BREAKING: Evidence heard in final day of landmark rent-to-rent court case

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The Supreme Court is debating a key legal case around rent-to-rent operators today to decide if the superior landlord, or any landlord in the chain, should be responsible for a rent repayment order.

Judges are hearing interventions in the Rakusen v Jepsen case including from the NRLA, represented by property lawyer David Smith (pictured), concerning landlord Martin Rakusen who agreed to let his flat on Finchley Road, London, to a rent-to-rent company in May 2016.

However, by November 2018, the flat had become an HMO but a licence wasn’t applied for, and the former tenants sought a RRO against him – as the superior landlord – instead of the rent-to-rent company.

The Upper Tribunal ruled that the order could be applied for against the superior landlord, however the Court of Appeal subsequently found in the landlord’s favour.

As the final day of hearings draw to a close, David Smith adds that he won’t get to speak to the court and will have to wait several months for a decision. “It is frustrating to watch and wait with nothing more that can be done,” he told BBC News.

“But it is also an important case which will affect landlords and tenants and illustrates the importance of Parliament getting this stuff right first time around.”

Going wrong

NRLA chief executive Ben Beadle (pictured) says both tenant and landlord are the victims when it comes to dodgy rent to rent operators going wrong.

“We want to see absolute clarity,” he says. “You’ve got arrangements where the landlord has made an agreement with a provider who collects the rent and executes the repairs, and then situations which the landlord might not be aware of – in this case they get clobbered through no fault of their own.”

If the Supreme Court was to change the position adopted by the Court of Appeal, then authorised rent-to-rent arrangements will likely become less common, leading to a lower availability of budget accommodation to rent on a room-by-room basis, says the NRLA.

But critics of the rent-to-rent model of letting point out that for too long both landlords and many tenants have been ripped off by dodgy operators within this market, as the many articles LandlordZONE has published on this topic highlight. Also, last year Beadle told an audience at a landlord show that the ‘bad eggs’ in the rent-to-rent sector urgently needed kicking out.

View Full Article: BREAKING: Evidence heard in final day of landmark rent-to-rent court case

Scottish government urged to declare a ‘national housing crisis’

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A Conservative MSP is calling on the Scottish Government to declare a ‘national housing crisis’ after it was revealed that 47,000 people are homeless in the country.

The data from the Scottish government also reveals that 30,000 people are stuck on social housing waiting lists.

View Full Article: Scottish government urged to declare a ‘national housing crisis’

Barclays to stop telling tenants credit card debt ‘helps them pass referencing’

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Barclays has been rapped on the knuckles for a radio advert that urged tenants to rack up credit card debt and increase their credit score to help them rent a flat.

The advert’s voiceover explained: “Using my Barclaycard Forward credit card to pay for the stuff I need now could help build up my credit score for the day I need something bigger. So buying a set of headphones…could help in the future when I want to rent my first flat share.”

Responding to complaints, Barclays said the ad was intended to show that you could improve your credit score by using a credit card responsibly, purchasing goods and paying it off in time.

It explained that many third parties and credit reference agencies recommend using a credit card in that way to build a credit score, which was important for letting agents when letting a property.

Credit score

It added that landlords used many factors when considering a credit score, including salary, but it was down to the individual landlord to decide which factors to pick.

It explained that private landlords and letting agents with more than 100 properties were able to use credit data when making credit and affordability decisions. However, Barclays could not confirm that every landlord would use credit reference agency checks, or if they did, that the credit data they could access was suitably detailed. It agreed to withdraw the advert.

The ASA ruled: “We considered that a significant section of the rental market was made up of private landlords with less than 100 properties. Because there was no guarantee that these individuals would carry out or would have access to detailed credit reference checks, we concluded that the ad exaggerated the impact of retail purchases on a person’s credit score, in relation to renting a property, and therefore the ad was misleading.”

Read more: Credit scores explained.

View Full Article: Barclays to stop telling tenants credit card debt ‘helps them pass referencing’

Accelerated Process – solicitor says no!?

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Hello, a S21 was issued to a tenant with expiry in mid Dec. I then contacted my insurance to progress the accelerated process. They contacted the legal company that I have cover with as part of my policy.

They have come back to me stating S21 is deemed invalid and that they will not progress for the following reasons:

1. The tenancy deduction clause has not been included in the prescribed information
2. I cannot see that a hard copy of the DPS T&C’s has been provided to the tenant
3. The most recent How to Rent Guide was not served on the tenant at the point when the tenancy went periodic.

