Huge selective licensing scheme planned in Brum covering 40% of the city

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Birmingham landlords in 25 of the city’s wards could soon have to apply for a licence if a massive new scheme gets the green light.

The council has launched a consultation to get landlords’ and residents’ views on the plan which, because of its size, would need approval from Housing Minister Michael Gove.

In June 2020, Birmingham introduced a city-wide Article 4 direction, meaning that planning approval is required to convert a family house to any size HMO. A licensing scheme currently only exists for its 6,121 HMOs.

Under the proposed selective licensing scheme, all private landlords in the 25 wards that have been identified as having a high proportion of private rented housing and deprivation, would need a licence. 

Exploitation

It aims to provide a level playing field for good landlords and reduce the risk of tenant exploitation, as well as to reduce crime and deprivation.

The council says it recognises the good work of many private sector landlords in providing quality accommodation for their tenants and has pledged to continue working with the PRS to ensure all landlords provide properties to the same standard.

It also wants to understand the difficulties that landlords face and to help them offer long-term sustainable tenancies.

Shabrana Hussain, cabinet member for homes and neighbourhoods, says the scheme will contribute to the council’s aim of introducing more enforcement and licensing within the sector.

She adds: “I would encourage everyone to provide their views on the proposed scheme. It is only through listening to our residents and communities that we can ensure the licensing scheme focuses on what matters to local residents.”

The consultation runs until 3^rd January 2022 at www.birminghambeheard.org.uk

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Remortgage problems with 0.00% growth?

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My 5 year fixed rates came to an end in June of this year, I began nudging my brokers in September last year, and they only started dealing with them in May of this year.

One mess after another preceded the properties surveys

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‘Bring in blanket landlord and property licencing in England’, urges thinktank

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Property licensing schemes and should be rolled out across all of England, creating a de-facto national registration scheme for the nation’s landlords and their properties similar to the schemes already in operation elsewhere in the UK, it has been claimed.

The non-partisan Centre for Public Data (CFPD) says councils that require landlords to be licensed take more than twice as much enforcement action as those that don’t, identity more than twice as many unsafe homes being rented out and solve a higher proportion of these cases.

Commenting on the report, lobbying group Generation Rent reckons another benefit of a national register could be increased tax revenues, since HMRC has no way to track down landlords who don’t declare rental income.

In the Queen’s Speech, the government promised to consider the merits of a national landlord register and a White Paper is expected this autumn.

Published data

CFPD’s recommendations include that the register be made easily searchable for tenants, that its data is published, and that it be integrated with other property databases for EPCs, deposit protection and holiday accommodation. 

Anna Powell-Smith (pictured), Director of the CFPD, says: “In England, you have to register to run a takeaway or work as an art therapist, but anyone can be a landlord – remarkable given how dangerous it is to live in a property with faulty wiring, boilers or mould.

“A patchwork of schemes will never give renters the protection they need and are an inefficient use of council resources. A national register will be cheaper to run and more effective in raising standards.”

Alicia Kennedy, Director of Generation Rent, adds: “Nationwide landlord registration would give enforcement authorities valuable intelligence about this sector, make it easier to inform tenants of their rights, and prevent criminals from renting out homes in the first place.”

Read more about the proposed national landlord database.

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CIL payment on 15 year old development?

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Hi, any advice would be appreciated. I am selling a flat in a small development. The buyer’s solicitor has asked for proof that the Community Infrastructure Levy was paid.

As far as I know, this is payable by the landowner or developer at the start of the build.

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£65 million does not fully reflect the scale of the problem

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Responding to new Government funding to tackle Covid rent debts, Chris Norris, Policy Director for the National Residential Landlords Association said:

“We welcome the announcement of this funding and urge local authorities to target it at those tenants most struggling with Covid rent debts.

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BREAKING: Minister launches £65m rent fund for tenants facing eviction

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Housing minister Eddie Hughes has announced a £65 million rent payment support package for private renters facing eviction or homelessness ‘during the winter months’ and thanked landlords for their help supporting struggling tenants during the pandemic.

Eligible households should contact their local council if they require support, although it is up to individual local authorities to work out the best way to support each household on a case-by-case basis.

Any money is likely to be paid directly to the existing landlord, or a new landlord if the money is being used to support a household to find a new home.

This announcement, which references the long evictions ban during the pandemic, follows months of lobbying by the NRLA and many other organisations to offer struggling tenants direct financial to help pay their rent.

The Department for Levelling Up, Housing and Communities (DLUHC) say this is on top of the £500 million of indirect support for vulnerable families provided during Covid via its Household Support Fund.

