Young men can no longer afford a bachelor pad…

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The traditional bachelor pad could be a thing of the past for the working and professional young man according to figures just produced by the Halifax Building Society.

What was once considered a “rite of passage” for young men of a certain standing is now being severely curtailed. A growing number of young men are struggling to get on to the property ladder without the help of a partner.

The Halifax’s research found that around 50% of 18 to 35-year-olds are relying on their partner to help them get on to the property ladder. And in the survey men were twice as likely as the women questioned to say that not being able to buy with someone else is a barrier to getting on the property ladder.

Batchelor pads it would seem are definitely on their way out for many young men, with around 18 per cent of men and 9 per cent of women thinking they would need to buy a property jointly or carry on renting.

The rapid rise in house prices over recent years, far out-stripping wage increase and young people’s ability to save the average deposit amount, now set at £32,899, an amount which is well above the average person’s annual salary.

Halifax economist, Martin Ellis, told The Daily Telegraph:

“It’s not difficult to see why so many young people are now waiting for a partner to take their first step onto the property ladder.

“With many people trying to fund day-to-day living while saving for a deposit may not even be able to imagine raising this amount of cash on top of all their regular outgoings, first-time buyers in the UK are still on average £651 a year better off buying their home compared to renting.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Young men can no longer afford a bachelor pad… | LandlordZONE.

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Dealing with Deposits

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This is the second post in my 2017 Legal Update series.

Today I am looking at Tenancy Deposits

Tenancy deposits were first introduced in April 2007 and ever since then all landlords have had to:

• Protect their tenants’ deposit within a government authorised scheme within a time limit and
• Serve ‘prescribed information’

Although many deposits have been protected and dealt with perfectly satisfactorily under the rules, the legislation proved to be most unsatisfactory and has had to be amended twice.

Frankly if they had intended to mess it all up, the Parliamentary Draftsmen could not have done a better job!

The most recent changes came with the inappropriately named ‘Deregulation Act 2015’ which also brought in changes to section 21 which I will be explaining later in this series.

This is how it now works:

Protecting the Deposit

When you take a deposit, you need to protect it in a scheme within 30 days of receipt of the money.

There are two possible problems areas here:

• Deposits that are paid a long time before a tenancy starts, and
• Situations where landlords allow tenants to pay deposits by installments.

So far as the early deposits are concerned – the best advice is to just protect them within 30 days.

Some people assume that as the tenancy has not started yet there is no AST to (as it were) hang the need to protect on. However as soon as the tenancy is created you will instantly be out of time. So best to just bite on the bullet and protect.

So far as accepting deposits by installments is concerned this is a VERY bad idea. Each and every installment must be protected within 30 days of payment and many landlords have got into trouble by waiting until all payments are paid. If you must accept installments its best to do this with the rent rather than the deposit.

Serving the Prescribed Information

Prior to the Deregulation Act we had a ridiculous situation (following on from the Superstrike Case) where landlords had to keep serving prescribed information forms whenever the tenancy was renewed, e.g. as a periodic tenancy.

Thankfully the Deregulation Act changes stopped this nonsense. However, you still need to be careful to serve the notice within time.

Remember that it is the information that is prescribed not the form – there is no actual prescribed information form. So, you need to be careful to ensure that all the information is actually provided.

Serving a copy of the certificate and your scheme’s leaflet will satisfy most of the requirements but not all. For example, you also need to tell the tenant the clauses in your tenancy agreement which set out the deductions you are entitled to make from the deposit.

For this reason, it is best to use a properly drafted legal form so nothing gets overlooked – suitable forms are provided by TDS and the DPS and I also have one for my Landlord Law members.

What if it all goes wrong?

The problem about failing to comply with the rules is that you cannot then serve a valid section 21 notice until you are compliant – which includes refunding the money to the tenants.

If you are ever in this situation, I have prepared a Legal Kit which you can read about below, which explains the law and gives step by step guidance.

Tenants are also entitled to bring a claim for up to 3x the deposit sum if you breach the rules. So, it is best to comply so they have no chance to do this.

