Rental deposit alternatives catching on as interest rates and rents rise – claim

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Growing numbers of tenants are turning to deposit alternative products as inflation, high rents and interest rate rises make it more attractive to hold on to their money to spend or invest.

Reposit CEO Ben Grech (main picture) says that rising inflation has eaten away at a typical deposit while it remains locked up.

“Many tenants would rather put their money to better use right now such as helping to pay for the rising costs of living,” he tells LandlordZONE.

“With Reposit, tenants are obliged to pay only one week’s rent, giving them the flexibility to either spend the remaining sum – equivalent to four weeks’ rent – or save it and benefit from the interest.”

Landlords get up to eight weeks’ worth of rent as protection against dilapidations and rent arrears.

Recession

Adds Grech: “As we go into a time of recession and higher cost of living, the rent arrears claims are the larger claims, so our offering becomes very compelling for landlords and agents.”

As a result, Reposit reports that more agencies are signing up to offer its deposit alternative product, helping to contribute to an almost 600% growth in sales during the last four years – despite a downturn in tenancy volume across the lettings market. The firm believes this shows how deposit alternative products have become more integrated into the rental market.

Goodlord’s tenancy data reveals that in early August, tenancy volume was at 94% compared with 107% in 2019, illustrating that the lettings market has still not fully recovered to pre-Covid levels. Meanwhile, Reposit sales have grown 596% in that time.

One of the latest letting agencies to sign up is Morfitt Smith in Sheffield where director Paul Batty explains: “We rolled Reposit out to all existing tenancies and it was very well received, a significant number wanted to switch, especially those in long-term tenancies.”

Read more: What are a landlord's duties when taking cash deposits?

View Full Article: Rental deposit alternatives catching on as interest rates and rents rise – claim

Has Paragon Bank Advised You To Consider Incorporation?

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We understand that Paragon Bank is now interviewing some if not all new clients who are applying for new BTL mortgages and that one of their questions is whether incorporation has been considered.

We want to understand this better

View Full Article: Has Paragon Bank Advised You To Consider Incorporation?

Selective License and DBS check?

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Hello, I am having to get a DBS (Disclosure and Barring Service, I’m not sure of all the abbreviations for lettings etc.,) for my Selective License. I emailed the council, asking what the point was, and if I had a criminal record

View Full Article: Selective License and DBS check?

‘Build-to-Rent doesn’t cherry pick posh tenants’ insists leading figure

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The boss of a build-to-rent (BTR) property search website has insisted the sector is not out to only attract more affluent tenants, despite criticism in the past that it does.

Love to Rent founder Anne-Marie Brown (main picture) says that as private landlords leave the market, BTR can help meet demand. “There’s a BTR property for a range of budgets,” she tells LandlordZONE.  

“People are looking for quality, secure homes – there’s not so much security and tech in the standard private rented sector.

“Investors maintain BTR properties to a great standard, keep up with technology and want customer loyalty whereas private landlords might not be able to do that.”

To illustrate this, its website activity has increased by 53% in the last year, while the number of families searching for BTR homes has jumped by 509%.

Brown says there’s a growing pipeline of BTR properties and increasingly, family homes in suburban areas; the sector grew by 9% between Q1 2022 and Q1 2023, with the regional market growing at double the pace of London (12% and 6% respectively) as the concept stretches beyond young professionals in urban settings.

‘Customers’

She tells LandlordZONE that tenants in these developments particularly appreciate having confidence in a brand so are happy to move to one of their homes in a different city, while shared spaces create a much more positive experience for customers.

“When this is combined with all the practical elements that build-to-rent offers, it is no surprise that interest in the sector is growing,” she adds.

The platform hopes to spread the word about the sector’s benefits with the third Love to Rent week from 25th–29th September. It will push the message that BTR is managed by professional landlords, meaning that “difficulties and challenges are mostly avoided”.

Read more: what does BTR mean for BTL?

