LATEST: Judge gives key ruling on ‘shared property’ rental deposits

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London’s County Court has set a worrying precedent for landlords who operate properties that are rented ‘jointly and severally’ but where, over the years, tenants have been left to sort out their own deposits as tenants come and go.

The judgement by Judge Luba QC concerns landlord Richard Boddy who bought a property in Maida Vale, London (pictured) in 2003 as his home.

He later moved out and rented the three-bedroom flat as a ‘house share’ with the tenants jointly and severally responsible for paying the rent and bills.

This arrangement continued via three ‘churns’ of tenants until Covid struck, whereupon it fell apart after one tenant packed her bags and returned to Australia, requesting that her deposit cover any cleaning charges and unpaid rent.

Damages

At this point the remaining tenants sought damages arising from the non-protection of their deposits, arguing that a new tenancy should have been issued by the landlord at each ‘churn’ and that, therefore, their deposits should have been protected.

At a hearing earlier this year the judge dismissed their claims agreeing with the landlord that they were licencees and not tenants and therefore, because they did not have ASTs, the deposit did not need to be protected.

But the tenants, who still live at the property, took the case to appeal and have now won.

Judge Luba (pictured) agreed with them that each ‘churn’ was in effect a new tenancy and that their deposits should have been updated and protected afresh.

Read the full judgement.

He was also somewhat poetic in his judgement, highlighting how the only evidence of the original tenants was their unclaimed and ‘dog eared’ post festering in the hallway.

Boddy must pay £3,615 which is £1,205 in respect of each of the three churns which produced a new tenancy to which they were in turn either or both parties to.

Luba gave the lightest penalty he could to the Boddy as he felt that the landlord had not purposefully tried to dodge his deposit protection obligations.

The judgement affects other areas of PRS law, in particular evictions; one of the many reasons tenants can avoid eviction is if a deposit has not been properly lodged with an approved scheme, although landlords can return deposits prior to an eviction to avoid this.

Julie Ford of HF Assist (pictured) comments: “This case highlights the importance of both landlords and agents keeping accurate paperwork and taking the time to know who is in their property.

“Compliance is the most important part of renting a property and even the most hands off landlords are not immune to the ever changing minefield of legislation.”

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‘Rock star promoter’ landlord must pay back £11,700 to tenants at unlicenced HMO

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A rock star promoter who was too busy touring with A-list musicians to realise he should have had an HMO licence has been ordered to pay back thousands of pounds to his tenants.

Robert Hallet (pictured, above), who has toured or promoted with The Rolling Stones and Justin Bieber, told a First Tier Property Tribunal he was unaware he needed a licence because he hadn’t been told by managing agent NorthWest6.

The ‘global touring expert’ said he was out on the road with bands for most of the year when he could be responsible for the logistics of a tour involving 120 people.

Hallet explained he was not a professional landlord and had used the same letting agency for the last 15 years. This was the first time it had let the property in Kilburn, North London (pictured) to sharers in this way.

Reported to council

His three tenants, Joseph Landes, Alex Parker and Lauren Rosenberg lived at the HMO in Christchurch Avenue, London, from September 2019 and contacted Brent Council in March 2020 about their landlord’s failure to repair a shower and also reported that the house was unlicensed.

Hallet insisted he had responded to any complaints and concerns about repairs at the property in a timely manner and that he had applied for a licence as soon as he was made aware of this.

But the tribunal ruled that his relationship with the managing agents was ad hoc and that he had assumed the day-to-day management of the property.

Hallet’s absence from the country and lack of experience of property management did not amount to a ‘reasonable excuse’, the Tribunal said. It made a rent repayment order totalling £11,712 with £300 costs.

Pic credits: Google Streetview/Twitter

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Green group urges politicians to support new bill ushering in stricter EPC rules for landlords

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Industry body the Sustainable Energy Association is calling for MPs, Lords and the government to support the Minimum Energy Performance of Buildings Bill when it is introduced in both Houses this week.

The Bill, which would mean all private rented sector homes would need to be EPC band C by 2028, advances the government’s energy efficiency commitments set out in the Energy White Paper and aims to help achieve net zero and lower household fuel bills.

Jade Lewis (pictured), association chief executive, says it hopes the Bill receives the support it deserves.

“It can deliver a lasting impact on the energy efficiency of homes up and down the country whilst addressing key public interest concerns such as unemployment, fuel poverty and climate change,” she says.

“We are proud to have campaigned for this policy certainty over the past few years and I believe that we are closer than ever to the breakthrough we have been working towards.”

Many in the PRS have voiced concerns that the deadline puts too much pressure on landlords, particularly following Covid, and could threaten already strained stock levels. 

