to live with their pets will have a ‘right’ to do so, albeit subject to a reasonability test.

Lastly, the government will work with companies to develop a ‘renting passport’ to enable poorer tenants to move home without having to stump up two deposits.

But the most radical changes are those around tenancies and tenure.

Fixed-length tenancies

The document reveals that Ministers plan to give private landlords six months’ notice of its first implementation date, after which all new tenancies will be periodic and governed by the new rules, ushering out ASTs.

By periodic, the government means fixed-term tenancies that will be pre-agreed between landlord and tenant, with tenants required to give two months’ notice at any time during that period, and landlords only able to evict them under circumstances including both ‘fault’ (i.e. rent arrears or anti-social behaviour/damage) or no-fault (i.e. to move back into a property or sell it).

“Periodic tenancies will also enable tenants to leave easily without remaining liable for the rent in unsuitable and unsafe accommodation,” the document says.

Read the White Paper in full.

Reactions

“Having waited three years for this White Paper, we had a good idea of what the rental reforms would look like, and I welcome the Government’s intention to improve the private rented sector to make it more robust and fairer for both landlords and tenants for the long-term,” says Eddie Hooker, CEO of the Hamilton Fraser Group, which operates industry schemes such as Total Landlord Insurance, the Property Redress Scheme and Client Money Protect.

“A more effective legal framework will ultimately help to create a more stable market for landlords to invest in. These proposals confirm the direction of travel, but the devil will be in the detail of the legislation. 

“Giving more power to the tenant, for example by restricting the rights of landlords to determine when a tenant should actually have to vacate at the end of a tenancy and to force landlords to accept renters that are on benefits, no matter how temporary, could send a signal that investing in the private rental sector is an uncertain and undesirable endeavour.

Driving up rents

“It’s vital that the eventual legislation doesn’t deter landlords from the sector as this will cause more landlords to exit, exacerbating an existing shortage of rental homes and driving up rents at a time when interest rates are rising faster than they have done in decades, and when people can least afford it. 

“Whilst landlords are frequently portrayed as fat-cat institutions that have no regard for tenants, the truth is that most are decent people with just one or two investment homes which form part or all of their income or retirement plans and to continue to squeeze them would be counter-productive.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Renting reform White Paper – its full shocking proposals go live | LandlordZONE.

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Renters Reform White Paper – Full details published

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The fairer private rented sector white paper has been published today (16 June 2022).

Section 21 evictions will be outlawed. The Government’s claim is that more than a fifth of private renters who moved in 2019 and 2020 did not end their tenancy by choice

View Full Article: Renters Reform White Paper – Full details published

The detail to follow must retain the confidence of responsible landlords

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Responding to the publication today of the Government’s White Paper on reform of the private rented sector, Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“Whilst headline commitments to strengthening possession grounds, speedier court processes and mediation are helpful

View Full Article: The detail to follow must retain the confidence of responsible landlords

Rented sector faces ‘biggest shake-up in decades’ as homes move to heat pumps

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The next decade will see the biggest shake-up of the heating sector in living memory as the country’s homes switch to heat pumps, says the sector’s trade body.

To achieve the planned phase-out of new fossil fuel boilers by the mid-2030s and to meet the government’s target of 600,000 heat pumps being installed annually by 2028, the Heat Pump Association is calling for a strong partnership between industry and government.

Its report, Transforming Britain’s Heating – A Pathway to Heat Pumps, suggests that policies could include making homes heat pump-ready by requiring room-by-room heat loss calculations and by hydraulic balancing and recalibrating existing boiler systems to lower flow temperatures to a maximum of 55 deg C.

Landlords soon face making decisions about whether to fork out for retrofit works if government proposals that new tenancies will have to reach an EPC band C by 2025 get the go-ahead.

In the meantime, recent reports show that ground source heat pump installation costs can add up to an eyewatering £35,000, and are incompatible with most homes.

Higher costs

The association says it recognises that the installed cost of heat pump systems is higher than replacing a fossil fuel boiler alone, but believes that as volumes increase, costs are likely to come down.

It adds that while subsidies offsetting upfront costs through the Boiler Upgrade Scheme and the zero-rated VAT currently play an important role, some form of extra subsidy will be needed until the transition is complete.

Chair Phil Hurley (main picture) says: “Significant investments in UK manufacturing and installer training have already been made in response to some of the signals government has given so far. Further clarity of the policy framework will unlock the remaining investor confidence needed to finish the job.”