View Full Article: ‘Build-to-Rent doesn’t cherry pick posh tenants’ insists leading figure

Official ‘repairs tool’ launches to help tenants fight landlords and agents

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The Ministry of Justice (MoJ) has launched a tool that helps tenants take on landlords or letting agents who are failing to repair or maintain properties to the required standard.

Called ‘How to get repairs done in your rented home’ it takes those renting privately through a Q&A and then tells them how to either contact their local council, get more information about their rights or seek legal aid to take their landlord to court.

HFIS mediation expert Julie Ford (picture) says this tool, which is hot on the heels of a new free court service that offers tenants but not landlords help when fighting evictions, is part of a trend.

“It feels like the Gov are sneaking these new tools under the radar on purpose – it is all becoming very ‘pro-tenant’ with a stealth-like advance following on from [the Government’s] recent anti-landlord rhetoric”,” she says.

The new MoJ tool takes tenants through approximately ten questions depending on their circumstances to find out if they are subject to a ‘revenge eviction’ after requesting repairs, whether their health has been affected, how urgent the problem is, whether they are at risk of eviction and whether they’ve stopped paying the rent – something the MoJ advises them not to do.

Although the MoJ website doesn’t say so, it’s clear the initiative is part of the Government’s attempts to improve conditions within both the private and public housing sectors following the tragic death of toddler Awaab Ishaak last year, who lived in a council home affected by mould and whose landlord had failed to maintain the property adequately.

Read more: how to tackle mould if you're a landlord.

Sean Hooker (pictured) who heads up the Property Redress Scheme, says: “This could be a useful tool to help tenants access the help they need.

“But it has launched with little fanfare during the holiday period, so it needs some serious publicity to be effective.

“While it signposts a tenant to where they can get help right now, what is needed is for the plans to set up a private rented sector ombudsman and redress for repairs to be put in place as quickly as possible.”

Try the tool.

View Full Article: Official ‘repairs tool’ launches to help tenants fight landlords and agents

Landlords to pay £32,000 fines as big councils clamp down

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Landlords have been fined more than £32,000 for letting unlicensed HMOs and failing to improve unsafe properties so far this week.

Three landlords in Walsall were handed fines totalling more than £20,000 after being charged with letting unlicensed HMOs and ignoring fire safety and electrical hazards.

The fourth landlord was fined for not having an electrical safety certificate at his rented property. Walsall Council reports that all landlords have now addressed the problems.

Last September, the authority introduced its additional licensing scheme for the Pleck, Palfrey, St Matthews and Paddock wards and has now extended it to Bentley and Darlaston North, Birchills Leamore, Blakenall, Darlaston South and Willenhall South.

More fines

Meanwhile, in Bridlington, the landlord of a five-storey block of flats has been ordered to pay £12,377 for failing to ensure the property was safe for tenants. London-based Gedulah Ltd employed a management company to oversee 2 The Crescent (main picture) but did not do basic repairs or make adequate management arrangements.

East Riding of Yorkshire Council’s private sector housing team found the property had inadequate heating and insulation, damp and mould, unrestricted low-level opening windows, a faulty fire alarm and lack of door locks on the main entrance.

The company admitted two counts of failing to comply with improvement notices and was ordered to pay a total of £12,377 at Beverley Magistrates Court.

Dangerous hazards

Chris Dunnachie, the council’s private sector housing manager, says officers tried unsuccessfully to work with the landlord to rectify the dangerous hazards in its rental properties.

He adds: “The council does, and will continue to, take robust action when the safety of tenants is put at risk due to serious hazards from the properties they are living in.”

View Full Article: Landlords to pay £32,000 fines as big councils clamp down

Council that threatened PRS landlords to pay £5,400 compensation to tenant

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Just days after threatening private rented sector (PRS) landlords with taking control of properties they don’t license and look after; a council has been told to pay a tenant £5,400 in compensation.

