OFFICIAL data: Section 21 evictions slump scotches ‘crisis’ claims

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Fewer landlords are using Section 21 notices to evict tenants, assessment of official data by the National Residential Landlords Association has revealed.

These are the ‘no fault’ eviction notices that landlords use to evict tenants often when they wish to sell a property or move back in themselves, and the tenant will not leave voluntarily.

This kind of eviction is under the spotlight – many housing groups including Shelter and Generation Rent want to see them banned, and the government has said they will be replaced when its rental reform bill goes through parliament next year.

But the government’s own data shows that the use of Section 21 notices plummeted by 55% over the past two years and, although this is in part due to the Covid evictions ban, it’s also part of a trend.

Section 21 cases dropped by 50% between 2015 and 2019 which can be explained, to a significant extent, by more and more landlords using Section 8 evictions which, although more expensive, can be faster than a Section 21 when notice periods are included.

Peddled

“These figures dispel the myth, peddled by some, that landlords spend much of their time looking for ways to evict tenants for no reason,” says Ben Beadle (pictured), Chief Executive of the NRLA.

“Whilst we condemn any landlord who abuses the system, it is vital to remember that most tenants and landlords enjoy a good relationship.

“It is in that spirit that the Government should develop its plans for a system to replace Section 21 in its forthcoming White Paper on rental reform.”

The NRLA is calling for clear and comprehensive grounds upon which landlords can legitimately repossess properties including anti-social behaviour, and for the process in these cases to be speeded up.

At present, it can take an average of almost 59 weeks from a private landlord making a claim to repossess a property to it actually happening.

Read more about Section 21.

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OFFICIAL data: Sharp decline in Section 21 evictions debunks ‘crisis’ claims

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Fewer landlords are using Section 21 notices to evict tenants, assessment of official data by the National Residential Landlords Association has revealed.

These are the ‘no fault’ eviction notices that landlords use to evict tenants often when they wish to sell a property or move back in themselves, and the tenant will not leave voluntarily.

This kind of eviction is under the spotlight – many housing groups including Shelter and Generation Rent want to see them banned, and the government has said they will be replaced when its rental reform bill goes through parliament next year.

But the government’s own data shows that the use of Section 21 notices plummeted by 55% over the past two years and, although this is in part due to the Covid evictions ban, it’s also part of a trend.

Section 21 cases dropped by 50% between 2015 and 2019 which can be explained, to a significant extent, by more and more landlords using Section 8 evictions which, although more expensive, can be faster than a Section 21 when notice periods are included.

Peddled

“These figures dispel the myth, peddled by some, that landlords spend much of their time looking for ways to evict tenants for no reason,” says Ben Beadle (pictured), Chief Executive of the NRLA.

“Whilst we condemn any landlord who abuses the system, it is vital to remember that most tenants and landlords enjoy a good relationship.

“It is in that spirit that the Government should develop its plans for a system to replace Section 21 in its forthcoming White Paper on rental reform.”

The NRLA is calling for clear and comprehensive grounds upon which landlords can legitimately repossess properties including anti-social behaviour, and for the process in these cases to be speeded up.

At present, it can take an average of almost 59 weeks from a private landlord making a claim to repossess a property to it actually happening.

Annual decline

“The use of Section 21 accelerated applications has been declining every year for the past five years,” says evictions expert Paul Shamplina (pictured).

“As well as the pandemic, the measures within the Deregulation Act 2015 to prevent retaliatory evictions has played a part in lowering the use of Section 21 notices, as has the increasing use of selective licensing by local authorities.”

Read more about Section 21.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – OFFICIAL data: Sharp decline in Section 21 evictions debunks ‘crisis’ claims | LandlordZONE.

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ROGUE landlord convicted of illegally evicting pregnant tenant

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A rogue landlord whose proeprty is also the subject of a prohibition order has been fined for illegally evicting a pregnant tenant and her partner from their home and throwing their belongings into the street.

Businesswoman Lidia Szopinska, from Camden, rented a room in a house she owned in Townsend Street, Cheltenham, to the couple for nine months in May 2019. After they gave notice to leave the property early, relations soured and Szopinska made allegations of breach of tenancy.

The couple had agreed to leave the property on 19th August 2019 but on 14th July, when they returned home after visiting relatives, they found the landlord standing outside with all their possessions on the street.

Magistrates ruled that she was guilty of illegally evicting the pair. Szopinska was fined £180 with £2,010 costs and ordered to pay £1,560 compensation to the couple for the distress caused, the non-return of their deposit, rent repayment and for the loss of a bag containing a laptop and other items that were stolen from outside the property.  

Prohibition order

Earlier this year, Szopinska had her appeal against a prohibition order made in December 2020 relating to the same property thrown out.

