Landlords who agreed tenancies via Purplebricks could be liable for large tenant payouts

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Hi, my name is Melissa Lawford, and I am the property correspondent at The Telegraph.

I’m writing about how landlords who arranged tenancies via Purplebricks could now have to make large payouts to their tenants because they were not served necessary legal (prescribed) documents about their deposits.

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EXCLUSIVE: ‘We listened to landlords’ claims Durham selective licensing chief

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Durham has been given the green light for a huge new selective licensing scheme – although it is 40% smaller than its original plan.

The scheme will cover about 29,000 homes, 42% of the county’s private rented sector, and will go live on 1st April when landlords will need a licence to rent their properties.

Durham County Council had originally approved a scheme that covered 65% of the county and included 51,000 private rented properties but Lynn Hall, strategic manager for housing, tells LandlordZONE: “We consulted with landlords, tenants and residents on our plans for a selective licensing scheme last year.

“Having taken their feedback on board, we submitted a smaller application which was approved by cabinet in September 2020.”

This has now been signed off by the Department for Levelling Up, Housing and Communities, and the application process opens for landlords in early February. The licence fee is £500 for a five-year period, although if landlords meet certain criteria this will be cut to £350.

Good conditions

Part of the County Durham Housing Strategy 2019 to 2024, which aims to maintain and improve standards across the county’s housing stock and wider housing environment, the scheme aims to create long-term, sustainable neighbourhoods by ensuring that any privately rented properties are well managed and in good condition.

Durham County Council has already run three selective licensing schemes in Dean Bank, Ferryhill, Chilton West and Wembley in Easington Colliery, that all ended in 2019.

It has reported that these made a positive impact, with a drop in reported crime and anti-social behaviour and positive improvements in both the condition and management of private rented properties.

Councillor James Rowlandson (pictured), cabinet member for resources, investments and assets, says: “By raising the management and maintenance standards of private rented properties, we can help to improve the health and wellbeing of tenants and reduce anti-social behaviour in our communities.

It will also allow us to better support landlords and ensure they have the right tools to deliver a high standard of service in the sector.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: ‘We listened to landlords’ claims Durham selective licensing chief | LandlordZONE.

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Hazard Awareness Notice?

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Due to excess heat in some flats in a block (where I have a couple of units) some tenants contacted the local council who appeared and are now proposing to issue a Hazard Awareness notice (cat 1) on the Freeholders.

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It’s time to target international students

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Despite Covid the UK remains one of the most popular destinations in the world for international students and is second only to the US as a preferred choice for those seeking top-notch universities.

These students, often arriving in an unfamiliar land and still relatively young, are keen to secure decent accommodation and often armed with generous budgets with half of them beginning their search up to a year in advance.

And apart from the right price, they also seek accommodation that’s close their campus and want, particularly in their first year, bills inclusive of rent.

The opportunity

There are almost 500,000 international students studying at UK universities, hailing from countries such as China, India, USA and Nigeria, as well as our close neighbours in Europe.

A recent study by the Higher Education Policy Institute estimated that these students were worth over £20 billion to the UK economy.

Halls v houses

Often overlooked by landlords who think international students only want to live in halls, our research shows that the majority would prefer to live in shared housing.

As the number of international students visiting www.accommodationforstudents.com (AFS) to find a term-time home has risen sharply, our team has been working with landlords to encourage them to target students from overseas. There are a couple of reasons for this.

Short term challenges and long term wins

There are some shorter-term challenges right now. Covid 19 has made it more difficult for international students to get into the UK, while remote learning has encourage some to stay in their home country.

As a result, the number of international students accepting a place to study in 2021 has fallen compared to the previous year. Early evidence is that despite this drop in numbers there would actually be more students traveling to live in the UK this year, with student visa applications up over 100% this year.

But the longer term aim of the UK is to increase the number of international students studying in the UK to 600,000 over the next decade. With many anticipating a relative return to stability by 2023, this is a growing market.

Adapting for the future

One key challenge for student landlords is that demand for their accommodation can be determined by the recruitment performance of the major universities in the towns and cities within which they operate.

Therefore, while 2021 has been a record year for AFS, the national picture does not account for significant regional variations.