Last November, we reported that the Lettings Industry Council had written to the Ministry of Housing, Communities and Local Government, urging a more staggered approach to improving energy standards in the private rented sector than those put forward by the Department for Business, Energy and Industrial Strategy.

Energy Performance Certificates (EPCs) measure the efficiency of a home, rated from A – G; two-thirds of UK homes fall below the average band C.

Read more about the controversy surrounding EPC Band C ratings.

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Exodus from city offices boosts demand for neighbourhood space

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The future for city centre office use remains uncertain until we see how the return-to-work drive pans out, but in all likelihood fewer people will travel into these offices on a daily basis. There could be more working from home, and as companies take space in smaller neighbourhood offices and retail units.

The theory appears to be being borne-out in practice, with the likes of South London property agents Henshall & Partners reporting a 60% surge in demand for suburban leases.

Henshall’s MD, Chris Henshall says their figures show that demand for ‘fringe neighbourhood’ commercial space in London has increased by 60% in the past six months, an office type which fits-into what is likely to be future remote and flexible working very easily.

Small neighbourhood offices allow office workers to avoid public transport, to travel in by car, providing there are parking spaces, greatly reduces travel time, and allows specific teams to meet regularly, maintaining that all-important continuity of work-flow and personal contact – something that’s almost impossible to fully replication on-line.

The move will be a boom to small-scale commercial office landlords, whose office space had largely fallen out of favour, and it’s likely to revitalise some high streets as cafes, restaurants, and supermarkets start to expand out of central London and other major cities.

Henshall reports that already several food and beverage businesses have anticipated the change, acting quickly to relocate as more flexible home workers start visiting local shops.

Over recent months, Henshall & Partners have managed to secure leases on several suitable premises, deals which were typically, until now, in unviable parts of London.

Henshall cites, as an indication of the trend, deals including a German Donor Kebab franchisee on Eltham High Street, letting for 40% more than the previous tenancy, a Turkish grill and lounge bar on Lewisham Road, which has let for £40K per year, and an organic café in Greenwich which let for £30K a year

A retail unit on White Hart Lane Tottenham has sold for £700,000 and is set to open as a supermarket, topping off a string of deals which show the trend is more than just a “flash in the pan”.

Rents in places like Greenwich and Lewisham are markedly cheaper than in the West End or the City – posing something of a threat to some of the mega landlords in the city with high-rise blocks, And also city centre retailers, but Henshall & Partners see this “rebalancing” as a positive for local neighbourhoods, and as an emerging way forward for London businesses without hurting the mega landlords too much.

There are signs that City and West End businesses are now over the worst as workers gradually drift back to their offices, albeit with considerably enhanced Covid precautions and re-structured floor space.

Chris Henshall’s MD says:

“In recent months we have seen an increased demand for commercial property in London’s fringe neighbourhoods, most notably from the food and beverage industry. This uptick in commercial demand highlights flexible working being implemented across the capital. I am however keen to see a more balanced approach from employers as restrictions are eased with time in the office essential for productive business and its importance to younger employees to learn and prosper”.

Henshall & Partners was founded in 2017 by Chris Henshall, who has over ten years of experience in the commercial property industry. Henshall & Partners offer services focused on land, development and investment properties across London and the Southeast.

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BREAKING: Tenant referencing revolution kicks off as Ministers consult on digital identity plans

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A revolution in tenant referencing is around the corner now that the Department of Digital, Culture, Media and Sport has launched its consultation on the much-heralded digital identity programme.

This will see a national framework established that will eventually introduce a system whereby people can prove who they are via their digital identity profile most likely through either a website or a smartphone app.

This would remove many of the barriers landlords and letting agencies face when referencing tenant and, at a stroke, significantly reduce tenant fraud within the housing market.

It would also be used when buying a home, setting up a bank account, proving one’s age in a pub, proving your have a valid driving licence and a myriad other uses.

Moving house

“If someone wants to prove who they are when starting a job, moving house, or transacting online, they ought to have the tools do so quickly and securely in a digital manner, as an option alongside using the physical documents we are most familiar with,” says Matt Warman MP, Minister for Digital Infrastructure a the DCMS (pictured, above).

“Too often, people in the UK have to use a combination of paper documents issued by government, local authorities and the private sector – and a mixture of offline and online routes – when they need to prove something about themselves. And they must repeat the process for each new transaction.”

Warman says the government is committed to realising the benefits of digital identity, without creating the controversial system of ID cards. The consultation on the project, which includes proposals to set up a governing body to administer the digital checking system, and a way for people to seek redress if information is inaccurate, closes on September 13^th.

Read the proposals in full.
Read more about tenant referencing.

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BREAKING: Housing benefit fraud and overpayments now ‘rife’ says National Audit Office

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Spiralling fraud and overpayments in the benefits system now stand at the highest rate ever recorded, admits the Department of Work and Pensions (DWP), as it identifies housing payments as an area of concern.