The council had prevented her from renting the basement after it identified a Category 1 fire hazard; there was no adequate and unobstructed means of escape, fire doors, automatic fire detection or alarm system.

She blamed Covid complications and the fact she had been given the wrong address as the reason for her appeal being made outside the 28-day time limit.

However, a First Tier Property Tribunal ruled that she knew that the limit applied and was not convinced that Covid would impact on her ability to deal with the appeal process.

Cheltenham Council enforcement manager, Mark Nelson, says: “No landlord can act outside the law and we will do everything in our power to ensure tenants can live in rented properties safe in the knowledge that we are there to protect them from illegal eviction.”

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Specific HMRC form for – Rent a room Method B?

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My daughter bought a house which she shares with two friends as her tenants. They pay below market value rents for the area, but this year the rental income will be above the £7,500 annual rent a room allowance.

She wants to opt for “Method B”

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LATEST: Councils hammer London landlords with fines totalling £1m in 2021

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Fines for London’s errant landlords and letting agents have totalled £1 million in less than a year as councils pick up the pace of enforcement efforts.

Geospatial technology firm Kamma reports that penalties have increased from £6,052,932 in December 2020 to £7,128,973 at the start of November, a jump of £600,000 in the last four months, and a £372,874 increase since October. This is the total levied since the company set up its database in 2017.

Earlier this year, Kamma – the only company to track the Mayor of London’s Rogue Landlord and Agent Checker – reported a 532% increase in fines between May and July as local authorities embarked on post-lockdown enforcement.

Since the start of 2021, it has seen an average increase of £89,670 in fines every month, with Camden council topping the enforcement league table as the most active in terms of number of fines, followed closely by Newham and Southwark.

Hammersmith and Fulham is now the London borough with the highest average fines of £19,800, followed by Hillingdon with an average of £13,500, and Hackney with £11,250.

With increases across the region, letting agents and landlords have to stay on top of their game, says Kamma CEO Orla Shields (pictured): “The lettings market is more regulated than ever before. Licensing schemes, fines and enforcement through Rent Repayment Orders are all increasing, so it’s vital agents act to protect themselves, their landlords and of course their tenants.”

Landlords and letting agents face fines of up to £30,000 for failing to comply with safety and licensing regulations, and additional fines of up to £5,000 per property for non-compliance with MEES regulations.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Councils hammer London landlords with fines totalling £1m in 2021 | LandlordZONE.

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The Property Investors Awards team are delighted to announce the winners for 2021

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With celebrations usually consisting of an illustrious evening of fine dining and entertainment to announce the winners, this year announcements were made virtually. It has never been more important to ensure we continue to celebrate the very best in the property investment sector.

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The potential of Open Finance and the digitisation of tax records

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The world is undergoing huge changes. With coronavirus pushing the economy to the limit, people are questioning the role of established institutions.

And if finance doesn’t work to enable the economy, businesses or individuals, then who is it for?

Before the digital revolution, financial experts were seen as a necessity. They knew how things worked, what everything meant and could provide good advice from the heart of the financial sector.

But now trading can be done by anyone online, with a wealth of information available to hand.

Traditional banking models are already being upended by technology. Through Open Banking, challenger banks are able to connect services digitally, cutting inefficiencies and costs while speeding up transactions.

Open Finance is seeking to build on this model to connect financial services via technology, potentially making the existing financial model obsolete.

Open Finance

Open Finance has the potential to transfer power back to individuals. Not only would this benefit society, but it would help minimise the boom-bust cycles that cripple entire economies.

No individual would be too big to fail, and bailing people out would cost far less, having minimal impact on the economy overall. With more information available to them, Open Finance businesses will be able to use technology to make better decisions instantly.

While it is still very early days for Open Finance, there seems to be an endless raft of possibilities to benefit individuals, businesses and national economies. Faster, more secure, and less risky access to credit can help grow the economy, transforming finance from something that benefits a few wealthy capitalists to something that enables growth in the real economy.

So how else could Open Finance benefit society?

Tax information

Most working people pay income tax, either via self-assessment or PAYE, and we all have tax records with a wealth of financial information that has been verified, at least in part, by HMRC.

This centralised repository of financial information could be put to better use, such as allowing credit reference agencies to better understand an individual’s risk profile or helping to prove income as part of a mortgage application.

Unfortunately, HMRC is a black hole of information ‒ its sheer size and power sucks information in, but nothing comes back out again.

However, with Making Tax Digital (MTD), HMRC are effectively allowing individuals to keep validated tax records on the software of their choice.

Software providers may then be able to use this information to enable certain aspects of Open Finance. The information doesn’t need to be protected by HMRC, it is the individual’s choice and responsibility over how to use their own information.

As MTD software develops, we will see it connected to Open Banking, allowing self-assessed taxpayers to connect their business account directly to the software, leaving the taxpayer to simply check the details, add any adjustments, and click submit.