The document also sets out some of the ideas for how the partnership can work to support a new generation of apprentices in becoming part of the government’s 2030 target for 480,000 high-skilled jobs.

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REVEALED: Details of historic ‘new deal’ for tenants and landlords published by Government

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Key details of the Government’s radical renting reform White Paper have been released this morning by Michael Gove, full details of which are due to be published when his housing minister Eddie Hughes addresses parliament later this morning.

In a statement embargoed for midnight, Gove’s Department for Levelling Up, Housing and Communities (DLUHC) promises the ‘biggest shake-up of the rented sector for 30 years’ targeted at the 21% of private rented sector tenants who ‘currently live in unfit homes’.

Following today’s announcement, which has an eye on the next election, the PM’s levelling-up agenda and the cost of living crisis, DLUHC says it proposes to introduce its Renters Reform Bill before March next year.

The radical proposals, the full nitty-gritty of which are to come, include:

• Outlawing ‘blanket bans’ by agents or landlords on renting to families with children or those in receipt of benefits;
• For the first time, ending the use of arbitrary rent review clauses, restricting tribunals from hiking up rent and enabling tenants to be repaid rent for non-decent homes. This will make sure tenants can take their landlord to court to seek repayment of rent if their homes are of an unacceptable standard
• Making it easier for tenants to have pets in their homes by giving all tenants the right to request a pet in their house, which the landlord must consider and cannot ‘unreasonably refuse’.
• All tenants to be moved onto a single system of periodic tenancies, meaning they can leave poor quality housing without remaining liable for the rent or move more easily when their circumstances change. A tenancy will only end if a tenant ends or a landlord has a valid reason, defined in law. 
• Doubling notice periods for rent increases and giving tenants stronger powers to challenge them if they are unjustified
• Giving councils stronger powers to tackle the worst offenders, backed by enforcement pilots, and increasing fines for serious offences.

But the White Paper will also include some measures designed to placate landlords, including (as previously announced):

• A new Private Renters’ Ombudsman to enable disputes between private renters and landlords to be settled quickly, at low cost, and without going to court
• Ensuring responsible landlords can gain possession of their properties efficiently from anti-social tenants and can sell their properties when they need to. 
• Introducing a new property portal that will provide a single front door to help landlords to understand, and comply with, their responsibilities as well as giving councils and tenants the information they need to tackle rogue operators.

Housing secretary Michael Gove says: “For too long many private renters have been at the mercy of unscrupulous landlords who fail to repair homes and let families live in damp, unsafe and cold properties, with the threat of unfair ‘no fault’ evictions orders hanging over them. 

“Our New Deal for renters will help to end this injustice by improving the rights and conditions for millions of renters as we level up across the country and deliver on the people’s priorities.”

What does everyone think so far?

Ben Beadle (pictured), Chief Executive of the National Residential Landlords Association, which has been busy lobbying the government on many aspects of the White Paper including court reform and evictions, says: “Whilst headline commitments to strengthening possession grounds, speedier court processes and mediation are helpful, the detail to follow must retain the confidence of responsible landlords, as well as improving tenants’ rights.

“We will be analysing the Government’s plans carefully to ensure they meet this test. A failure to do so will exacerbate the housing crisis at a time when renters are struggling to find the homes they need.

“The eventual legislation needs to recognise that government actions have led to a shortage of supply in the sector at a time of record demand. It is causing landlords to leave the sector and driving up rents when people can least afford it.”

Polly Neate (pictured), Chief Executive of Shelter, says: “The Renters’ Reform Bill is a gamechanger for England’s 11 million private renters. Scrapping unfair evictions will level the playing field. For the first time in a long time, tenants will be able to stand up to bad behaviour instead of living in fear. 

“This White Paper promises people safety and security in their home, and it makes clear that landlords need to play by the rules. Gone will be the days of families being uprooted and children forced to move school after being slapped with a Section 21 no-fault eviction for no good reason.”

Nathan Emerson (pictured), CEO of Propertymark says: “After waiting three years to see exactly what this reform will look like, we’ve now got a set of proposals titled ‘The Fairer Private Rented Sector White Paper’. But there are some elements that don’t appear to be so.

“How is it fair that a tenant can simply end a tenancy at a time of their choosing, but an agent or landlord has to present a valid reason that is defined in law?

“Now we have the detail of what’s being proposed, we will be closely scrutinising it and working with Ministers to help them understand how on a practical level it will impact our letting agents members and their landlords.”

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