In some cities with strong-performing universities there is not enough accommodation to meet demand while in others, where the institution is performing poorly, a decline in student intake can hit demand.

International solution

As a solution many universities struggling to meet their undergraduate recruitment targets will turn to the postgraduate market to address this shortfall.

While international students account for only 20% of undergraduates they represent 40% of all postgraduate students. Therefore, student cities with rising post-grad populations are likely to see an influx of international students.

Boosting online presence and reliable rental income

Given that the main selection criteria still apply, attracting these students is a matter of adapting marketing correctly.

In particular, the student house hunting process is almost all online now, so the latest video or virtual tour is essential to promote properties that can’t be viewed in person.

At the same time working with a reliable guarantor company like Housing Hand will take the risk out of accepting tenants from overseas.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – It’s time to target international students | LandlordZONE.

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76% of councils report an increase in landlords selling up and warn of increased waiting lists

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Councils warned today of a growing crisis in the private rented housing sector, with a sharp rise in landlords selling up or converting their properties into Airbnb’s. The District Councils’ Network that represents over 200 councils conducted a snap survey showing 76% of councils have seen an increase in landlords selling up properties.

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Government updated plan B – Moving home during coronavirus

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This guidance provides advice to those working within the home buying and selling process and those moving home. Read it alongside the guidance on what you should do to keep safe.

Following the emergence of the Omicron variant of COVID-19

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LATEST: Landlord loses two-year battle over £18,400 HMO licensing fine

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A landlord firm has lost its case against Thurrock Council after the Court of Appeal ruled that it could not use the excuse of believing it wouldn’t be granted an HMO licence.

Hersch Sternlicht, a director of North London firm Palmview Estates Ltd, and his company were fined £18,400 in November 2020 for failing to provide adequate living conditions for tenants at an HMO in London Road, Grays, following a long-running battle with the local authority.

Sternlicht was also issued a Civil Penalty Notice for breaches found under the HMO management regulations including inadequate fire safety measures, a water leak and a defective boiler.

Palmview then built a kitchen extension to comply with the notices, applied for an HMO licence in July 2019 and appealed the Final Notice in September.

Reasonable excuse

It did not dispute that it had been managing or was in control of the property without an HMO licence but said it had a reasonable excuse for not having one because it had been told by a council employee that there was no point in applying for it while there was an ongoing planning dispute over the kitchen.

A First Tier Tribunal ruled in favour of the landlord, saying: “We consider that a landlord who did not apply for a licence because he was told or led to believe by the council that such an application was a waste of time would have a reasonable excuse for his failure to license.”

However, the council appealed and an Upper Tier Tribunal ruled in its favour, saying: “I am not persuaded that where a landlord fails to apply for a licence because it thinks it will be refused and for an incorrect reason, that amounts to a good reason not to apply.”

An Appeal Court judge has now dismissed Palmview’s case, saying: “A person might have a perfectly reasonable excuse for not applying for a licence which does not (everything else being equal) give that person a reasonable excuse to manage or control those premises as an HMO without that licence.”

Giles Peaker, a partner at Anthony Gold solicitors, tells LandlordZONE that the First Tier Tribunal seems to have got itself confused. He adds: “There may well be reasonable excuses for failing to apply for a licence, but not applying because you are sure the licence won’t be granted can’t be one of them. Not if you continue to run the HMO.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Landlord loses two-year battle over £18,400 HMO licensing fine | LandlordZONE.

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BREAKING: 1000s of landlords caught up in Purplebricks deposits fiasco

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Estate agency Purplebricks has revealed that thousands of landlords have been caught up in its IT glitch that saw the tech fail to communicate the proscribed information in relation to tenancy deposit protection in time to tenants.

Between 800 and 3,700 landlords are estimated to be involved after Purplebricks this morning revealed that its exposure to the problem could cost the company between £2 million and £9 million.

These are the potential costs of reimbursing tenants three times their tenancy deposits for not serving them the proscribed information in time.

The law requires that landlords or their letting agents must tell tenants ten key pieces of information about both them and the deposit within 30 days of receiving the deposit.

