Ground rent reform – a sledgehammer to crack the wrong nut

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This week, the House of Lords will scrutinise the Leasehold Reform (Ground Rent) Bill 2021-22. When enacted it will impose onerous penalties and yet it signally fails to tackle what most MPs and the public think is its main purpose.

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EXCLUSIVE: Vast majority of selective licensing schemes run by Labour councils

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Councils around the UK are prepared to lose money running ‘polticial’ licensing schemes in their bid to get tough on landlords, new research shows.

Labour councils are also much more likely to push for registration and enforcement, says geospatial technology firm Kamma, which found that motivations were strongly political.

Out of the 58 active selective licensing schemes in England, 39 are in areas controlled by Labour councils compared to just seven run by Conservatives.

CEO Orla Shields says 2021 was another busy year for those regulating the property market with more legislation and more enforcement than ever before.

“While some see discretionary licensing schemes as just another way for authorities to tax landlords, our feedback from councils is that it actually costs them more to run these schemes than they recoup,” she tells LandlordZONE.

“Setting up a scheme then, is born out of strong motivation to raise standards and comes at some cost to limited council budgets.” 

There were 47 new schemes and consultations in 2021, with 12 actually launching this year, and five more scheduled to launch in 2022.

But a few schemes have begun to falter, some impacted by Covid or funding cuts; Southend recently deferred its scheme until next year, while others in Wakefield, Luton, Croydon and Hastings have all stalled or been rejected. Scarborough expressed fears that ministers had gone cold on selective licensing after a year-long wait to get approval for its new plans.

“Whilst some schemes were rejected by the previous Minister for Housing Robert Jenrick we don’t yet know how Michael Gove’s Department for Levelling Up, Housing & Communities will act,” says Shields. “It is a more radical brief, so 2022 looks set to be yet another year of change for property regulation.” 

Kamma reports that although there are no major geographic trends, London is particularly active. Lambeth, Westminster and Newham all kicked off new schemes or consultations this year while Southwark and Lewisham both have schemes scheduled for 2022.

Read more about selective licensing costs.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: Vast majority of selective licensing schemes run by Labour councils | LandlordZONE.

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Selective licensing schemes most popular with Labour councils and ‘lose money’

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Councils around the UK are prepared to lose money running ‘polticial’ licensing schemes in their bid to get tough on landlords, new research shows.

Labour councils are also much more likely to push for registration and enforcement, says geospatial technology firm Kamma, which found that motivations were strongly political.

Out of the 58 active selective licensing schemes in England, 39 are in areas controlled by Labour councils compared to just seven run by Conservatives.

CEO Orla Shields says 2021 was another busy year for those regulating the property market with more legislation and more enforcement than ever before.

“While some see discretionary licensing schemes as just another way for authorities to tax landlords, our feedback from councils is that it actually costs them more to run these schemes than they recoup,” she tells LandlordZONE.

“Setting up a scheme then, is born out of strong motivation to raise standards and comes at some cost to limited council budgets.” 

There were 47 new schemes and consultations in 2021, with 12 actually launching this year, and five more scheduled to launch in 2022.

But a few schemes have begun to falter, some impacted by Covid or funding cuts; Southend recently deferred its scheme until next year, while others in Wakefield, Luton, Croydon and Hastings have all stalled or been rejected. Scarborough expressed fears that ministers had gone cold on selective licensing after a year-long wait to get approval for its new plans.

“Whilst some schemes were rejected by the previous Minister for Housing Robert Jenrick we don’t yet know how Michael Gove’s Department for Levelling Up, Housing & Communities will act,” says Shields. “It is a more radical brief, so 2022 looks set to be yet another year of change for property regulation.” 

Kamma reports that although there are no major geographic trends, London is particularly active. Lambeth, Westminster and Newham all kicked off new schemes or consultations this year while Southwark and Lewisham both have schemes scheduled for 2022.

Read more about selective licensing costs.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Selective licensing schemes most popular with Labour councils and ‘lose money’ | LandlordZONE.

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Deposit-less renting scheme launches claiming landlords will ‘not be out of pocket’

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A new deposit-less renting service claims to go above and beyond other deposit alternatives on the market to make life easier for both tenants and landlords.

Rental guarantor service Housing Hand’s new product for working professionals, UK and overseas students covers all valid claims immediately, with a 100% pay-out rate, giving landlords reassurance that they won’t end up out of pocket if the tenant defaults on their rent.

Renters can choose to move into a property without paying a deposit if they’ve already applied for its guarantor service, which renters use in place of a personal guarantor.

Small chunks

Tenants pay an application fee of £25 then the equivalent of 20% of one month’s rent paid in small chunks, every month, in line with their rent. 

Housing Hand says there are a number of deposit alternative products such as insurance bonds that are limited in their scope and coverage and only payout at the end of the tenancy.