Further information:

Probably the best source of information is the website for your scheme.  This will have guidance, the scheme terms and conditions and helpful articles.  The schemes also have free telephone advice lines – you can find the number from your scheme website.

The websites are

• TDS
• The DPS
• My Deposits

On my Landlord Law site, I have a lot of help for members on deposit issues, including a ‘compliance checker’ trail you can follow to see if you have complied with the rules, a long article explaining the prescribed information and a prescribed information form you can use.

Members can also ask me ‘quick questions’ in the members forum area.

You can find out more about Landlord Law here.

If you forget the protect the deposit in time, my Deposit Error Repair Kit has step by step guidance to help you comply with the law and serve a valid section 21 notice.

Next time I will start looking at section 21 and the complicated rules that now apply.

Tessa Shepperson is a specialist landlord & tenant lawyer and runs the popular Landlord Law online information service.

To see all the articles in my series please Click Here

Additional course below:

Landlords – if you want to avoid legal problems, penalties and fines, this online course is just the job Please Click Here

The course will have a special 30% discount for PP118 readers via a coupon due to expire in 3 weeks time.

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Tenants of National Trust properties facing huge rent rises…

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Ground Rents:

The National Trust has told one of its tenants – an 87-year-old man – that his rent payments will go up from £148 to £15,000 per year, according to a recent report in The Times.

The Trust has told hundreds of tenants in its leasehold properties around the country that they are facing ground rent increases approaching 10,000 per cent.

The charitable organisation has around 5,000 homes on its land which it rents to over 10,000 people, most of them currently rented on monthly rent payments, but some leases were sold as long-leaseholds, mostly of 49 years’ nominal duration, and with an affordable ground rent.

However, as the lease lengths diminish and the tenants apply to extend their leases, the trust is saying they must accept an increased charge or pay tens of thousands to “buy up” the higher ground rent.

In his case the 87-year-old leaseholder would have to find £78,000, and around 300 people could find themselves in a similar position.

The issue surfaces as Government ministers have pledged to ban “feudal” leases with quickly escalating ground rents, a practice which is increasingly being used by building companies when they sell new homes, oftentimes to unsuspecting young buyers.

A spokesman for the National Trust told The Times that some long leasehold tenants had not been aware of how “Modern Ground Rents” work and the trust is “working to find a fair solution” with a 50 per cent reduction in “relevant cases”.

“We know that some leaseholders feel they have been misled as to the impact of modem ground rents. If we are satisfied that that has happened then we will consider foregoing modern ground rent altogether,” it added.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tenants of National Trust properties facing huge rent rises… | LandlordZONE.

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DWP Helpline for landlord clarification

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I have noticed that there are a few articles floating around the landlord community regarding a new landlord helpline for landlords that have tenants on Universal Credit.

In one article it states “The new number 0345 600 4272 can be used by landlords who are unable to obtain the tenant’s co-operation to get DWP to supply information when it comes to enquiries about major payments – such as a direct payment to the landlord.”

I would like to clarify that the number that has been provided is the Universal Credit full service number which has always been in use, the number is not specific to landlords and can be used by both claimants and landlords who need assistance.

If the landlord wishes to discuss a new APA that has recently been submitted the landlord still requires “explicit consent” from the tenant to discuss the claim.

Landlords can use this number to discuss existing APAs that are already been put in place as consent has already been provided by the claimant in order for the APA to be set up.

DWP issued new guidance on Universal Credit via the gov.uk website on 4th August 2017, for more information please follow this link

jQuery(document).bind(‘gform_post_render’, function(event, formId, currentPage){if(formId == 398) {} } );jQuery(document).bind(‘gform_post_conditional_logic’, function(event, formId, fields, isInit){} ); jQuery(document).ready(function(){jQuery(document).trigger(‘gform_post_render’, [398, 1]) } );

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Financial Planning / Tax Advice needed

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Dear all,

I am a landlord with 3 rental properties that all earn a reasonable profit (and therefore tax). The properties are jointly in my name and my wifes.

I am currently employed but my wife has recently decided to take a 1-2 year (maybe longer) break to look after our children.