Purplebricks and its landlords are exposed because, should the tenants wish to, they can apply to a county court and be paid three times their original deposit as a ‘fine’.

Landlords also face restrictions on how and when they can evict a tenant if the tenancy deposit protection rules have not been followed.

Statement

Purplebricks has released a statement this morning revealing that it is talking to tenants – it has two weeks to sort the problem out – to ‘correct’ the original communications process.

“The company believes that it is prudent to provide for any potential future claims which could arise under the Housing Act in relation to this regulatory process issue,” the statement says.

“Early provisional estimates by the Company suggest a potential financial risk in the range of £2m-9m.

“Purplebricks is now in the process of finalising the level of provision required and associated disclosures and has therefore taken the decision to delay its results for the half year ended 31 October 2021 which were due to be published on 14 December 2021.”

Read more about tenancy deposit protectin schemes.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: 1000s of landlords caught up in Purplebricks deposits fiasco | LandlordZONE.

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VIDEO: Paul Shamplina and Vanessa Warwick tackle the ‘wealth creation’ property sector

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Property commentator Vanessa Warwick has said she will continue to be an advocate for ‘authentic property and wealth educators’ who provide quality training at a reasonable cost and has welcomed the PEAS initiative launched recently by the Property Investment Bureau.

She sat down with Paul Shamplina for a video interview filmed at a property sector gathering a few days ago to discuss this topic.

“As we know, the wealth creation industry is totally unregulated and that makes it a very, very dangerous place for consumers, particularly as those who are attracted to it tend to be younger, more naïve and slightly vulnerable people,” says Warwick.

When asked how she would like to see the wealth creation sector policed, Warwick proposed a three-point plan.

This includes social media platforms taking more responsibility for removing content that misleads consumers, the sector being regulated along the lines of the financial service industry’s FCA scheme, and potential students being vetted before signing up for expensive courses to ensure that they qualify for BTL finance.

In the video Warwick describes many of the educational courses on offer as akin to “buying a ticket to see a Unicorn”, highlighting how training courses can cost the same as the deposit on a property, and says too few students realise that property investment requires capital.

Shamplina agreed, saying: “Getting into property needs some money to get started, otherwise it’s just a pipedream.”

Redress

The evictions expert also said that he’d urged the recently launched PEAS scheme to include redress within its membership requirements so that customers of PEAS accredited educators, if they want all of some of their money back, had an independent third-party adjudicator to gain redress via.

“You have to start regulation somewhere and if we don’t then eventually Trading Standards are going to get involved, or the government will legislate,” he said.

As mentioned in the interview, the New Statesman recently ran an article examining ‘landlord influencers’ on social media, highlighting how many market their courses to young people with promises of easy riches through property, with many using their luxury lifestyles as part of their marketing.

Watch the video

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – VIDEO: Paul Shamplina and Vanessa Warwick tackle the ‘wealth creation’ property sector | LandlordZONE.

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Landlords frustrated over council’s handling of selective licensing delay

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Southend landlords are frustrated by their council’s licensing registration system which doesn’t make clear that the scheme has been put on hold or how much it will cost.

It was scheduled to start on 1^st December but councillors at the Essex town council complained they lacked details about how it would work.

But landlords hoping to get an early bird discount aren’t being told that there has been a delay, including Josie Hawes, from Billericay, who runs a family business with 10 rental properties, one of which is within the new licensing area.

She tells LandlordZONE that she spent two days filling out forms without realising the scheme was on hold.

Josie adds: “I only found out about the delay by looking at news articles when I was confused about only being charged £3.

“I then emailed the council who said that only the payment had been put on hold until it goes back to cabinet to confirm cost. I used their specific selective licensing email address and that doesn’t even work.”

Licence applications

Southend Council’s website says it is currently unable to accept payment for licence applications but that it will accept applications online and will pre-approve those submitted.

It adds: “When the payments are able to be processed we will contact you…you will still receive your discount if a valid application is received by 1st April 2022.”

Ian Gilbert (pictured), leader of the council, says: “Those landlords who have applied since 1^st December have been charged a nominal fee to recognise their application, but until approval from the council we cannot provide an accurate cost. We will update landlords as soon as we are able.”

Read more about Southend’s licensing activities.

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