Welsh landlords & agents have serious misgivings about longer notice periods

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The way that private rented sector (PRS) landlords operate their properties in Wales is going through one of the biggest changes in decades as the Welsh Government, under its devolved powers, pass and implement the Renting Homes (Wales) Act 2016.

This Act is to take effect from the 1st December 2022, while the Welsh Government has confirmed the extended notice period for existing tenancies will take effect from 1 June 2023. The six-month notice period already applies to new contracts starting from 1 December 2022.

Tenants are to be referred to as contract holders, tenancy agreements as occupation contracts with “written statements”, and new rules are to ensure that rental properties are “Fit For Human Habitation”.

The changes are radical and many aspects of the current legislation will change drastically, from the extended notice periods, extended succession rights, joint contracts, to changes to landlords’ rights when properties are abandoned.

The Renting Homes (Wales) Act was originally due to come into force on 15 July 2022 but was pushed back until 1 December 2022 last May.

Deep concerns from landlords and agents

The changes being introduced by the Welsh Government follow along a similar but not in an identical vein to those introduced in Scotland – Private Housing (Tenancies) (Scotland) Act 2016. England could soon be followed suit with the Renters’ Reform Act, most likely to be enacted in 2023.

The Welsh Government claims the legislation will improve security of tenure for renters by, amongst other reforms, increasing the notice period for landlords seeking repossession of their properties, usually when the renter in not in breach of contract, the no fault eviction case.

The new rules have been described as the biggest change in Welsh housing law for many decades, with the old concept of a tenancy being replace by what is termed “statutorily regulated occupation contracts.”

However, while landlords coped with goodwill and flexibility with extended notice periods during the Covid, they are far less comfortable and less willing to accept a Government perusing this as a permanent change.

Objections to a permanent change

Speaking for letting agents, Tim Thomas, Policy and Campaigns Officer for Propertymark, has said of the change:

“Letting agents and their landlords showed great flexibility at the outset of the pandemic in their support of extended notice periods, but again we have a government pursuing permanent changes to what were supposed to be temporary measures.

“The Welsh Government says extending notice periods for existing tenancies from June is necessary to bring down the rising cost to taxpayers of temporary accommodation. What it fails to understand is the knock-on effect this strengthening of tenants’ rights will have on the confidence of landlords.

“New tenancies will also have to comply by 1 December.

“The private landlords our member agents represent have become important housing providers, but they need to know they can regain possession of their property when they need to do so.

“The best way to support tenants is to focus on policies that can increase the supply of housing rather those that will constrain it.”

Despite the vast majority (90%) of landlords and letting agents responding to a recent Welsh Government consultation exercise being strongly against extending the six-month notice periods to existing tenancies, the change is to go ahead.

Conversely, tenant representative bodies, as might be expected, responded to the consultation very much in favour of the proposed extension, with the overwhelming majority favouring a 1 December start rather than waiting until June next year.

Propertymark the letting agents representative body has strongly objected to the Welsh Government’s consultation proposal to extend the notice period required which will extend existing periodic standard contracts, from two months to six months, under section 173 of the Renting Homes (Wales) Act.

In the body’s consultation response to the Welsh Government it outlined its recognition of the importance of security of tenure, especially for vulnerable groups. However, as it explains, “…we raised caution about the lack of supply in the Private Rented Sector (PRS) and how it would drive more landlords to sell up and leave the sector. This could mean reduced housing options for the most vulnerable and increased rents for tenants who remain in the sector.”

The Welsh minister with responsibility for housing, Julie James has responded by saying:

“The proposed extension of the six-month no-fault notice period was always going to generate highly contrasting views.

“Whilst noting the views of those landlords and agents that responded, I have decided that the societal and individual benefits accruing from the extension outweigh the negative impact on individual landlords, particularly in view of shorter notice periods of one month or less applying where there is a breach of contract.”

Regulations implementing the Renting Homes (Wales) Act (2016)

Regulations 2022 Renting Homes (Wales) Act 2016 (Consequential Amendments to Secondary Legislation) (Amendment)

Regulations 2022 Renting Homes (Fitness for Human Habitation) (Amendment) (Wales) Regulations 2022

Renting Homes (Rent Determination) (Converted Contracts) (Wales) (Amendment)

Renting Homes (Wales) Act 2016 (Saving and Transitional Provisions) Regulations 2022

View Full Article: Welsh landlords & agents have serious misgivings about longer notice periods

Answering Your Tax and Accounting Questions

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We’ve filmed a fair few episodes of The Property Tax Show now and as expected we have a ton of questions flooding in.
01:04 – Should I Register For VAT To Reclaim VAT On My Purchase?
02:04 Do I Need To Revalue My Property Every Year For My Accountant?
View Full Article: Answering Your Tax and Accounting Questions

Eviction – Judge thinks non-existant deposit should have been protected?

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Finally had enough of a bad tenant – constantly behind on his rent. I issued him with a Section 21 notice in December 2021. Naturally, he ignored the deadline to leave by mid-February 2022. He took me to court for wrongful eviction.

