Warning issued as plans to abolish S21 evictions and fixed-term tenancies proceed

admin    Uncategorized     agents

A group representing the entire PRS has given a strong warning to the Government that its ‘Fairer Renting’ white paper proposals need a significant rethink.

The Lettings Industry Council (TLIC) includes representatives from the NRLA, 30+ leading national letting agents, surveyors, property managers, redress and deposit protection schemes and consumer groups including Generation Rent and Which?.

Its new report is designed to set alarm bells ringing in Whitehall, highlighting how official plans to both abolish Section 21 evictions and replace fixed-term tenancies with periodic ones will “negatively impact shared households, lead to significant job losses in the sector and prejudice applicants who require a guarantor”.

TLIC instead says that if Section 21 evictions are to go, fixed-term tenancies must remain, pointing out that the Welsh Government U-turned on its periodic tenancy plans recently.

The report also warns that unless its proposal is adopted, even more landlords will quit the sector making the current problems with rental stock even worse.

And as LandlordZONE reported exclusively last month, student landlords in particular are horrified by the proposal to switch all tenancies to periodic given the way student rentals work.

Paul Shamplina, founder of Landlord Action and Chief Commercial Officer at Hamilton Fraser, who has been working closely with TLIC to find workable solutions to the abolition of Section 21, adds: “Landlords need to have quick and simple routes for gaining possession of their property, and the courts need to improve to facilitate this.

“In addition, without bailiff reform, enforcement will be even more challenging. We believe the suggestions in this report help strike a better balance between the need to give tenants more security and offering landlords greater confidence in the system.”

Theresa Wallace, (main pic) Chair of TLIC, says: “It is vital to maintain the supply of desperately needed properties to rent, to prevent a further rise in homelessness and living costs which will inevitably affect the most vulnerable tenants on the lowest incomes.

“Although it is growing, the Build to Rent (B2R) sector predominantly provides one and two bed apartments but it is family homes that the PRS has a severe shortage of. B2R is not currently the solution to filling this gap.

Exiting landlords

“We are calling for any changes to the PRS to be very carefully considered and thorough impact assessments conducted, so as to ensure that the proposed changes do not cause more landlords to exit the sector at a point where property is so desperately needed by tenants.”

But her report also urges Ministers to consider improving the way the PRS works including the courts, council tax payments, the proposed Decent Homes Standard, enforcement of rogue landlords, how the landlord ombudsman and property portal will work, how selective and additional licence schemes can be improved.

TLIC is also calling for landlords and agents to given more time to adjust to the Renters Reform Bill, which is expected next year.

You can read the full report HERE

View Full Article: Warning issued as plans to abolish S21 evictions and fixed-term tenancies proceed

Can tenants take in Ukrainian refugees?

admin    Uncategorized     agents

Hi, I am a letting agent and an unrelated landlord has asked for some advice, his tenants (a couple) have moved in Ukrainian refugees into the rented property without his permission or discussion etc. and they are receiving £350 for this.

View Full Article: Can tenants take in Ukrainian refugees?

Labour ‘demonises landlords’ and will empower tenants

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Labour has unveiled plans to deliver a new renters’ charter and a decent homes standard for the country’s private rental sector.

But the criticism at the party’s conference in Liverpool of private landlords has been slammed by one organisation as ‘demonising all landlords’.

View Full Article: Labour ‘demonises landlords’ and will empower tenants

Landlords worry they can’t afford green property upgrades amid rising costs

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Rising costs are piling the pressure on private landlords who say they can’t afford to implement the measures needed to improve their rental property’s EPC rating, a bank says.

The Secure Trust Bank has found that investors and landlords fear that they will not hit the government’s proposed energy efficiency targets for their rental homes.

View Full Article: Landlords worry they can’t afford green property upgrades amid rising costs

Comment: what’s really behind the surge in no-fault evictions?

