Unlimited fines for Social Landlords with Ofsted style inspections

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Failing social housing landlords could face unlimited fines and Ofsted-style inspections, under the Social Housing Regulation Bill set to be introduced to Parliament.

The move will mean more people living in decent, well looked-after homes enjoying the quality of life they deserve.

View Full Article: Unlimited fines for Social Landlords with Ofsted style inspections

John Lewis reveals first locations for PRS homes to ‘raise standards in sector’

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John Lewis has revealed the first three locations for new rental home developments in its bid to become a major residential landlord.

The retailer has plans for build-to-rent properties over Waitrose shops in Bromley and West Ealing (main picture), and to replace a vacant John Lewis warehouse in Reading, which it will then manage itself.  

John Lewis first declared its intentions to enter the PRS back in October 2020 and says this announcement confirms its target to deliver 10,000 homes in the next ten years – 5,000 of which will come from schemes on the partnership’s own property portfolio.

It’s part of a long-term plan for 40% of profits to come from outside of retail by 2030 after suffering substantial pre-tax losses of £26m in the last financial year.

Car parks

It has identified space in its car parks, above Waitrose supermarkets and near distribution centres for homes ranging from studio flats to four-bedroom houses where residents would have options for short and long-term leases and to have their homes furnished by John Lewis.

It hopes to create a sense of community in the developments by incorporating shared spaces and facilities such as roof gardens and fitness studios, and aims to raise standards in the sector.

Nina Bhatia, executive director for strategy and commercial development, says: “Everything people love about our brand – quality, trust and service – we want to bring to the experience of renting a home with us.

“Helping to create homes has always been at the heart of what we do and we now have a unique opportunity to use our expertise and skills in new ways to deliver much-needed new housing.”  

Local people in Bromley and West Ealing will be involved in a public consultation over the next few months before planning applications are submitted next year. A consultation for Mill Lane in Reading, will take place later this year. 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – John Lewis reveals first locations for PRS homes to ‘raise standards in sector’ | LandlordZONE.

View Full Article: John Lewis reveals first locations for PRS homes to ‘raise standards in sector’

Please Help – 1 AST but some tenants have not been paying?

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We have been landlords for almost 15 years – specialising in students. There is always one AST for 12 months (we have no HMO licence and do not need one right now). We have never encountered any problems. We are good landlords

View Full Article: Please Help – 1 AST but some tenants have not been paying?

Landlord wins 40% RRO reduction despite omitting to re-licence during COVID

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An expat landlord who forgot to licence his property during the pandemic has managed to get £6,500 knocked off a hefty Rent Repayment Order.

Gary Michelson told a First Tier Property Tribunal that the more severe lockdown in France and his fears for family members suffering from Covid-19 resulted in him forgetting to renew it.

He argued that as a one-property, unprofessional landlord who was resident overseas, he relied on his managing agent to remind him of his obligations.

The tribunal ruled that it was no excuse but said this wasn’t a case where a landlord didn’t licence a property to avoid spending money.

It added: “We accept that Mr Michelson did genuinely intend to renew his licence, and that he did genuinely forget to do so, in the conditions of the pandemic.

“That does not amount to a defence of reasonable excuse, but it is relevant to the level of his culpability and the amount of the RRO.”

Lapsed

The tribunal ordered him to pay £9,860 out of a possible £16,426. It had heard that the two tenants lived in his two-bed terraced house in Pretoria Avenue, Walthamstow (pictured), which was licensed under a previous scheme in Waltham Forest that lapsed in April 2020.

“The new scheme came into effect the next month but Michelson did not apply for a licence until June 2021.

He told the court that he relied on the rent as his only income and that £11,520 in an ISA would go towards paying off the principal of the interest-only mortgage (£161,000) in 2027.

Now retired and living in France, he added that he would have to sell the property because the mortgage was interest only.

The tribunal heard he had not disclosed two additional joint accounts held with his partner but agreed that it couldn’t assume he could use these resources which it took into account when deciding on the cash award.

