Landlords leave temporary accommodation market as private rents soar

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An unintended consequence of the Government’s crackdown on the private rented sector has been revealed as councils across London report more landlords withdrawing from the temporary accommodation market for homeless households.

London Councils, which represents the 33 boroughs across the capital, says a lack of rented accommodation within the traditional rented market, and skyrocketing rents, are persuading many landlords to stop offering accommodation for homeless people and instead rent them out to long-term market-rate tenants.

This means councils, who rely in part on this kind of short-term privately-supplied accommodation, are now struggling even harder to house people waiting for long-term affordable accommodation, as they are required to under the law.

Its survey of all 33 boroughs found that 15 reported receiving a Notice to Quit (a legal notice requesting the return of a property) from landlords for 3,531 properties in use as temporary accommodation.

This is a 120% increase on the 1,601 notices received over the same period in 2021-22 and is equivalent to a loss of 6% of London’s total temporary accommodation stock.

Unmanageable

Darren Rodwell (pictured), London Councils’ Executive Member for Regeneration, Housing & Planning, says: “Nobody wants this happening, but boroughs face a complete lack of other options for keeping a roof over an increasing number of homeless families’ heads.

“The homelessness situation in London is becoming unmanageable.

“We need the government to treat this as the emergency it is and work with us in reversing the numbers relying on temporary accommodation.”

London Councils is calling on the Government to raise the Local Housing Allowance, which has been frozen since 2020; support councils to buy accommodation sold by private landlords; boost Homelessness Prevention Grant funding and increase Discretionary Housing Payments.

View Full Article: Landlords leave temporary accommodation market as private rents soar

Bristol reveals big expansion in landlord property licencing across city

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All Bristol landlords could soon have to licence small HMOs, while those in the Bishopston and Ashley Down, Cotham, and Easton wards are bracing themselves for a proposed selective licensing scheme.

The council has launched a consultation on plans to drive up standards as it reports that previous licensing schemes have proved a success.

The first discretionary scheme ran from 2013 to 2018 in the Stapleton Road area and licensed 1,207 properties. Of these, 396 properties had at least one serious hazard resolved, 845 required improvements to meet licensing conditions, and 10 landlords were prosecuted for 37 offences.

The Eastville and St George selective and additional licensing scheme ran from 2016 to 2021, issuing 3,316 licences. It reports that 3,019 properties were improved to meet licensing standards, and 675 had fire safety improvements made. An additional HMO licensing scheme is now in place in 12 central Bristol wards, which will run until July 2024, alongside Horfield, Bedminster and Brislington West, which were added last April. 

Protections

Councillor Tom Renhard (pictured), cabinet member for housing delivery and homes, says it will write to landlords and tenants during a consultation on the additional and selective schemes that closes on 7th November.

He promises landlords will be offered advice and guidance on the improvements required to ensure their properties comply with licensing conditions.

Renhard adds that those in private rented accommodation have lived for too long without adequate protections and very limited options to guarantee decent living standards.

“While we know that the majority of landlords offer good quality homes and have positive relationships with their tenants, these additional measures would allow us to take action where this is not the case,” he says.

The council has also been investigating the impact of rent regulation across the city.

Take part in the consultation.

View Full Article: Bristol reveals big expansion in landlord property licencing across city

Gove to speak at landlord conference – but will he reveal all about his reforms?

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Landlords hope housing secretary Michael Gove will update them on the Renters Reform Bill when he takes top billing at the NRLA’s national conference later this year.

The minister has signed up as keynote speaker at the one-day event, chaired by the BBC’s Clive Myrie, in Birmingham’s National Conference Centre on 24th October.

First proposed in 2019 and finally announced in May, the Bill is making slow progress through Parliament – now at the second reading stage – but will significantly impact landlords and tenants across England when it finally receives Royal Assent, probably next year. 

More clarity

Gove could provide more clarity on the strengthening of Section 8 evictions if landlords have a legal reason to end a tenancy early and the new mandatory grounds when their circumstances change. Many are also unclear about when they could reasonably deny a tenant’s request for a pet under proposed changes to the current law.

