Landlords to face penalties if they earn kick-backs from referring utilities to tenants

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Landlords will soon have to be transparent about referral fees when they recommend services such as utilities to tenants, a senior Trading Standards chief has warned.

James Munro made the comment yesterday during a Propertymark webinar after being asked whether landlords are covered by his organisation’s proposed new approach to referral fees within the property industry.

Munro heads up the National Trading Standards Estate and Letting Agency Team which despite its name covers anyone letting out properties including landlords, and wants to clamp down on referral fees harder.

Although existing Consumer Protection Regulations (CPRs) already cover referral fees Munro says they are too vague and he has recommended to Ministers that more specific regulations are introduced.

Capacity as a landlord

“The CPRs apply to all businesses not just sales and lettings agents; there is case law to suggest that when private landlords are acting in the capacity of a landlord they are not private individuals [but instead] are a business, and therefore the CPRs apply to them,” he says.

“This would include when they recommend a service, but it’s a complicated scenario so we will provide clarification at a later date.”

Sean Hooker (pictured), Head of Redress at the PRS, says: “Landlords are increasingly being held to the same standards as agents.

“They must abide by the same laws and act as professionally as any business.

“We are moving towards a more regulated environment in England, with landlord redress, registration and regulation around the corner. “Landlords should therefore be abiding by this guidance, especially if they are company landlords and acting in a commercial capacity.

“Smaller landlords may well want to use a good and compliant agent who can protect their interests.”

Read more about trading standards.

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Belvoir lettings Index, latest news for Q3 2020

admin    Uncategorized     agents

The latest information on rents and from the Belvoir rental experts, shows that the market post the first pandemic lockdown, continues to perform very differently across the UK.

However, the main ‘takeaway’ is how well properties continue to rent in most places, whatever happens to the economy, even when it comes to a ‘full stop’ as it already has twice this year.

The best bit of news so far this year for landlords and the rental market is that home moving has been allowed to continue, despite a second lockdown. This allows new rental properties to be let and if tenants want to leave existing homes, they can re-let. Of course, the bad news is that if a tenant doesn’t pay their rent or causes issues, it’s very difficult to currently evict them.

Latest essential ‘takeaways’ for landlords
There are five key things to know from this quarter’s rental index: –

1. Nationally rents have hardly changed
   The index shows that, on average, rents for the UK in Q3 2020 were £747 per month, which showed a very slight fall versus 2019’s Q3 average of just -1%, which considering the economic ‘destruction’ over the last few quarters shows how robust the rental market is, even when the economy isn’t.
2. At a local level, some rents are up, some down!
   Whether it’s Brighton and Hove where Nathan Crombie reported “increased rents and demand for houses and flats during Q3 2020 and anticipates rents to continue rising over the next quarter, with demand decreasing.” Or in Edinburgh where Lisa Conquer explains “rents remained unchanged across the board, whilst tenant demand increased for all properties due to previously following a stricter lockdown.” Although most rents are static to rising, each area and property type can be showing different trends, so it’s vital to get expert opinion on what’s happening to rents from local experts such as Belvoir if you are thinking of investing into buy to let, selling your existing rentals or re-letting to a new tenant.
3. Houses are, in the main performing better than flats
   According to the individual experts from Belvoir, around 40% of offices saw flat rents unchanged or falling, while 60% increased, still mostly good news! In contrast a staggering 83% of offices saw house rents rise, with hardly any falling and the rest remained unchanged.
4. Arrears are on the up
   To be expected due to the current circumstances, but rare when letting through Belvoir, 70% of offices normally report less than three tenants in arrears per office, whereas in Q3 this fell to just over 30%. And although this was a trend that started pre-Covid, around 50% of offices are now seeing rent arrears from 4-10 tenants. It isn’t yet time to worry as this still equates to less than 3% of tenants.
5. Number of properties available for let, in the main is tightening
   Although some landlords are still buying new properties to let, around 44% of offices saw no additional properties bought by their landlords, while just over 80% of offices saw anything up to 5 properties being sold. For those landlords staying in the property market, tenants are currently tending to stay in properties for longer, this will restrict the number of properties coming onto the market in many areas.