Read more about RROs.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord wins 40% RRO reduction despite omitting to re-licence during COVID | LandlordZONE.

View Full Article: Landlord wins 40% RRO reduction despite omitting to re-licence during COVID

Former TV landlord warns over ‘sub-standard’ homes for Ukrainian refugees

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Private landlords housing Ukrainian refugees should ensure their homes are up-to-scratch, says a former landlord, after one family was forced to live in a filthy flat.

Tenant and former landlord Tim Earing (pictured) applied through the Homes for Ukraine scheme to house a mother and her two children (main picture) in his Beckenham flat, but the father and grandmother arrived with them, which meant he didn’t have enough room.

Earing has previously appeared on Paul Shamplina’s Channel 5 show, Nightmare Tenants, Slum Landlords when he was having problems evicting a tenant.

His experience, along with a number of serious health issues, prompted him to sell his rental property and he now lives in social housing.

Flat stay

“I didn’t turn the Ukrainian family away and they all stayed in my flat for two weeks but I couldn’t house them legally as there were too many of them and I hadn’t had my DBS check done by the council by then – my landlord also hadn’t given me the go-ahead despite numerous phone calls,” he tells LandlordZONE.

“Thankfully, local churches and the community helped provide mattresses and beds.”

Bromley Council moved the family into a bigger house owned by a private landlord but it was sub-standard, says Earing.

“It was filthy, the kitchen was thick with grease and it smelt of cat pee. I helped them get it to a reasonable condition but it was unacceptable for them to have to live like that. Thankfully, the landlord has now agreed to wash the carpets.”

Inadequate

He’s frustrated that some landlords are getting paid by councils to provide inadequate properties to refugees and says local authorities also need to step up their response and provide safer homes, whether temporary or long-term.

However, the experience hasn’t put him off and he’s hoping his landlord will give him the go-ahead to try again.

“It’s the best thing I ever did and I’ve met some wonderful people,” he adds.

LandlordZONE has approached Bromley Council for a comment.

Read the latest government guidance on housing Ukrainian refugees.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Former TV landlord warns over ‘sub-standard’ homes for Ukrainian refugees | LandlordZONE.

View Full Article: Former TV landlord warns over ‘sub-standard’ homes for Ukrainian refugees

Renters Reform Bill pushed back and Rent controls off the table

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Housing Minister Eddie Hughes was answering written questions to Parliament and indicated that the Renters Reform Bill that includes proposals to ban Section 21 would be pushed back. After previously stating the White paper would be published this Spring he now seems to be much less certain on timescales.

View Full Article: Renters Reform Bill pushed back and Rent controls off the table

57% of PRS benefits tenants now have a Local Housing Allowance shortfall

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Official data shows that of all private rented households in receipt of the Local Housing Allowance over half, 57%, have a shortfall. This amounts to just over 820,000 households.

Regionally, the proportion of private rented households affected ranges from almost 41% in London (although based on a much higher number of claimants)

View Full Article: 57% of PRS benefits tenants now have a Local Housing Allowance shortfall

Comment: fears over the future of private rental market in the regions mount

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While in England the housing minister Eddie Hughes has just ruled out rent controls, in Scotland, Wales, Northern Ireland and the Irish Republic, the governments there are still pursuing a policies of rent controls with a vengeance, in one form or another.

The Irish experiment with rent controls

The Irish Republic was one of the first in the modern age to go back to the idea of rent controls, going by the technical name of “Rent Pressure Zones” (RPZs). The Residential Tenancies Act 2004 introduced a very challenging regulatory and taxation regime for private landlords in Ireland. The Irish Residential Tenancies Acts together imposed strict controls on rent increases so the system there has had longer to bed-in and take effect that anywhere else in the UK.

New research carried out in Ireland by economist Jim Power on behalf of the Institute of Professional Auctioneers and Valuers (IPAV) and the Irish Property Owners Association (IPOA) found that Rent Pressure Zones (RPZs), which limit the extent to which rental prices can be increased in specific areas, where rental property is in high demand, have created a two-tier rental market, with so far little effect on rising prices.