View Full Article: Eviction – Judge thinks non-existant deposit should have been protected?

Council tax bills equate to 37.5% of a tenant’s rent

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With rumours that the Government might be about to increase council tax bills in its Autumn Statement comes news that hard-up tenants are already paying council tax equivalent to 37.5% of their rent.

Ocasa, the specialist rental platform

View Full Article: Council tax bills equate to 37.5% of a tenant’s rent

Propertymark slams extension to no-fault notice periods in Wales

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All new tenancies in Wales from 1 December will have a statutory six-month no-fault notice period, while existing tenancies that convert to occupation contracts will see the extension under the Renting Homes (Wales) Act 2016 take effect from 1 June next year.

View Full Article: Propertymark slams extension to no-fault notice periods in Wales

Govt still ‘probing selective licensing’ three years after PRS consultation

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The government has been forced to admit that it is still considering the results of a consultation into selective licensing which ended three years ago.

Disgraced former Housing Minister Christopher Pincher (pictured)pressed the government to defend the schemes in his first question about housing since prompting the resignation of Boris Johnson.

The now independent MP asked what assessment it had made of the effectiveness of local authority enforcement of selective licensing designations and other existing measures against PRS landlords.

Housing Minister Felicity Buchan said: “We are also currently assessing the recommendations from the 2019 independent review into the effectiveness of selective licensing and will respond in due course. We will work with local authorities to gather more information about their selective licensing schemes to ensure they are continuing to deliver the intended outcomes and to help share best practice.”

Pincher also called on Housing Secretary Michael Gove to assess the potential impact of repealing Section 21 on the student housing market.

Reforms

Buchan replied it wanted as many tenants as possible to benefit from its proposed reforms, including students living in the private rented sector. Landlord groups have criticised periodic tenancies for discriminating against student landlords.

“We expect most students will continue to move in line with the academic year. We will continue to consider the impact of our reforms as we move towards legislation and will publish an impact assessment in due course,” she added.

Pincher – who served as Housing Minister for two years until February – quit as deputy chief whip in June amid allegations he sexually assaulted two guests at a London club.

There swiftly emerged revelations that then-Prime Minister Boris Johnson had ignored earlier accusations of sexual misconduct against Pincher before his appointment.

View Full Article: Govt still ‘probing selective licensing’ three years after PRS consultation

Unprotected deposit claim – 6 year rule?

admin    Uncategorized     agents

Hello, The 6 year rule? From the date of contract on an ex-tenant who is claiming compensation of £4-12k on 7.5 years on a tenancy that has now ended. They left on their own accord.

What should a landlord do after receiving a letter from the ex-tenant’s solicitor with threats?

View Full Article: Unprotected deposit claim – 6 year rule?

HMRC is targeting residential landlords with ‘nudge letters’

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HMRC is targeting residential landlords in its latest ‘nudge campaign’ that it suspects are not declaring their full rental income, warns tax advisers Kreston Reeves.

The campaign comes in advance of Jeremy Hunt’s first Autumn Statement and rumours of a further attack on residential landlords with higher rates of Capital Gains Tax (CGT) on property disposals and higher rates of National Insurance.

View Full Article: HMRC is targeting residential landlords with ‘nudge letters’

Average house price falls £4,159 in a month

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The average price of a property in the UK fell by 1.1% or £4,159 in October, data from Rightmove reveals.

And despite the weight of financial uncertainty, the fall is in line with the average 1.1% drop recorded in November during the pre-pandemic years of 2015-2019.

View Full Article: Average house price falls £4,159 in a month

Landlords slam London Mayor for excluding them from ‘rental summit’

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The NRLA has slammed London mayor Sadiq Khan for holding an emergency summit on the private rented sector without inviting any landlords.

Khan’s summit in the capital today will bring together private renters, charities, advocacy groups and politicians to address issues facing renters – but no landlord groups.

NRLA chief executive Ben Beadle (pictured) says it is disappointing in the extreme that the mayor feels he can solve the challenges faced in the capital’s rental market without any input from those who actually provide homes.

“The stark and simple reality is that whilst the demand for private rented housing in London continues to increase, the supply of such homes is falling,” says Beadle.

“This is a direct consequence of government policy aimed at shrinking the size of the sector, along with rhetoric from the mayor that suggests private landlords are simply a problem to be managed.”

Tinkering

He adds that if the mayor wants to address the cost pressures faced by households across London, he needs to focus on boosting the number of homes available.

“Anything else would merely be tinkering with the symptoms of the challenges in the rental market, without tackling the root cause of them.”

The mayor’s office reports that the average advertised London rent has hit £2,343 a month, which is more than double other parts of the country.

Khan insists: “Ministers must take this crisis seriously and act now. There is no time to waste so we have come together today to speak with one voice.

“Our demands to ministers are simple: implement your long-promised renters reform legislation and take action now to make rents more affordable for Londoners, using all powers at the government’s disposal.”

View Full Article: Landlords slam London Mayor for excluding them from ‘rental summit’