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A report in The Guardian newspaper says that the “Surge in ‘no-fault evictions’ prompts calls to renew UK-wide ban,” on section 21 evictions that is, as was the case during the Covid pandemic.

Tenants were protected from being removed during lockdown – however much they may have been in arrears – but tenants are now suffering “devastating consequences,” the paper says.

What the article fails to recognise is that the very threat of the removal of section 21 no-fault evictions, along with other prosed quite radical measures, has put the fear of God into many landlords, and consequently they are using the very mechanism which is under threat to remove tenants, so they can sell up.

Long-running campaign to remove section 21

Housing activists and homelessness charities have long complained about no-fault eviction notices being used to remove tenants who complain to their landlords about the property conditions and the need for repairs, the so called “revenge evictions”.

But landlords and eviction specialists such as Landlord Action have provided much evidence to show that these revenge evictions are a tiny minority of the whole and that most evictions are simply due to rent arrears and bad tenant behaviour – after all the vast majority of landlords want to keep good tenants as long as possible.

But this does not stop the outcry, even from people august as former head of the civil service, Sir Bob Kerslake, warning of a “catastrophic” homelessness crisis unless the government re-introduces the eviction ban on evictions that protected tenants during the Covid-19 pandemic.

An end to Section 21

The Conservative government promised to end the practice of no-fault evictions over two years ago and this is due to become law at sometime in the near future under the auspices of the Renters’ Reform Bill. This Bill and its radical overhaul of the Private Rented Sector in England is set out in the white paper, A fairer private rented sector but it has yet to pass into legislation, not likely before well into next year.

The proposed new reforming legislation, largely formulated under Michael Gove – at The Department for Levelling Up, Housing and Communities – who has now left the government, includes some sweeping reforms such as no fixed-term tenancies, restrictions on rent increases and longer notice periods, increasing tenants powers to challenge evictions, no bans on pets, DSS and families etc.

The pendulum appears to be swinging, shifting the balance of power away from landlords and too much into the hands of their tenants. What is frightening many landlords, giving them nightmares that they could be stuck with bad tenants, is that they may be unable to remove them indefinitely.

Strengthening eviction grounds

Yes, along with these new proposals go promises to strengthen the grounds on which landlords can seek redress when things go wrong. Given good responsible tenants the new rules would probably make very little difference, and after all most landlords would like to see their tenants staying indefinitely and most tenants leave amicably when the decide to do so. But when things go wrong its a different matter: arguing the landlords’ case in an English court of law’s adversarial system, to remove a really bad tenant, without the certainty of s21, can become protracted and very expensive.

That’s if the landlord can get the case to court in the first place. Given the current backlog of cases and the slow pace that these things progress, landlords have little faith that the promised improvements in dealing with bad tenants will ensue. What’s more, if all these cases must in future must go to a court hearing, rather than just a paper exercise, even more delays will be created – it could be chaos!

Landlord flight

The resulting landlord flight from buy-to-let is without doubt causing chaos as The Guardian article says, though it fails to mention that the threat of removing s21 is in any way a responsible, simply blaming instead the backlog of cases created by the Covid ban:

“The more than doubling in homelessness from no-fault evictions is largely down to the fact that landlords were prevented from using the eviction system for much of the pandemic as the government successfully moved to prevent a surge in homelessness, including its “everyone in” strategy on rough sleeping. But the latest figures show no-fault evictions are now causing more homelessness than in 2018/19 and 2019/20.”

Matt Downie, chief executive of homelessness charity Crisis told The Guardian:

“The prime minister must commit to introducing the renters reform bill, to help give renters proper protection from being hit with a no-fault eviction and set out a clear plan to provide genuinely affordable homes. Only through such decisive action can thousands more people be protected from homelessness in the coming months.”

A crisis situation in housing

When letting agents are resorting to sealed bid for tenancies, and bidding wars that are driving would-be tenants crazy are in evidence across the country, it underscores the plight that people are going through, desperate for good quality rental accommodation at a reasonable price.