Regional, local town and city level… what’s happening?
The Belvoir Index is a little different to other rental indices in that we don’t just rely on ‘stats’ from a spreadsheet, we survey a range of individual Belvoir experts so we know exactly what’s happening to rents at a local level now and what’s expected to happen in the future.

It’s this level of detailed knowledge ‘on the ground’ that’s vital for investors and landlords to know what’s really happening to existing rents and newly let properties, rather than relying on national or regional data which can be heavily skewed, or indeed out of date.

Here’s a snapshot of some of this quarters expert commentary:-

South West

Bournemouth

Marcin Owczarek of the Bournemouth office reported increased rents and demand across the board for Q3 2020 and expects this trend to continue into Q4 2020. The office has a shortage of all properties.

For more detailed reports from offices in the South West, including: Devizes, Christchurch and Gloucester, please read the full report.

South East

Watford

For Q3 2020, William Venter confirmed decreasing rents and demand across the board. Looking forward to Q4 2020, both rents and demand for all properties are expected to remain unchanged. The Watford office is currently short of two bed flats, but has an excess of smaller flats and three, four and five bed houses.

For more detailed reports from offices in the South East, including: Tadley, Harlow, Tunbridge Wells, Thanet and Brighton and Hove, please read the full report.

East Midlands

Nottingham

According to Lloyd Rumbold both house and flat rents increased over the course of Q3 2020, with demand remaining static for all properties. Over the next quarter, rents across the board are likely to increase with demand increasing for houses but remaining unchanged for flats and room rents. Nottingham has a shortage of studio flats through to three bed houses.

For more detailed reports from offices in the East Midlands, including: Melton Mowbray, Newark, Bedford and Milton Keynes, please refer to the full report.

West Midlands

Rugby

For Q3 2020, Rosie Callaway confirmed static rents and demand across the board but expects rents to decline over the next quarter with demand remaining unchanged. Rugby has a shortage of three bed houses and an excess of one/two bed flats.

For more detailed reports from offices in the West Midlands, including: Leamington Spa, Stoke on Trent, Shrewsbury, Stafford and Stone, Telford, Evesham and Stratford upon Avon, please read the full report.

Wales

Swansea

According to Ben Davies, all rents and demand increased during Q3 2020, however, rental levels are expected to remain unchanged for Q4 2020 with demand decreasing. Swansea has a shortage of one bed flats and an oversupply of two bed flats.

Northern Ireland

Newtownards

For Q3 2020, Trevor Burns has confirmed increased rents and demand for all properties with this trend likely to follow into the next quarter due to a lack of supply and continued high tenant demand. The Newtownards office is experiencing a shortage of all types and sizes of property.

North West

Burnley

According to Michael Green of the Burnley office, rents for flats and houses increased across the board due to a shortage of all property stock during Q3 2020, with demand also increasing for all properties. Looking to the next quarter, it is predicted that rents are likely to remain unchanged but demand increasing for all properties.

Yorkshire & Humber

Doncaster

According to Chris Duffy, during Q3 2020, rents increased for flats and houses. Tenant demand also increased for all properties. Rents are expected to continue rising over the next quarter due to the high demand/shortage of stock, however, demand is likely to remain stable. Doncaster has a shortage of all types of property.

For a detailed report from the Skipton office, please read the full report.

North East

Newcastle upon Tyne

Howard King reported that rents for city centre flats increased but not for flats in the suburbs, whereas all house rents increased across all areas during Q3 2020. Tenant demand remained unchanged for flats, increased for houses and fell for HMOs. Over the coming quarter, rents for both flats and houses are expected to remain unchanged with room rents decreasing. However, tenant demand is likely to increase for all properties with the exception of room rents which are likely to decline. There is a shortage of studio flats through to three bed houses.

For a detailed report from the Tynedale office, please refer to the full report.

Scotland

Falkirk

For Q3 2020, Gillian Inglis has confirmed increased rents and demand for all properties but expects rents to remain unchanged over the coming quarter, with demand increasing. The office is experiencing a shortage of one, two and three bed properties.

For more detailed reports from other offices in Scotland, including: Edinburgh and Dundee, please read the full report.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Belvoir lettings Index, latest news for Q3 2020 | LandlordZONE.