The study also found that contrary to the legislation’s intent, RPZs, the way they are applied, actually prevented rents from falling as well as rising beyond the set limits. Power’s report says that the share of private investor participation in the mortgage market in the Republic has fallen from 19.9% of total mortgage lending in 2006 to 1.4% in 2021.

The result it seems has been an Irish landlord exodus on a mass scale, with the result that the market begins to work against tenants: “If private landlords continue to exit the market, the situation is going to get worse,” the analysis warns.

The Scottish experience

In Scotland also, the tenancy system changes introduced in December 2017 with a new type of tenancy, the Scottish private residential tenancy replaced the assured and short assured tenancy agreements for all new tenancies.

The Scottish legislation placed more restrictions on private landlords: tenants were given greater protection from eviction, a landlord registration system was introduced and the legislation contained provisions that would allow local councils to apply to Scottish Ministers to have an area designated as a ‘rent pressure zone’ (RPZ), this is where they can show the rents are rising too much.

More recently, the pact between the Scottish National Party and the Scottish Green Party is destined to result in Holyrood legislation which would introduce greater tenant protections and serious rent controls north of the border.

The Fair Rents (Scotland) Bill currently progressing through the Scottish Parliament would change the law again in the private rented sector in an attempt to control rent levels, adding to and strengthening the law in the Private Housing (Tenancies) (Scotland) Act 2016.

So far, it would seem, the legislation introduced in Scotland in recent years affecting private renting does not appear to be having the desired affect. The number of properties available to rent through letting agents has halved in the last four years according to a recent article in The Scotsman newspaper, and landlords have continued to leave the market in large numbers, according to new figures.

The Scotsman article sites data compiled by Propertymark the letting agents’ body which also found that “94 per cent of all UK landlords who removed their property from the rental market between 2019 and 2022 did so to sell it. More than half of the rental properties sold in March this year alone did not return to the private rented market.”

Propertymark says that these figures illustrate the extent of the exodus of landlords from the UK private rented market. Nathan Emerson, Propertymark’s chief executive, is quoted as saying, the data “presents a worrying picture for private renters”.

So, as with the Irish Republic, which introduced rent controls well ahead of Scotland, the same picture is beginning to emerge: the number of properties available to rent is diminishing at an alarming rate, with a large proportion of landlords choosing to sell-up.

Far from the desired result of keeping rent rises in check and improving the tenants’ lot, legislation throughout the UK aimed at providing more tenant protection is resulting in increasing pressure on rents due to a severe lack of supply, and increasing numbers are joining the social housing lists.

“We know from our research that the most common reasons for landlords to choose to sell their properties and no longer provide homes are around risk, finances and viability, says Mr Emerson.

“Landlords and letting agents have been the subject of extreme legislation changes as the UK government tries to improve the sector. However, without a middle ground, these changes are actually proving detrimental to those they are supposed to protect.”

The Propertymark research was based on almost 18,000 members across the sector, it surveyed 443 agents working for businesses with a combined total of more than 4,000 branches across all four UK nations for its report.

What about Wales?

In Wales too, proposals for the introduction of rent controls were announced last November by the country’s Labour government and the Welsh nationalist party Plaid Cymru when it was revealed that they had entered a loose political alliance.

The two political parties are now working in partnership on more private renting issues including rent controls, but also some other radical measures including new longer ASTs and much longer notice periods.

The National Residential Landlords’ Association (NRLA) says that these measures are already beginning to bite in Wales, with its research showing that only 11 per cent of landlords polled said they planned to increase the number of properties they let out while 37 per cent of respondents planned to cut down on the number they rent out.

Ben Beadle, Chief Executive of the NRLA says:

“Our White Paper sets out what must be done in Wales to build a fairer, more inclusive PRS for both tenants and landlords and the damage that outmoded notions of rent control could have on the market.

“Ultimately, with affordability and supply issues continuing to dog the Welsh private rented sector, rent controls would exacerbate these ongoing problems and fail to provide a solution fit for the twenty-first.”