Other areas up for debate are the creation of a mandatory ombudsman – known as the landlord redress scheme – to oversee disputes between landlords and tenants outside courts and possible mediation services, as well as a new property portal.

NRLA chief executive Ben Beadle (pictured) says the event is for all those with an interest in the private rented sector.

He adds: “Most importantly though, it is an ideal opportunity for the Secretary of State to set out his plans to ensure a thriving private rented sector. I hope that he will also be informed by the views of the 500-plus landlords and letting agent delegates already signed up to attend, who are doing great work in difficult circumstances.”

The day will also give attendees updates on mortgages, investment and finance, and briefings on many other industry-relevant topics. Places are still available.

View Full Article: Gove to speak at landlord conference – but will he reveal all about his reforms?

UPDATE – Legal principles – what are Common Law Tenancies?

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Property law in England has its roots in antiquity. Despite the long slow and incremental process of common law decisions made by judges over hundreds of years, tradition and precedent are overruled by statutory (Parliament made) rules. Statutory rules always over-ride the common law, and contractual agreements made between parties.

Seemingly endless laws, brand new rules and regulations, continually pour out of Parliament as and when Government deems them necessary. Currently we eagerly await the revelations when the major reforms of the Renters (Reform) Bill 2022-23, currently progressing through Parliament, become law.

Under the English legal system tenancy laws are a curious mixture of the law of contract, established common law or property law, and statutory rules. As a landlord it helps if you have a basic understanding of how the system operates.

Common law tenancies are one type of established tenancy which are based on long established property and contract law. These are tenancies that fall outside the scope of the existing statutory rules, for example the Housing Acts (1988, 1996, 2004) and many other Acts older of Parliament. They include Regulated Tenancies (Rent Act Tenancies), Assured (AT) and Assured Shorthold Tenancies (ASTs). Common law tenancies apply only in specific circumstances.

When does a Common Law Tenancy apply?

There are a number of tenancy situations where the law says an Assured or an Assured Shorthold tenancy cannot exist. This is even when a tenancy agreement is described at its head as a AT or Assured Shorthold Tenancy – the law says it cannot be created.

The most common form of Common Law residential tenancy is a tenancy granted by a resident landlord – i.e., where the landlord lives in the same building as the tenant but lives separately, usually an annex or separate flat. Here, the landlord does not share facilities with the tenant as they would in a lodger arrangement.

Additionally, these other common situations cannot be Assured or Assured Shorthold for:

– a tenancy for a limited company
– when no rent is payable, a low rent of less than £250 or a high rent of more than £100,000 is payable.
– where the tenant does not reside in the property as their main residence – Assured and Assured Shorthold Tenancies are dependent on the tenancy being the tenant’s main residence.

Agreed between the parties

In the case of a common law residential tenancy the tenant’s rights and obligations are mainly dependent on the terms agreed between the parties (written into the agreement), and therefore similar to a commercial lease, they are contractual or “non-statutory contractual tenancies” as opposed to those being regulated by statute. They offer fewer protections and rights to their tenants.

Commercial (business tenancies) are similar as they are contractual but businesses have the added protection of the Landlord and Tenant Act 1954, which affords some security of tenure (succession rights) for a businesses on renewal – when the fixed term comes to an end these statutory rules kick in.

Any residential tenancy where the rent equates to an annual rate in excess of £100,000 pa (previously £25,000 set in 1990 and increased in October 2010) is excluded from the Housing Act Tenancy (AT or AST) rules and therefore must be a common law tenancy.

Alternatively, where a limited company rents a residential property (usually for their employees) the tenancy will fall outside the scope of the Housing Acts – again it’s a common law tenancy.

Often, companies rent residential accommodation and let the property to their employees, usually under a licence agreement (as opposed to a tenancy). The employee pays rent and other costs to the landlord, but ultimately the company is liable. Rent-to-rent arrangements fall into this category and often result in legal difficulties if the agreements between the three parties are not set-up correctly.

Joint Tenancies and The Common Law Tenancy

A rental rate of £100,000 pa may seem quite a lot, but this also applies to join tenancies where the combined rent of all the sharers (such as students) is included in this total – £8333.33 per month is the limit.