In addition, I have just accepted a job in Atlanta, USA and we will be re-locating in January for approximately 2 years.

I have always done my own tax returns as up until now it’s been relatively straight foward. However, I feel now that I need professional advice to minimise my tax liability.

What I’m mainly considering is whether now is a good time to pass ownership of the properties to my wife as she will not be earning an income. I’m open to other ideas/strategies!

Can anyone point me in the right direction of who / how I can get help?

Many thanks!

Mike D

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Generation Rent Finally Provide Some Useful Info

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A few us of secretly signed up to receive Generation Rent emails some time ago, mainly to stay abreast of their latest propaganda.

However, they now appear be inadvertently giving us insight into the best places to invest for both rental and capital growth. Apparently, all we need to do is find out where Waitrose would like to open stores in the future, buy there and watch the money pour in.

Below is the email they recently sent out.

We look forward to reading your comments.

Here’s the extract from the Generation Rent update email ….

If Waitrose opens a new store in your local area, it could mean different things: job opportunities with a well-regarded employer, extra choice for your weekly shop – or, if you’re a renter, an eviction notice through the door.

Oxford academic David Adler has pored over eviction data from the Ministry of Justice and opening dates of Waitrose branches between 2005 and 2015. In a paper, published by Generation Rent, he found that areas see an increase in no fault evictions of between 25 and 50% when they get a new store.

He links this to rising house prices. Waitrose tends to open up in areas that are getting wealthier – i.e. through higher house prices. The presence of a Waitrose then attracts wealthier people into the area, which pushes up house prices further. Some landlords respond to rising property values by selling up, or finding tenants who can afford a higher rent – and that involves turfing out their current tenants.

It would be unfair to blame this phenomenon on Waitrose, but it does illustrate the impact of gentrification for private renters, when we have so little security over our homes. Renters shouldn’t face a forced move just because their neighbourhood is becoming more fashionable.

It’s another reason why we’re campaigning to end Section 21, the law that gives landlords the ability to evict tenants with no reason – and no grounds for appeal. If landlords are supposed to be in business for the long haul, the law should not make it so easy to evict someone who is upholding their side of the agreement.

We’re proposing restrictions and a penalty to deter landlords from evicting blameless tenants, giving tenants greater stability and a financial safety net if they are forced to move.

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Court refusing CCJ registration upon eviction?

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My local County Court is being difficult in respect of registering a £4k CCJ for a s8 eviction, see email trail below, am I missing anything or did anything wrong???

[me] “We have still not received payment for the attached order for possession. Can you please issue a CCJ judgement against the defendants and confirm when it has been done.”

[Court] “The order does not contain a court judgment to register. You have an order for arrears of rent which can be enforced and at this point the order will be registered.”

[me] “Sorry I don’t fully understand, for clarification are you saying you have now registered this judgement against their name as the have still not paid?”

[Court] “For clarification the court is saying there is no County Court Judgment to register.”

[me] “I am surprised as in the past when tenants were evicted they had a CCJ placed against their name for the arrears. What is the court process to have a CCJ marker against their name for this case to safeguard future landlords/lenders? Does the defendant really get away 100% scott-free, which is highly unfair?”….

I’m awaiting a reply!

Nathan

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Announcing the Landlord Law / Property118 Legal Update series 2017

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Summer is a time for holidays and relaxation. I think it is also a good time to stop and take stock and bring yourself up to date.

There have been a lot of legal changes for landlords and letting agents over the past year – with more to come. To help, I have got together with Property118 to provide this series of articles to bring you up to date. It is aimed at anyone who is a private sector landlord, letting agent, advisor or who works in the PRS in some other way.

Why keeping up to date is essential

For years things have chugged along in the private rented sector, not changing that much – maybe a new legal case from time to time, but no major changes.

However, over the past couple of years there have been a number of massive changes in the law affecting the private rented sector.  It has been a bit of a roller coaster – leaving many landlords worried and confused.

For example, new rules have come in for deposits and section 21 notices, right to rent penalties now include criminal proceedings and Local Authorities have acquired draconian new powers of enforcement.