Housing benefit fraud is particularly rife after the pandemic resulted in more relaxed checks to ensure a record number of new Universal Credit claims – up from three million to six million – could be processed and paid.

To help people with their housing costs, DWP administered some £30 billion of housing support through Housing Benefit and Universal Credit during 2020-21, with additional financial assistance paid through the Local Housing Allowance.

Excluding State Pension, DWP estimates it overpaid £8.3 billion of the £111.4 billion that it spent on benefits during 2020-21, an increase of £3.8 billion on the previous year.

Nearly all of the increase in fraud and error was on Universal Credit; DWP estimates it overpaid £5.5 billion of UC (14.5%) and underpaid £540 million (1.4%).

The DWP has identified four key fraud and error risks; it wants to improve controls over incorrectly reported self-employment earnings, savings, living arrangements and housing costs.

NAO boss Gareth Davies (pictured) says the issue has a real impact on public funds and on those who face deductions to their income due to overpayments.

He adds: “I recognise that the pandemic and the resulting surge in the number of claimants has increased DWP’s exposure to fraud and error.

“It must now review all cases that could have been subject to fraud during this time, whilst continuing to progress our past recommendations on how to reduce fraud and error.”

Read more about DWP payment problems.

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LATEST: By next year half of all landlords will be women

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Female landlords are closing the gap on their male counterparts as they turn their backs on stocks and shares to invest in property.

Women now make up 48% of the 2.6 million buy-to-let investors in the UK, up from 47% in the previous year, according to Ludlowthompson, which reports that the number of residential property landlords who are women increased by 2% to 1.25 million for the most recent tax year, up from 1.2 million the previous year.

The estate agency says buy-to-let investments have traditionally been more popular among female investors than other assets; women account for 44% of investors in stocks and shares ISAs and represent just 15% of Bitcoin traders.

Women now receive 44% of all income from buy-to-let investments (£16.1 billion of a total of £36.4 billion in income), up 27% since 2014/15 from £12.7 billion. In the same period, the total income for male landlords has grown 15%, suggesting that women have been adding to their portfolios of buy-to-let properties much faster than men.

Ludlowthompson chairman Stephen Ludlow (pictured) says the buy-to-let market has built a reputation of delivering long-term, stable returns to investors looking for income and long-term growth.

“With the gender gap in buy-to-let ownership narrowing year-on-year, it might not be long until we see a 50:50 gender split amongst buy-to-let investors,” adds Ludlow.

“This is a significant step considering the much wider ownership gap in other asset classes, such as equities and cryptocurrencies.

“Buy-to-let property is a sensible way to diversify an investment portfolio and you are competing against fewer professional investors than in stock market investments.”

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Government report lifts lid on ‘lazy landlords’

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Lazy landlords are causing thousands of English renters to feel dissatisfied with the state of their homes.

Figures from the latest English Housing Survey show 17% of private tenants aren’t happy – equating to some 748,000 families who could be living with damp, faulty electrics or dodgy plumbing.

One in four renters report being dissatisfied with the repairs and maintenance carried out by their landlord; the three most common reasons cited were that the landlord didn’t bother doing repairs or maintenance (35%), the landlord was slow to get things done (25%) and that their landlord did the bare minimum (15%).

The figures also show that 23% of privately rented homes (and 12% of socially rented homes) fail to meet minimum standards, 13% of privately rented homes contain a hazard and 11% don’t have a working smoke alarm.

Renting campaigner Ajay Jagota (pictured), founder of specialist claims management firm Veriwise, says the figures really bring home how many people in England are living in danger and squalor as a result of landlords not taking their responsibilities seriously.

He adds: “In every corner of the country there are renters wondering why their landlord won’t get rid of rats or wondering how long a landlord has to fix an electrical problem or can legally leave them without heating – all knowing that any complaints will probably get them nowhere.”

The English Housing Survey collects information about people’s housing circumstances and the condition of housing in England.

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Private rented properties cost on average £7,600 to upgrade to EPC Band C – official

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The private rented sector won’t meet new energy efficiency targets unless the government stumps up more cash for any replacement to the Green Homes Grant, it has been claimed.

Latest English Housing Survey figures show that the average cost to bring a privately rented property up to EPC C is £7,646 compared to £5,979 for a social rented property, or £8,579 for owner occupiers.

The Green Homes Grant scheme provided householders and landlords with support for the cost of installing energy efficient improvements in their home. However, the government only funded up to two-thirds of the cost of home improvements up to £5,000 under the scheme, which closed in March.

Timothy Douglas, Propertymark’s policy and campaigns manager, believes a long-term, costed and well-funded plan is desperately needed to encourage households and landlords to make energy efficiency improvements.