Terry Mason (pictured), group operations director, adds: “This is a new approach to deposits. By extending our guarantee cover to include deposits, we are providing clear reassurance to landlords.

“We’re also facilitating access to the private rented sector and to purpose-built student accommodation for young people who might otherwise have struggled to come up with the amount required for a deposit.”

With most deposit replacement schemes, the tenant pays a non-refundable fee instead of a traditional deposit of five or six weeks’ rent – in either a monthly or yearly fee; while tenants are still liable for damage at the end of their tenancy, unlike a traditional deposit, they pay a smaller initial amount but don’t get it back.

Read more about deposits.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Deposit-less renting scheme launches claiming landlords will ‘not be out of pocket’ | LandlordZONE.

View Full Article: Deposit-less renting scheme launches claiming landlords will ‘not be out of pocket’

Liverpool council celebrates green light for huge new licensing scheme

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Liverpool Council is jubilant that its selective licensing scheme finally has the green light by the Secretary of State following a protracted battle with the government.

One of the largest in the country, about 80% of the city’s private rented properties in 16 wards will be covered, including 45,000 of the 55,000 properties in the original city-wide scheme which ran from 2015-2020.

In 2019, former Housing Secretary Robert Jenrick thwarted the council’s previous attempt to renew the scheme until 2025, so instead of launching a judicial review it came up with a new scaled-down bid.

An evaluation of the previous scheme found that it had identified 4,350 cases of the most serious category 1 and 2 hazards, issued more than 2,500 legal notices, 169 formal cautions and 197 written warnings, and had resulted in 300 successful landlord prosecutions and 87 civil penalties.

A consultation earlier this year found tenants were generally supportive of the proposal, with landlords and letting agents against it.

No connection

An NRLA spokesman says there is no clear connection between licensing schemes and levels of enforcement.

 “All that happens is that responsible landlords make themselves known whilst the criminals continue to operate under the radar.”

He adds: “The council should instead make better use of the data already available such as that from the Land Registry and HMRC to find and root out altogether those landlords who will never willingly make themselves known.”

Liverpool’s cabinet member for neighbourhoods, councillor Abdul Qadir (pictured), says: “The council will make no profit from the scheme.

“Every single pound we get from landlords will be ring-fenced, paying for our team to be out on the streets every day inspecting homes, chasing disrepair.”

The council is also trumpeting the government’s approval on its website blog where it explains there have been more than 8,400 complaints about the Liverpool’s PRS since April 2020.

It adds: “It is an understatement to say we have missed our proactive powers, our targeted enforcement action and working with landlords to bring properties back into a safe and well managed state.

“We can now look forward to renewing and strengthening our partnership approach with colleagues in planning and building control, environmental health, social services and other areas to drive forward the much-needed changes in our neighbourhoods.”

The scheme launches in April and will run for five years covering Central, Riverside, Greenbank, Kensington, Picton, Tuebrook & Stoneycroft, County, Anfield, St Michael’s, Princes Park, Kirkdale, Old Swan, Warbreck, Wavertree, Fazakerley and Everton.

Liverpool also introduced an Article 4 direction in March to clamp down on any HMO conversions.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Liverpool council celebrates green light for huge new licensing scheme | LandlordZONE.

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Scams cost private rental sector £7 million in 2021, reveals BBC show

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The BBC Radio 4 consumer affairs show You and Yours says 4,800 rental scams were reported by the public this year worth a total of £7 million.

Its presenter Sam Fenwick (pictured) said the programme’s researchers found that rental scams within the private rented sector are a growing problem, aided by the rise of classified platforms such as Facebook Marketplace and Gumtree but also the super-hot rental market in many areas of the UK.

Increasingly, it has become easy for scammers to pinch photos off sites such as Rightmove and Zoopla and upload them to public classified ad portals. They then scam desperate renters by offering to ‘drop the keys off’ after the deposit is paid, but then disappear.

Fenwick also said the rise of Airbnb has facilitated these scams – fraudsters can rent properties, take pictures and even conduct viewings at the properties before taking a deposit and the first month’s rent but then disappearing.

The programme also referenced a story LandlordZONE reported on last month in which an Edinburgh student was scammed of a £2,300 deposit in this way.  

Very common

Speaking on the programme, National Trading Standards spokeswoman Hannah Macmillan said these kinds of online rental scams are now “very common and we see lots of fake property listings”, she said.

Facebook has released a statement saying it is investing people and technology to remove these kinds of ads from their Marketplace platform and is urging landlords and tenants who think ads look suspicious or turn out to be fraudulent to report them to the police.

Gumtree recently told LandlordZONE that it takes all allegations of fraud extremely seriously and that it requires property ads on the site to comply with government regulations for property advertising.