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Landlords must ‘go green’ as government reveals gas boiler ban for rented properties

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The Government is to phase out gas by 2035 as part of its green ten-point plan announced this week, meaning millions of boilers across the private rented sector are on borrowed time.

CEO of the Chartered Institute of Plumbing and Heating Engineering (CIPHE), Kevin Wellman, understands landlords’ concerns that a move to green technology and more energy-efficient homes will incur additional costs and disrupt tenants.

But he says those landlords looking to make the change now should use the Green Homes Grant to help enhance the energy efficiency of their existing housing stock.

“Reducing energy waste is just as important as moving over to clean energy and will result in reduced heating bills and more comfortable homes,” Wellman tells LandlordZONE. 

Under the new plan, gas boilers will also be banned in all newly built homes within three years to help Britain reach its target of net zero emissions by 2050.

The ‘future homes standard’ will require all new homes to have low-carbon alternatives, such as electric heat pumps.

But in a consultation document, the Ministry of Housing has noted that, “there may not be the necessary supply chains, trained installers and product availability needed for every home-builder”.

A report by the Committee on Climate Change has also previously highlighted issues around a lack of qualified heat pump installers. 

The CIPHE is more confident that the UK can make the change. Adds Wellman (pictured): “The infrastructure is not in place for wholesale adoption of low carbon heating – we need approximately 100,000 engineers trained to install the new technology – but a rapid pace of technological change is something those in the heating industry are used to.” 

Read more advice on boilers.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords must ‘go green’ as government reveals gas boiler ban for rented properties | LandlordZONE.

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HMRC Stamp Duty receipts rise 27% over the last quarter!

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HMRC’s Q3 2020 SDLT receipts shows Stamp Duty income rose 27% over the last quarter, increasing to £1.9bn in Q3 2020, up from £1.5bn in Q2 20201

The Number of property transactions liable for Stamp Duty jumps 68% over the last quarter

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Success for landlord against bully-boy council

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A client Of Landlord Licensing & Defence who has lived in abject terror for months due to bullying and ridiculous Local Council action had a successful outcome at Court! Terrified by Council Enforcement; a client who had been summoned to court by an overly aggressive North West council for housing offences got a fantastic result.

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Luton licensing problems rumble on: ‘How did the borough council get into this mess?’

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A row over Luton Council’s failure to launch its selective licensing plans rumbles on, with opposition councillors labelling it “a mess”.

The authority was thwarted in its attempt to introduce a scheme after landlords and letting agents launched a legal challenge in July against decisions made by its executive committee.

It has also admitted that mistakes made in its implementation and decision-making have held up plans that were first introduced back in April 2018.

“Some landlords are complaining that, as it includes more than 20% of the private rented homes in the town, the council needs Government consent to introduce it,” Barnfield councillor David Franks (pictured) tells Luton Today.

“If local landlords know the way it’s being organised doesn’t comply with the regulations, why did it come as a surprise to the local authority?” he asks. “How did the borough council get into this mess?”

In the summer, a leading member of the private rental market community spoke to LandlordZONE about a range of failings including the council’s poor communication and consultation, how it exaggerated problems and its reluctance to fully explain the reasons behind the scheme.

He also revealed the council didn’t have the authority to make a designation and bring in the scheme at all.

A council spokesman says the authority is committed to getting its licensing plans approved.

He says: “Work continues to provide a strong updated evidence base for any project we bring forward to ensure we’ve a strong and vibrant rented sector, which offers security, stability and decent homes.

“The decision not to go ahead in August was because of a technical error which the council has acknowledged already. To have progressed when we were aware of this would have been even worse,” he adds.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Luton licensing problems rumble on: ‘How did the borough council get into this mess?’ | LandlordZONE.

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Fenland Landlord fined for serious HMO safety breaches

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Following the landlord’s appeal to the Eastern Residential Property First-tier Tribunal, the original penality imposed by Fenland District Council was upheld.

Using new powers granted under 2017 legislation, allowing Councils to issue penalties up to a maximum of £30,000 for certain housing offences, as an alternative to prosecution, the council successfully defended its position at the tribunal.

The landlord, not named by the council, was fined for various housing offences which included: having a non-working fire alarm system; defective fire doors to his flats; building defects including damp; severely worn carpets on the stairs; insufficient heating, inadequate security and defective, warped and rotting windows.