England an outlier

Although the private rented sector in England is already suffering a landlord exodus due to increased regulation, tax increases, energy efficiency costs and the plan to remove the “no fault” section 21 eviction process, it seems that England is an outlier as far as rent controls go, if the minister is to be believed.

Of that there is no guarantee of course as a future Labour government would likely join the other regions and the Irish Republic by introducing some form of rent controls.

Rents out of control

Rents getting out of control are creating severe problems for many tenants right across the UK and Ireland, in particular for those tenants on low incomes. But high rents also disproportionately affect the younger generation who make up the majority of private tenants. The lessons to be drawn from the Irish experience with rent controls, it would seem, are far from positive.

The irony is that rent controls, designed to help tenants by keeping rents at an affordable level, appear to do the exact opposite the longer they are in operation. Experience of them historically and from around the world has shown that long-term they create a two tier rental market, they reduce mobility because renters on lower rents won’t move, and they generally reduce the quality of housing when landlords with low returns do not refurbish.

More of the same?

When rent controls are seen not to be working, it’s an unfortunate tendency that many will argue that the system has been poorly implemented or there are policy difficulties, so even more controls are needed to make it work. Will it take many more years and attempts to do so before the lesson of history on rent controls is learned all over again?

Everyone agrees that the UK needs more housing, but are rent controls really the answer, or do they simply address the short-term symptoms of the problem, rather than its root cause? The question for policy-makers around the UK regions is whether rent controls are really the answer? Are they just a short term solution to relieve the symptoms, will they simply make things a whole lot worse?

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Comment: fears over the future of private rental market in the regions mount | LandlordZONE.

View Full Article: Comment: fears over the future of private rental market in the regions mount

Meet Mark Smith (Barrister-At-Law) Landlord tax planning strategies – pin Essex

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Our Hon. Legal Counsel, Mark Smith, Head of Chambers at Cotswold Barristers, will be presenting in person an overview of several landlord tax strategies at the pin Essex meeting Tuesday 21st June.

The Essex pin Meeting has returned to its physical venue The Thurrock Hotel

View Full Article: Meet Mark Smith (Barrister-At-Law) Landlord tax planning strategies – pin Essex

BREAKING: Minister confirms government will NOT consider rent controls in England

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Private rented sector figures have welcomed a commitment from housing minister Eddie Hughes that the government is not considering rent controls in England.

In a written reply to a question from Labour MP Rachael Maskell, the Minister agreed with Propertymark’s position that there was enough evidence available to show they would discourage investment in the private rented sector and lead to declining property standards.

But the announcement, which was prompted by commentary within the notes published alongside the recent Queen’s Speech suggesting the government would consider rent controls ‘via the back door’, doesn’t let agent and landlords outside England off the hook.

Rent controls

Ministers in Scotland, Wales and Northern Ireland are pursuing their own provisions for rent controls.

Hughes’ announcement is also a rebuff to London mayor Sadiq Khan, who on multiple occasions has asked for powers to introduce rent controls in the capital.

“Only last month we urged the Minister to study closely his department’s own statistics that show tenants are 40 times more likely to be made homeless because their landlord has become so disillusioned with the tax and legislative burden and wants to sell their property, than because they can’t afford the rent,” says Timothy Douglas (pictured), Head of Policy and Campaigns at Propertymark.

“His decision to publicly rule out rent controls in England suggests that he has taken our advice.

“The policy of rent controls may be popular among those looking for a short-term solution to rising market rents amid the cost-of-living crisis, but they will not solve the root cause of the problem, which is an undersupply of homes across all tenures.

“In a free market, where rents are allowed to flex in line with demand, investment in the private rented sector is incentivised. This provides a far more effective solution to the issue of affordability and encourages the long-term supply of good quality housing.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Minister confirms government will NOT consider rent controls in England | LandlordZONE.

View Full Article: BREAKING: Minister confirms government will NOT consider rent controls in England