MRC would then validate the records, providing assurance for any financial institutions using that financial information. (want to keep up to date with all things MTD – Join the APARI Community here)

More growth, lower risk

With access to complete and validated financial information, lenders would be able to more quickly and accurately assess individual risk when considering a loan application. This would speed up the process of applying for a loan for a property purchase.

Take residential landlords, for example. They may own a few properties already, with equity coming out of their ears.

If that landlord wants to obtain another property, they’d need to get their accountant to pull together their paperwork, complete an SA302, and send everything off to their mortgage advisors who would then validate the information before submitting the mortgage application.

The application can then take months to approve, slowing down the process and potentially leading to missed opportunities. Since property sales usually occur in a chain (the owner of the property you are purchasing is usually purchasing another property, and so on), these inefficiencies slow the process down for everyone and can have major impacts.

If, however, mortgage applicants could simply share validated financial/tax records, mortgage providers could use that information to make quick decisions with reduced risk. What’s more, applicants could share only relevant, high-level information, rather than expose their entire financial history.

Individual risk management

Currently, individuals can manage their credit score/risk profile via third party providers like Experian, Equifax and TransUnion.

These credit reporting agencies use limited information, such as credit cards, store cards and loans to assess risk. Individuals need to understand what factors each agency uses to ‘game’ the system.

For example, someone who has always been careful with their money, kept to a strict budget and never taken out a loan or credit card will have a far worse credit rating than someone who regularly uses debt to finance their lifestyle. So, even though they may have amassed a good deal of savings, they cannot get a good deal on a loan or mortgage. With Open Finance, these individuals would be able to quickly prove their earnings, spending, and savings, decreasing their risk profile in line with reality.

MTD software providers will be in a unique position to develop a two-sided marketplace for finance, allowing credit providers to match products to individuals’ risk profiles. When a customer needs a loan, credit card or mortgage, they can simply browse products for which they have already been approved, applying and receiving finance instantly.

Ultimately, Open Finance has the potential to help the UK and other nations recover from the seemingly unending series of crises that have plagued the early 21st century by allowing people to access finance quicker in order to grow their business and personal finances while reducing risk, inefficiencies, and costs.

Want to find out more about Open Finance and how MTD could help make finance more accessible? Submit your questions for the APARI webinar, in conjunction with LandlordZone (30th November 2021) and get the answers you need!

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The potential of Open Finance and the digitisation of tax records | LandlordZONE.

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BREAKING: Government toughens up smoke and C0 alarm regulations

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Social and private landlords are to face tougher new rules which make it mandatory to fit smoke alarms in all rented accommodation regardless of tenure, and widen the conditions under which they must be fitted.

Revisions to the smoke and carbon monoxide detector regulations also require carbon monoxide alarms to be fitted when new appliances such as gas boilers or fires are installed in any rented home.

All landlords – in both private and social sectors – also now have to repair or replace smoke and carbon monoxide alarms once told they are faulty.

Timothy Douglas (pictured), policy manager at Propertymark, believes the change is both welcome and necessary to improve tenant safety.

“Private landlords have been required since 2015 to provide working smoke and carbon monoxide detectors where applicable in rented property, and the extension of the regulations to encompass gas boilers is a sensible amendment,” he says.

“Propertymark has long called for tenants to receive the same level of protection, irrespective of tenure, and these changes go some way to rectifying that.”

However, Douglas adds that in order for landlords to be able to make necessary checks, they need to be given flexibility and greater clarity.

“The current requirement for alarms to be tested on the first day of a tenancy is impractical for many agents and landlords, and more workable measures are needed.”

Eddie Hughes MP (pictured), Minister for Rough Sleeping and Housing, says about 20 people are killed each year in accidental carbon monoxide poisoning, and many more through house fires.

“I’m proud that the new rules being proposed will ensure even more homes are fitted with life-saving alarms.” Says Hughes:

“Whether you own your home, are privately renting or in social housing – everyone deserves to feel safe and this is an incredibly important step in protecting those at risk.”

The government has promised to update guidance relating to where alarms are fitted and to ensure alarms meet relevant standards.

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Reviewing the results of another demand focussed government initiative is the property market equivalent of Groundhog Day

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Research by GetAgent.co.uk, has highlighted how huge levels of buyer demand spurred by the stamp duty holiday impacted property prices. Last week, the government released its latest house price index providing the first concrete view of the market in September of this year when the curtain finally fell on the stamp duty holiday.

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Bank of England to stop giving hints

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The Governor of the Bank of England confirmed to the select committee that he was not a fan of the bank’s previous forward guidance policy, instigated by Mark Carney.

Forward guidance (hints given externally) of the Bank of England’s economic views led to widespread press anticipation of an interest rate rise at the last MPC meeting.

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