Local Authorities and others

The main reason why Local Authorities have in the past done little enforcement work is lack of funds. But this is about to change. New Local Authority enforcement powers which came into force in April this year include the right to impose penalty charges and make rent repayment orders and are almost certainly going to be used – as Local Authorities get to keep the money.

This will then allow them to step up their enforcement work, funded by this new income stream.

It’s not just fear of fines though which should make you worry. Tenants are becoming more aware of their legal rights, and Judges are becoming increasingly picky when deciding whether or not to grant possession orders.

So it behoves landlords to know and understand the law – and comply with it!

This Summer Legal Update Series

Over the next couple of weeks, I will be looking at the most important areas of law which landlords need to know about and giving a quick overview.  I will also be giving you links to places where you can find more information.

The series will kick off on Monday, and my first post will be on deposits.

Tessa Shepperson is a specialist landlord & tenant lawyer and runs the popular Landlord Law online information service.

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Landlords turning to holiday lets

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Airbnb Lets:

Large numbers of private rented properties in London are being let on a “holiday let” basis, many in contravention of the 90 day planning rule, using Airbnb to find “tenants”. The trend means fewer properties are available for those wanting long-term lets reports the Residential Landlords Association (RLA).

New research in London carried out by the RLA finds that there has been a 75 per cent increase in the number of landlords listing more than one propriety on Airbnb between February 2016 and March 2017.

The research has also uncovered evidence that the number of whole properties and rooms advertised on Airbnb in London, available for more than 90 nights a year in contravention of the holiday let planning rules, has increased by 23% between February 2016 and March 2017.

Outside of London a similar trend is emerging. The RLA survey of almost 1,500 landlords found that 7 per cent reported that they were now offering properties as holiday/short term lets through Airbnb or a similar advertising platform.

Previously, all these properties would have been available to let longer term in the private rented sector. If this trend is reflected across the whole sector, it would mean a minimum of 134,400 private rented homes moving from the traditional private rental (PRS) market to holiday or short let accommodation.

The reason given for the move to short-term letting by 36 per cent pf landlord surveyed was that the recently introduced tax changes to mortgage interest relief had forced them into it.

The new rules mean that landlords are now being taxed on their income instead of their profit and tax relief in only applied at the basic rate of income tax. One landlord who has made the move to holiday lets told the RLA:

“I didn’t want to do this, but the tax changes have forced me down this route. Selling is not an option due to CGT, and this iniquitous tax which is effectively retrospective is unjust in that my buy to lets are a business, just like any other. There will be less properties available to rent as a result of this tax.”

The RLA is calling on the Government to end the perverse incentive landlords have to move to holiday lets by scrapping the mortgage interest relief changes.

RLA Policy Director, David Smith, commented:

“With London and the country as a whole in desperate need of new homes to rent in the long term, it is crazy that recent tax changes encourage landlords to move to the short term holiday let market.

“What we need is a tax system that encourages investment in homes to rent for the long term by good landlords.

“By skewing the market Government policy will serve only to hit the hardest those young people and families who most need a growing private rented sector to meet their needs.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords turning to holiday lets | LandlordZONE.

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Estate Agent Property Bingo sweeping the nation

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A nationwide game of Property Bingo has been triggered by a comedian and former estate agent’s witty new glossary for beleaguered property seekers

Glossary translates infamous go-to estate agent lingo into what it means in real life

Property Bingo card available to download from https://twitter.com/PrivilegeUK @PrivilegeUK

Comedian and former estate agent, Nick Page, has released a new ‘Estate Agent Glossary’ for Privilege Home Insurance.

The glossary contains 15 key phrases, and debunks the difference between what estate agents say, and what they really mean, using Page’s unique perspective.

The new list has triggered a game of Property Bingo, where players are challenged to see how many of the phrases in Page’s glossary they have heard an estate agent say, or how many they have seen written in a property’s write-up.

Property Bingo is available to download via https://twitter.com/PrivilegeUK with players encouraged to share their scores online using the hash tag #propertybingo.

Estate Agent Glossary

Source: Privilege Home Insurance

 Property Bingo – Play for Yourself

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