The big sell-off is not only creating this massive problem at the middle and top end of the rental market, its exacerbating the eviction problem at the bottom end, resulting in a homelessness crisis.

The shortage of housing is seeing tenants queuing in the streets for a viewing at one end of the spectrum, and rents are being pushed up, by as much as 19 per cent over last year, while at the same time tenants are being thrown out onto the streets. It just does not make sense to me!

Some agents are even asking for tenant CVs to evaluate their applicants backgrounds as if applying for a job, before agreeing a new let. According to one London letting agency, Atlas Property, managing over 500 properties, the number of tenants submitting CVs to help them secure a let has jumped by 20 per cent over the last 12 months.

Where will it all end?

A spokesperson for the Department for Levelling Up, Housing and Communities told The Guardian:

“A fair deal for renters remains a priority for the government. We are giving councils £316m to tackle homelessness and make sure families are not left without a roof over their heads.”

A valid question is: will the new regime under Liz Trust and her team press ahead with Michael Gove’s radical reforms in their present form, or will they re-assess the whole matter of the private rented sector in England with a balanced view?

Is it not a good time to lobby government to come up with a more even handed approach to the reform of the sector, one that would give landlords an incentive not just to stay in the sector, but to invest more money into it. The sector has been ignored in the “mini-budget” but is it not crying out for tax reform as well?

View Full Article: Comment: what’s really behind the surge in no-fault evictions?

Landlords and agents box clever to raise £21,000 for disability charity

admin    Uncategorized     agents

Leading landlords, letting agents and other members of the private rented sector have gathered to help raise £21,000 for charity during TV star and eviction expert Paul Shamplina’s latest Rumble with the Agents event in London.

Held at the Holiday Inn hotel near Golders Green in North London on Thursday, some 200 people gathered to watch five bouts of boxing and bid during an auction for pugilistic and footballing memorabilia.

The fights included the first two women to fight at the event, but the most vocal support group of the night was provided by colleagues and friends of estate agent Neil Baldock who won his bout, revealing after the event that he trained three to four times a week in the gym in preparation for his six minutes in the ring.

“A big thanks to Paul and Rita Shamplina for the event, my brother Matt Baldock, Claudia Dellapina for her banners and all my team especially all of those who came along on the night to support me,” he added.

Expansion planned

Sponsored by industry insurance firm Hamilton Fraser, Rumble with the Agents is due to expand in 2023, which next year will be its eighth iteration.

The next London event will take place in June 2023 with a Manchester Rumble planned in December.

“We had some good fun and some good fights and the money raised will help finance some extra activities at DRUM’s centre in Watford, where the charity provides day activities and support to adults with physical and/or sensory disabilities,” says Shamplina.

Anyone interested in training to box at either of next year’s events should contact Shamplina via info@rumblewiththeagents.co.uk

View Full Article: Landlords and agents box clever to raise £21,000 for disability charity

Council took action against me after tenant started fire?

admin    Uncategorized     agents

We had a tenant who accidentally set fire to our 4 studio flats causing extensive damage. The council subsequently wanted to interview me under caution for suspected HMO breaches.

Out of our depth, we approached Possession Friend and following a Fixed Penalty

View Full Article: Council took action against me after tenant started fire?

Can an AST be signed retrospectively?

admin    Uncategorized     agents

Hi, Just going through some tenancies and have come across a tenant who does not have a signed AST on file (or anywhere else).

If we were to sign an AST, dated with the original tenancy start date (01.09.2020) but our signatures dated with today’s date

View Full Article: Can an AST be signed retrospectively?

Rightmove says house prices jumped by £2,587 in September

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The average price of property coming to the market grew by 0.7%, or £2,587, in September to £367,760, the Rightmove House Price Index reveals.

The figures show that middle and high-end market sectors are driving price rises, with a new record average asking price of £340,513 in the ‘second-stepper’ category – that is three bedrooms and non-detached with four bedrooms.