He says the survey also clearly highlights how the Green Homes Grant scheme wasn’t offering enough support based on the proposals to improve properties to EPC Band C.

“Any revised or reintroduced scheme must be increased from £5,000 to £10,000 maximum,” says Douglas (pictured).

“Similarly, it is vital that the UK government move away from a one-size fits all policy and develop energy efficiency proposals that work with the different age, condition, size and location of properties across the country. This way, grants and funding support can be targeted on the architype of a property rather than its tenure.”

In December, LandlordZONE reported that the scheme hadn’t managed to recruit enough accredited tradespeople to undertake the work.

Landlords who applied for vouchers have now been told they might not be able to get work done on time; they can request an extension until 31st July and vouchers will be extended for 90 days or until 31st October, however some builders are warning they won’t be able to do the work before this deadline.

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Rental Index Live! Talk to the experts at Belvoir’s free property webinar…

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If you are a landlord your number one concern is probably ensuring that your investments are performing to their maximum potential. But how often do you take time to review your portfolio, and catch up with industry experts to find out about any changes to the rental market in your area? Post lockdown Britain paints a very different picture to pre-March 2020, making it more important than ever to keep up to date with developments. Are you sure you are fully informed about how rents are performing in your area? Do you wonder whether you should be charging more or less rent? Do you have tenants who are now in arrears and are you confused by changes to eviction laws?

Click here to register for Belvoir’s Rental Index Live webinar

Belvoir, which has over 170 offices nationwide, is one of the largest property management franchises on the UK High Street, with local business owners who are able to answer all of your questions. Belvoir is constantly monitoring the UK rental market and for the past 11 years has examined advertised rents each quarter to provide a unique rental index, focusing on regional landlord and tenant trends right across the country. This valuable resource is made freely available to landlords via the Belvoir website (www.belvoir.co.uk) and is well worth a read to see how rents are performing in your area. Importantly however, Belvoir also conducts a quarterly survey of franchisees across the network, seeking their views on current issues, and asking for predictions of what they think is likely to happen to rents in the next quarter.

The most recent survey, which is collated for Belvoir by property expert Kate Faulkner, provided a snapshot of how the High Street was coping during the first quarter of 2021. It also looked at what agents thought would happen as the year progressed. Check out the results…

Flats

• 10% of Belvoir offices, including Leamington Spa, Wembley, Aberdeen and Edinburgh, reported a decline in rents.
• 74% of Belvoir offices, including Swansea, Perth, Bangor, Warrington, Bolton, Newcastle Central, Yorkshire, the South West, most of the South East, East and West Midlands reported a rise in rents.
• 15% of offices, including Tynedale, Nottingham, Southampton, Boston, Westminster and Chester reported static rents.

Houses

• Belvoir Westminster, Wembley and Swansea were the only offices reporting rental decreases.
• 79.5% of Belvoir offices, including the North West, North East, Yorkshire, South West, most of the South East, West Midlands, East Midlands, Perth and Bangor, reported a rise in rents.
• 13% of offices, including Watford, Leamington Spa, Boston, Nottingham, Edinburgh and Aberdeen, reported static rents.

Click here to register for Belvoir’s Rental Index Live webinar

Rental forecasts for Q2 2021

• No Belvoir offices forecast rental decreases.
• 74% of Belvoir offices forecast rental increases.
• 26% of Belvoir offices forecast rents staying the same.

Houses

• No Belvoir offices forecast rental decreases.
• 82% of offices, including London, North East, Yorkshire, Scotland, most of the West Midlands, South West, East Midlands, Southampton, Portsmouth, Brighton, Thanet, Warrington, Chester, Swansea and Bangor forecast rental increases.
• 18% of Belvoir offices, including Boston, Bolton, Harlow, Watford, Tunbridge Wells, Devizes and Evesham, forecast static rents

Summary: Belvoir’s survey confirms that rent increases for flats are now catching up with house increases. A total of 90% of offices saw rises/static rents for flats, and 93% saw rises/static rents for houses. Not a single office forecast falls in rents for the next quarter! This confirms the ‘race for space’ is happening in both the rental and sales market. BTL remains a robust investment, typically doing well during a recession as well as a pandemic.

Rental Index Live webinar

To find out more about the current ‘race for space’ and other rental trends including any concerns you may have about rent arrears, why not register for Belvoir’s FREE Rental Index Live webinar that is being hosted at 7pm on 28th July by Channel 4’s Paul Shamplina and a panel of Belvoir franchisees from across the UK? You can hear their views, submit a question, and find out how to ensure that your BTL investments are performing to maximum potential throughout the second half of 2021. It’s a fantastic opportunity, so don’t miss out!

Click here to register for Belvoir’s Rental Index Live webinar

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