View Full Article: Accelerated Process – solicitor says no!?

Plans for rental reform will ’cause chaos for students’

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‘The future vitality of the education sector is uncertain.’

That’s the warning from several organisations after plans by the government to reform the PRS run the risk of making it more challenging for poorer students to enter higher education.

View Full Article: Plans for rental reform will ’cause chaos for students’

Minister told looming tenancy reform will reduce student housing supply

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The government has been urged to exempt all student housing from its plans for open-ended tenancies or risk making it harder for students to enter higher education.

Groups representing universities and student accommodation providers – along with the NRLA – have written to Housing Minister Felicity Buchan (pictured) explaining that a shortage of this accommodation has already led some academic institutions to call for a limit to be placed on student intakes for as long as the next five years.

It warns: “The proposed introduction of open-ended tenancies and inevitable reduction in housing supply is therefore likely to further constrain the expansion of the education sector, to the detriment of prospective students and wider society.”

The government’s White Paper on rental reform proposes that all student housing, except for purpose-built blocks, would be subject to open-ended tenancies, meaning landlords would be unable to guarantee that accommodation will be available for the start of each academic year, unless sitting tenants have handed in their notice to leave. As a result, students couldn’t plan where they want to live and with whom.

Disadvantaged

“Reduced supply and rising costs in the private rented sector are increasingly likely to preclude economically disadvantaged students from living on or near campus,” add the groups.

They argue that where a landlord rents their property to a group of students, a fixed term tenancy agreement should be permissible, and call for measures to allow student landlords to give two months’ notice to repossess a property when it is needed for incoming students.

To provide these students protection, they suggest that such notice should only be given during the final two months of a tenancy agreement.

Read more about the campaign to persuade ministers of rental reforms and the student sector.

View Full Article: Minister told looming tenancy reform will reduce student housing supply

Daily Telegraph wants to talk to landlords who have recently sold new build properties

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Are you a landlord who has recently sold new build properties for less than what they paid? Then, Alexa Phillips, the personal finance reporter for the Telegraph would like to speak with you.

Alexa would like to know:

When did you buy the property?

View Full Article: Daily Telegraph wants to talk to landlords who have recently sold new build properties

Landlords are taking action as tax bills and refurb costs rise above rent yields

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The festive period is over, and as we head towards the second month of 2023, the year has well and truly begun. For many landlords, 2022 was a mixture of tough decisions, calls to action, and the realisation of a potentially rocky road ahead.

View Full Article: Landlords are taking action as tax bills and refurb costs rise above rent yields

NEW: Activists urge landlords and agents to stop property ‘bidding wars’

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Tenants’ union Acorn has pledged to continue targeting letting agents in the city until they stop encouraging ‘bidding wars’ to help landlords achieve higher rents.

Members launched a noisy protest outside a number of branches; some agents which had started talks with Acorn about signing the pledge were left alone, but others were visited by Acorn reps who said they would follow up requests and repeat the protest until the agencies agreed to end the practice.

“We’re trying to stop letting agents pitting tenants against each other to force up the price of rents, driving loads of people out of the city, out of their homes that they’ve been in for years, and breaking apart communities, and this is something that is going on all the time – it’s affecting loads of our members,” Acorn organiser Ewan Maclennan (pictured) told the Bristol Post.

He explained that agents sometimes encouraged people to bid £50 or £100 higher to increase their chances of securing a property or gave out a formalised offer form to tenants.

“It’s almost part of the formal process for a lot of these letting agents,” added Maclennan.

Council motion

Earlier this month, Bristol City Council acknowledged the prevalence of bidding wars and their negative effect for renters, particularly low-income households.

It passed a motion backing calls for new rent controls in Bristol and promised to publish an annual living rent index, showing what affordable rents would look like in the city. A publicly accessible list will also show all enforcement notices issued to landlords while a new regular renters’ forum would engage with private tenants.

Read more about Bristol.

View Full Article: NEW: Activists urge landlords and agents to stop property ‘bidding wars’

Where are the most affordable places to rent?

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The current turmoil in the rental market shows no signs of slowing down with UK rents in the fourth quarter of 2022 hitting an all-time high, increasing 13% year-on-year, according to a new survey.

The flatshare site, SpareRoom

View Full Article: Where are the most affordable places to rent?