The funding will be given to councils in England specifically to support low-income earners in rent arrears and ‘helping to prevent homelessness and support families get back on their feet’.

Vulnerable

Housing Hughes (main pic) says: “We have taken action throughout the pandemic to support the most vulnerable families, and it is vital we continue to provide support as we enter the winter months.

“This new funding will support families that are struggling and help to get them back on their feet as we begin to recover from the COVID-19 pandemic.”

Chris Norris, Policy Director for the National Residential Landlords Association says: “It is great news that those households worst hit by Covid related arrears may be able to access financial support. However, £65 million does not fully reflect the scale of the problem. NRLA analysis has put the figure of Covid rent debts at over £300 million.”

The Joseph Rowntree Foundation goes further, saying that: “We estimate that the group this support is targeted at has built up around £440m of rent arrears,” a spokesperson says.

Extra money

Alicia Kennedy (pictured), Director of Generation Rent, says: “Generation Rent has long warned the government of the devastating effect that rent debt has on people’s lives, so we welcome this new funding and its recognition of how hard private renters have been hit in the past 18 months.

“It’s a significant step forward that will help keep people in their homes when they would otherwise have been evicted.

“But with rents rising and Universal Credit cut, we fear it won’t be enough to prevent families hitting crisis point.”

Shelter boss Polly Neate adds: “With winter approaching, the government is absolutely right to act to keep people safe in their homes and prevent a wave of evictions and homelessness. For those who can access it, this funding will be a lifeline.”

The extra money will be provided as a top-up to the government’s £310 million Homelessness Prevention Grant.

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Landlords ‘to pay higher mortgage premiums for properties below minimum EPC standard’

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Landlords have been warned within the government’s Heatings and Buildings Strategy that they face having to pay higher mortgage premiums if they buy or remortgage properties that do not meet minimum EPC standards.

The proposals are part of, and run alongside, the government’s plans to make Britain ‘net zero’ by 2050.

But despite 17 million out of the nation’s 29 million homes being EPC band D or below, the government expects the scheme to be voluntary and market-based at first, using the lure of lower interest rates offered by lenders to persuade landlords and home-owners to upgrade their properties.

The scheme will have to be ambitious to succeed – the government estimates the cost of upgrading these 17 million homes to be up to £65 billion.

But if the green mortgage scheme is not successful and housing stock upgrade targets are not met then the government is proposing to make it mandatory for lenders to have all properties within their managed portfolios reach EPC Band C by 2030.

The lending market is at least beginning to respond – some lenders now have ‘green mortgages’ which offer lower interest rates for eco homes But progress has been slow.

Effectiveness

“While green mortgages are potentially a good way of encouraging the implementation of energy efficiency measures, the current low mortgage interest rates in the market are likely to reduce their effectiveness in this regard,” says a spokesperson for the National Residential Landlords Association.

“The Government’s English Housing Survey confirms that the private rented sector has the highest proportion of older dwellings of all tenures, with 32% built pre-1919.

“The cost of upgrading these properties to the highest energy efficiency ratings is significant, and the savings of a green mortgage are unlikely to be sufficient to cover this.

“What is needed in the future is a more strategic approach which recognises the specific challenges facing many landlords in the private rented sector is needed.”

The strategy document also proposes to prevent new-build homes from connecting to the gas grid in England from 2025.

A recently-closed consultation on requiring all rented properties to meet a minimum EPC band C by 2030, with an announcement expected later this year.

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Calls for major reform of business rates ahead of Cop26

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The CBI and 40 industry trade associations have issued a statement calling on the Chancellor to consider sweeping reforms of the business rates system in the forthcoming Budget later this month, emphasising the urgency of reform.

Combined, the statement represents the views of employers of around 261,000 businesses and nine million employees, including British Retail Consortium, UK Hospitality and SMMT. They are arguing that reform of the long derided business rates system is essential if the Government is to reach its green investment targets.

Autumn Budget

The autumn Budget will take place on 27 October and these trade associations think this is an ideal time to reform what they collectively see as an outdated and outmoded business rate regime which acts as a drag on the Government’s goal of a high wage, high productivity and high investment economy. They think that reform of the system could unleash a wave of business investment which will lend support to the key Government priorities of working towards net zero and levelling up.

Currently, as the system operates, 50 per cent of business investment is potentially subject to business rates. The system thereby actively acts as a disincentive to new business investment and to decarbonisation. Without new investment there will be no improvement in the all-important productivity rates, the only sustainable route to higher wages, the statement argues.