Note: A tenancy for 6 months can still be a high-rent tenancy if the rent exceeds the rate of £8333.33 per month.

Implications for Landlords – Common Law Tenancies

The implications of common law tenancies are:

(1) a different tenancy agreement from the usual AST will be required, and

(2) any deposit taken is not subject to the requirements of the Deposit Protection Scheme under the Housing Act 2004.

(3) the rules governing re-possession under the Housing Acts do not apply.

Stamp Duty Land Tax (SDLT) is not payable unless the the lease Net Present Value exceeds the SDLT at a certain threshold (see the SDLT rules). Below this threshold, the vast majority of private tenancies escape SDLT.

Security of Tenure – Common Law Tenancies

Common Law Tenancies do not afford tenants the same protection regarding security of tenure and statutory continuation as do Assured Tenancies (including Shorthold Assured Tenancies).

Therefore the AST section 21 and section 8 notices and possession procedures do not apply, and the letting operates on the literal wording of the Tenancy Agreement. Similarly, the Deposit Protection (DPS Scheme) rules do not apply.

The tenancy agreement should specify circumstances in which either party bring the tenancy to an end during the fixed term – usually if the tenant is in breach of the agreement. At the end of the fixed-term, the landlord is entitled to possession of the property.

Where the tenancy periodic, the agreement should state that the landlord can end the tenancy by serving a simple notice to quit.

However, despite this the Protection from Eviction Act 1977 still applies, meaning that in the case of a common law residential tenant refusing to leave, a court order will be required.

Ending an Assured Shorthold Tenancy

With an Assured Shorthold Tenancy (AST) the landlord is entitled to a possession order at the end of a tenancy fixed-term if he has correctly served 2 months’ notice by way of a s.21 notice.

In the case of a breach of contract during the fixed-term the landlord would need to prove at least one or more of the prescribed reasons (grounds for possession) laid down in Housing Acts 1988 and 1996, and seek action by way of a s.8 notice. To evict successfully under s.8 (which can be difficult) the landlord must obtain a possession order from the local county court.

It is proposed that Section 8 will become the only the basis for evictions in ASTs when the Renters Reform Bill 2022-23 becomes law. In other words, it will be incumbent on the landlord to prove one of the ground for possession under section 8, as opposed to the automatic right to possession under Section 21. Eviction will normally involved a court hearing before a judge.

Bringing a Common Law Tenancy to an End

With a Common Law tenancy the landlord is entitled to possession at the end of the fixed-term. In theory the landlord is not required to serve a notice to quit to bring the tenancy to an end as the tenancy ends at the agreed date, but in practice the landlord should serve a notice if he wishes the tenant to vacate.

Also, if there are problems during the tenancy, the landlord can bring the common law tenancy to an end where there has been a breach of any of the specified terms in the tenancy agreement. The landlord is not restricted to the prescribed terms (grounds) laid down in Housing Acts.

Statutory Protection for Common Law Tenants

A residential common law tenant still has some statutory protection in that tenants cannot be evicted against their will unless the landlord obtains a court order (Protection from Eviction Act 1977).

Common Law Tenants will also get protection under the Unfair Terms in Consumer Contracts Regulations 1999, where they have entered into a standard form (pre-printed) tenancy agreement.

They will also benefit from some other statutory provisions including the landlord’s repairing obligations under the Landlord and Tenant Act 1985.

Common Law Tenancy Agreements

Landlords or Agents letting to high-rent tenants (above £100,000), company residential tenants or rent to rent arrangements should seek legal advice to ensure they are using correctly drawn agreements.

View Full Article: UPDATE – Legal principles – what are Common Law Tenancies?

Generation Rent appeals to mortgage lenders not to evict tenants

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In a bid to safeguard tenants facing potential homelessness when a landlord falls into BTL mortgage arrears, one tenants’ rights group is urging mortgage lenders to uphold their ‘moral obligation’ not to evict tenants.

The call comes from Generation Rent and its chief executive

View Full Article: Generation Rent appeals to mortgage lenders not to evict tenants