The council served five civil penalty notices in total on the landlord earlier this year for failing to rectify the numerous safety hazards found at his block of flats.

The landlord had appealed one of the penalty notices relating to defective windows, which was heard in September by the Eastern Residential Property First-tier Tribunal.

The tribunal dismissed the appeal. Upholding the council’s action, the tribunal said the evidence was clear and the penalty imposed by the council was confirmed.

The defects in the property first came to light in early 2018 when Fenland District Council’s private sector housing team inspected the block of three flats in Wisbech. At the time a number of serious defects were found and the landlord was issued with improvement notices requiring remedial works to be carried out. However, the work was not completed within the specified time scale or not to the standard required.

Subsequently Fenland District Council issued five civil penalty notices for failing to comply with the improvement notices and breaching houses in multiple occupation (HMO) regulations. This included failing to licence a licensable HMO. The penalties imposed totalled £8,852.

Fenland District Council reports that it has served 29 civil penalties on landlords, ranging from fines of £500 to £30,000 and more recently tenants have also been fined for illegally sub-letting to others. The income received from these fines goes to improving the management and condition of housing in the Fenland district.

Cllr Samantha Hoy, Fenland District Council’s portfolio holder for housing, is reported as saying:

“Fenland District Council is committed to protecting residents from substandard and dangerous living conditions, supporting good and improving landlords and taking a robust stance against criminal landlords.

“We will not hesitate to use legal powers to improve standards in the private rented sector and landlords who place the health and safety of tenants at risk can expect enforcement action to be taken against them.

“It’s also a warning to tenants that if they sublet, we can and will serve penalties on them as they are in effect the landlord.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Fenland Landlord fined for serious HMO safety breaches | LandlordZONE.

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Westminster Council launches HMO licensing consultation

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The proposed Additional Licensing Scheme for HMOs will focus on the 9000+ properties in the City of Westminster where private renters live in multi-occupant homes including flat shares, bedsits, and buildings converted into flats.

The scheme billed as part of the council’s wider ‘private rented sector strategy’

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Leading letting agency claims build-to-rent has only 1% rent arrears during Covid

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Build-to-rent (BTR) specialist lettings agency Ascend has collected an impressive 99% of its rent during the coronavirus crisis on behalf of its landlords.

The Manchester-based company beat the industry average of 95% between January and September by offering its 8,000 tenants flexible repayment plans.

Its claim echoes recent comments by build-to-rent pioneer Gatehouse Bank, whose Chief Commercial Officer Paul Stockwell recently said that its BTR arrears peaked at 8% in April but had reduced to 2% in July.

“Careful management and helping tenants through payment plans has brought arrears in line with long run averages, with only a fraction written-off as bad debt,” he said.

Ascend says it worked closely with them to ease their concerns and offer flexible terms if needed. These, the company says, have been mainly small, short-term deferred rental payments with payment plans to bring rent back up to date quickly while the team also directed some tenants towards funding sources such as self-employed grants.

Up to 15% of its residents had problems paying rent at the peak of the crisis, so the company agreed payment plans with those worst affected and then helped them get their payments back up to date.

MD Ged McPartlin (pictured) says he knows how tough this year has been for many people, without adding housing worries into the mix.

“We understand just how vital it is to provide high quality rental homes in the areas where they’re most needed – and to protect those renters who might require extra support from time to time,” says McPartlin.

“By putting our residents’ individual circumstances first and being flexible in our approach, we’ve worked hard to collect almost all invoiced rent.

“This is testament to our track record as a leading build to rent specialist, our knowledge of the sector and what people need from an agent, especially at difficult times.”

Ascend rents two to four-bedroom apartments and houses in developments ranging from 50–100 properties and has offices in Manchester, Leeds, Liverpool, Wolverhampton and London.

Read more: How to deal with rent arrears during Covid.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Leading letting agency claims build-to-rent has only 1% rent arrears during Covid | LandlordZONE.

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Sadiq Khan launches Property Licence Checker for tenants

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The Mayor of London, Sadiq Khan has launched a new online tool to search if a landlord has licensed a rental property and announcing tenants could be owed thousands of pounds in rent repayments if their landlord has failed to obtain the correct licence.

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