Listen to the show on catch-up.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Scams cost private rental sector £7 million in 2021, reveals BBC show | LandlordZONE.

View Full Article: Scams cost private rental sector £7 million in 2021, reveals BBC show

Smaller Liverpool Licensing scheme approved for 2022

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After having the renewal of the city-wide Liverpool selective licensing scheme rejected by the government in 2019, Liverpool council have been successful with a smaller scheme covering 16 wards of the city. Approximately 45,000 of the original 55,000 properties will be covered.

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Premier League footballer caught up in rent-to-rent sub-letting scheme

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Crystal Palace FC footballer Wilfried Zaha has become embroiled in an alleged rent-to-rent scam involving a block of flats in West London, it has been reported.

The company involved is Z O and Sons Ltd trading as ZO Properties which the 29-year-old footballer joined as a director in October 2017 but resigned in August this year.

It has now been revealed that ZO Properties has been leasing the £2,700-a-month apartments in Maida Vale but sub-let them without consent and collected the rent and, it has been alleged, not been passing on the cash to the property’s owners.

The managing agent for the property’s freeholder told The Sun newspaper that the flats were to be used as staff accommodation, not sub-let on the open market.

Illegal sub-letting of properties by rent-to-rent companies as highlighted by this case are becoming a growing problem within the private rented sector and are giving the reputable providers a bad name, says evictions Paul Shamplina (pictured).

Eviction

“They also make possession claims difficult because it’s often hard to work out who the landlord really is and, as in this case, tenants believe they have paid their rent on time but are facing eviction by the ‘superior landlord’ for non-payment of rent,” he says.

According to the Sun newspaper, ZO Properties’ director Obinna Ogbonna cannot be traced, while the Companies House website reveals that his firm’s latest accounts are overdue by five months and its company website is no longer live.

ZO Properties’ Facebook page describes itself as a ‘leading serviced apartments’ operator in London and features some of the Maida Vale flats. But comments on the page also allege it has been collecting deposits for tenancies, cancelling them at the last moment and keeping the cash.

The Sun newspaper has reported that Zaha is now ‘urgently investigating’ what’s been going on.

ZO’s company address is currently registered at accountancy firm CC Young, but has previously been registered at a flexible workspace near Old Street on the outskirts of the City.

Pic credit: Shutterstock/Facebook

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Premier League footballer caught up in rent-to-rent sub-letting scheme | LandlordZONE.

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Premier League footballer caught up in dodgy rent-to-rent sub-letting scheme

admin    Uncategorized     agents

Crystal Palace FC footballer Wilfried Zaha has become embroiled in an alleged rent-to-rent scam involving a block of flats in West London, it has been reported.

The company involved is Z O and Sons Ltd trading as ZO Properties which the 29-year-old footballer joined as a director in October 2017 but resigned in August this year.

It has now been revealed that ZO Properties has been leasing the £2,700-a-month apartments in Maida Vale but sub-let them without consent and collected the rent and, it has been alleged, not been passing on the cash to the property’s owners.

The managing agent for the property’s freeholder told The Sun newspaper that the flats were to be used as staff accommodation, not sub-let on the open market.

Illegal sub-letting of properties by rent-to-rent companies as highlighted by this case are becoming a growing problem within the private rented sector and are giving the reputable providers a bad name, says evictions Paul Shamplina (pictured).

Eviction

“They also make possession claims difficult because it’s often hard to work out who the landlord really is and, as in this case, tenants believe they have paid their rent on time but are facing eviction by the ‘superior landlord’ for non-payment of rent,” he says.

According to the Sun newspaper, ZO Properties’ director Obinna Ogbonna cannot be traced, while the Companies House website reveals that his firm’s latest accounts are overdue by five months and its company website is no longer live.

ZO Properties’ Facebook page describes itself as a ‘leading serviced apartments’ operator in London and features some of the Maida Vale flats. But comments on the page also allege it has been collecting deposits for tenancies, cancelling them at the last moment and keeping the cash.

The Sun newspaper has reported that Zaha is now ‘urgently investigating’ what’s been going on.

ZO’s company address is currently registered at accountancy firm CC Young, but has previously been registered at a flexible workspace near Old Street on the outskirts of the City.

Pic credit: Shutterstock/Facebook

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Premier League footballer caught up in dodgy rent-to-rent sub-letting scheme | LandlordZONE.

View Full Article: Premier League footballer caught up in dodgy rent-to-rent sub-letting scheme

Levelling the playing field for Peer-to-Peer Islamic Finance alternatives

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Her Majesty’s Revenue and Customs (HMRC) has made a welcome announcement as part of their ‘Building a trusted, modern tax administration system’, a principle first heralded by the government in July 2020. HMRC’s vision is to design a trusted, modern tax system that is simpler

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