CBI Chief Economist, Rain Newton-Smith, says:

“Action to get investment flowing into and around the UK is sorely needed to reinforce our recovery. The Government deserves credit for convening the supply chain advisory group to unblock temporary challenges, but as we’re seeing with energy prices, there is no substitute for longer-term planning and investment.

“The Chancellor has an opportunity to fix this, starting with fundamental business rates reform at the Budget and Comprehensive Spending Review. By setting out an approach which attracts investment, he can equip the UK with the tools it needs to secure the high wage, high productivity and high skill economy of the future.

“With up to half of business investment potentially subject to business rates, it has literally become a tax on investment. Action to stimulate investment, starting with business rates reform, unites firms spanning the whole economy. If the government is serious about achieving its net zero ambitions, kicking reforms further into the long grass cannot be the answer.”

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, says:

“Sky high business rates are closing stores up and down the country and preventing new ones from opening. A recent BRC survey found that four-in-five retailers will be forced to close shops unless the rates burden falls following the Government’s upcoming Fundamental Review. Without change, the areas most in need of levelling will be hit hardest, and the Government’s levelling up agenda will fail. The choice is clear – cut rates and boost investment and jobs, or leave them unchanged and see more shops closed and jobs lost.”

Business Rates Consultation

Following a recent business rates consultation and review the Government has confirmed that policy announcements on business rates are to be made this autumn. The statement reminds Government that UK business need to see “fundamental reform of the system” if it is to address these long-standing barriers to investment.

The forthcoming business rates revaluation is coming two years later than planned and seven years after the last revaluation, a delay that has made worse an already dysfunctional system.

Major shocks to the system

The statement argues that the current system creates “major shocks” to businesses and local government revenue streams, and the system is not responsive to economic conditions. The current five-year revaluation cycle means that “over time businesses are often paying rates based on out of-date valuations.”

The system involves a “long and technical process of valuation, and a lack of correlation between the rates and businesses’ ability to pay”, plus the annual changes in the business rate multipliers, all combine to make the system opaque and hard for businesses to navigate, says the statement.

The business rates appeals system also creates financial uncertainty for local authorities. There is constantly a large volume of appeals to the Valuation Office Agency and the delays in solving these cases creates uncertainty for authorities, meaning they may have to refund several years’ worth of rates to businesses, playing havoc with their budgets.

Finally, the current system can reward perverse behaviour as it rewards large “space-hungry developments” often out of town, often to the detriment of town and city centres.

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Eco Clampdown on landlords and fines of up to £5,000

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New support for councils to raise awareness and enforce rules banning landlords renting homes with worst-performing energy efficiency ratings has been announced by the Department for Business, Energy & Industrial Strategy.

Along with a campaign to fund local radio ads

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Was this landlord right to be fined over his ‘agricultural tenancy’ repair failures?

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A landlord who failed to repair his tenant’s property, arguing that it was not his responsibility under an agricultural tenancy, has been fined £8,500 despite a leading property law expert questioning the veracity of his enforcement notice.

Jonathan Clough Williams-Ellis, 62, who owns Parc Glasfryn near Pwllheli and other properties, was found guilty of ignoring an improvement notice to repair damp and other issues at his 220-year-old farmhouse.

He has been fined £2,250 and ordered to pay £6,250 towards costs and a £190 victim surcharge by Caernarfon Magistrates Court.

A previous hearing heard that the businessman “buried his head in the sand” when ordered to tackle damp and other issues at his tenants.

Williams-Ellis, 62, insisted it was his tenant’s responsibility to deal with problems inside the property because they had a tenancy agreement under the Agricultural Holdings Act 1986, while he looked after the outer walls and roof.

Magistrates disagreed, saying responsibility for the property lies with the landlord regardless of any contractual arrangements.

The court heard the authority had sent out an Improvement Notice in 2019 to do the work on the five bedroom, two-storey, detached building, including repairing damp, installing a mains-operated fire alarm and other issues.

Wilful blindness

Chairman of the bench Elfed ap Gomer said Williams-Ellis had shown “wilful blindness” in not complying with the improvement notice over the damp.

However, David Smith, property solicitor at JMW, says the landlord should have appealed the notice at a tribunal as it shouldn’t have been served on him.

He tells LandlordZONE: “It wasn’t the most appropriate penalty. The local authority should have taken the type of tenancy into account and replaced it with a Hazard Awareness Notice.”

Under an agricultural tenancy, landlords usually have to repair and maintain the outside of the property, the heating system, gas water and electricity.

They can claim compensation at the end from tenants for disrepair such as not repairing the farmhouse in line with the obligations in the agreement.

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