The Housing Ombudsman announced the payment for prolonged damp and mould neglect in a home –

View Full Article: Council that threatened PRS landlords to pay £5,400 compensation to tenant

Tribunal system is ‘not fair and weighted towards tenants’ warns landlord

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A landlord who’s being threatened with a massive rent repayment order has told of his frustration at a court system that is unfairly weighted towards tenants.

Dan Jarvis’s mother is due to appear at a London First Tier Property Tribunal later this month, accused of withholding her former tenants’ deposit, but Jarvis explains he’s determined to make it clear that his family wasn’t at fault.

“These four tenants lived in our three-bedroom flat for three years and moved out a couple of years ago,” he tells LandlordZONE.

“When they left, we found they had totally trashed the house, leaving bed bugs, cigarette burns in carpets and ruined kitchen worktops.

“We were faced with a bill of more than £11,000 for all the repairs. Obviously, we weren’t going to pay back their £2,250 deposit.”

The tenants first – incorrectly and unsuccessfully – alleged that their landlord hadn’t protected their deposit but are now claiming a rent repayment order of £24,000.

They say no repairs were carried out during the time they lived there, which was why the house was in such a bad state.

Blackmailing

“My family could have just quietly given them the deposit back to try and prevent them from going to the tribunal, but we felt strongly that they were blackmailing us for the money and wanted to defend ourselves,” adds Jarvis.

“We’re lucky that we have other properties, so are able to pay for a defence, which has already cost about £10,000, but we want to raise the issue as it’s particularly hard on landlords with only one property who can’t afford legal fees.

“Even if you win as a landlord, you can’t claim your costs back, while a tenant can use a no-win, no-fee solicitor – it’s simply not fair.”

The landlords comments are particularly worrying as the Government says it wants to use the Tribunal system to give tenants more rights to challenge rent increases.

Read a guide to landlord fines including rent repayment orders.

View Full Article: Tribunal system is ‘not fair and weighted towards tenants’ warns landlord

Government should step in now to help renters – Generation Rent

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A tenant activist group says the government needs to step in and help renters and put in place long-term solutions to the housing crisis – including the unfreezing of Local Housing Allowance (LHA).

The call comes from Generation Rent after the housing charity Shelter warned that 51% of tenants are ‘just one pay cheque away’

View Full Article: Government should step in now to help renters – Generation Rent

Landlords say they’ll ‘shut down HMOs’ if new rules aren’t amended

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Scores of HMO landlords in Portsmouth have threatened to sell up or convert their properties to family lets once a new additional scheme launches next month.

The scheme extends licensing to about 4,000 three- and four-bed houses from 1st September and has been hotly contested by Portsmouth and District Private Landlords Association (PDPLA).

At its latest meeting, many members said they would shut down their HMOs and regain possession due to tough new space requirements that would prove impossible to meet, as well as the added costs.

Vice chairman Alwin Oliver (main picture) says 95 landlords were in the room and a further 25 online, all listening to the council’s plans. “Sadly, the landlords present did not seem reassured,” he adds.

Stealth

“When we asked the question if any were likely to exit the HMO economy, around 60 hands went up. It was a sobering sight.”

Oliver says one landlord spoke passionately about having helped some former homeless people into tenancies and who will now be required to give notice because of the new space requirements.

“The council are trying to clear the streets of HMOs by stealth,” he tells LandlordZONE.

The fall-out will be tough on those HMO tenants trying to find somewhere else to live in an already overheated market with increasingly fewer shared houses available.

However, if they wait for the bailiffs – believing they will avoid repossession in the knowledge that Section 21 means they are eligible for rehousing (because they are unlikely to be deemed intentionally homeless) – the costs of legal action and lost income for the landlord can be devastating.

“Multiply it by three or four in an HMO that has fallen into additional licensing and few landlords will survive the experience,” says Oliver.

Read his latest blog.

View Full Article: Landlords say they’ll ‘shut down HMOs’ if new rules aren’t amended