View Full Article: Rightmove says house prices jumped by £2,587 in September

What impact will record inflation have on business rates?

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Business rates revaluations are scheduled at certain times, but if these occur during period of high inflation the new fix could put businesses and commercial landlords at risk.

Though business tenants are liable to pay business rates, landlords should be concerned because they become liable themselves should the building become vacant.

Business rates and inflation

If inflation remains at the present level (around 10 per cent) the upcoming rates revaluation due in April next year could result in the rating list being fixed at a level that’s far too high for comfort for many businesses, it could drive many businesses to the wall.

It has been estimated that should inflation remain at its present elevated level, business rates for commercial properties in England as a result of next April’s revaluation will rise in total by over £2 billion, a nice result for central and local government but not so good if it drives companies out of business.

Business rates revaluations

Business rates are re-set at each revaluation for a period of time known as the rating list. The current rating list, running from the April 1, 2017, until the March 31, 2023, was extended due to the pandemic in an attempt to ease the burden on businesses.

Business rates in England are a tax on the occupation of non-domestic property introduced in England and Wales in 1990. Since devolution and a Welsh Assembly in 1997, rate setting in Wales has been separated from England, and Scotland uses a different system as well.

Properties are assessed as a rating list with a rateable value, a valuation of their annual rental value on a fixed valuation date using assumptions fixed by statute. Rating lists are created and maintained by the Valuation Office Agency, a UK government executive agency of His Majesty’s Revenue and Customs (HMRC).

The agency values properties for Council Tax and for non-domestic rates in England and Wales (in Scotland this function is performed by the Scottish Assessors). The work is undertaken on behalf of the Department for Levelling Up, Housing and Communities in England, and the Welsh Government in Wales.

The business rating list is in fact a series of local rating lists, with each property being assessed for a rateable value based on rental values. Rating lists were prepared and maintained by the Valuation Office Agency, while billing and collection is the responsibility of local authorities.

The system features a central government set multiplier, often referred to as the Uniform Business Rate, by which the basic bill is calculated. The rates bill for individual properties and business, particularly of late due to Covid, is modified by various reliefs, including the newly introduced transitional relief, which was designed to smooth large changes in liability due to revaluations. The multiplier was calculated to ensure that, on average, bills rose by no more than the rate of inflation.

Rating lists can be altered either to reflect changes in properties, or when valuations are successfully appealed and new rating lists are normally created on revaluations every five years, though for future rating lists the government has shortened this period to three years. The aim of this is to keep the rates businesses pay more in-line with market rental values, as they change with the strength of the economy.

Through the Local Government Finance Act 2012, and regulations that followed, the government gave local authorities the power to keep up to half of business rate income and transfer half of it centrally, to central government. The central share is then distributed to councils in the form of revenue support grants.

The other half kept by local authorities are then subjected to tariff, levy, top-up and safety payments depending on the financial position of the council. According to the government the change gives financial incentives to councils to grow their local economies and increase their income from business rates. At the same time the new scheme has resulted in more risk and uncertainty.

Revaluation next April – business concerns

With the next business rates revaluation due next April, Mortgage Introducer quotes RVA Surveyors saying that business owners and leaders are increasingly nervous as to what another rise could mean for their businesses.

RVA Surveyors say there’s wide business community that is either unaware, sceptical, or simply too busy with the current economic climate, to think of challenging their business rates.

Anthony Hughes, managing director at RVA Surveyors, told Mortgage Introducer:

“Business rates has seen an upwards-only trend for years, and it is past time for the government to step up and sort out an increasingly outdated tax system. We need to see from Truss’s government that help for businesses is paramount in the coming days; not only to help businesses stay afloat, but to keep employment levels steady as well.

“As bills continue to soar, and speculation as to when businesses will receive help from the government runs rampant, business owners and leaders must take steps to create savings where they can,” Mr Hughes says.

View Full Article: What impact will record inflation have on business rates?