LATEST: Changes to Model Tenancy are ‘causing confusion’, says pets expert

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A leading expert in the world of pets and renting has told a webinar today that the government’s recently-updated voluntary Model Tenancy Agreement is causing confusion among renters many of whom now think – wrongly – that the law has now changed in their favour.

It’s easy to see why some tenants are confused – the language used by ministers when the changes were announced on January 28th were quite emphatic: “Through the changes to the tenancy agreement we are making today, we are bringing an end to the unfair blanket ban on pets introduced by some landlords.” 

But adoption of the new model tenancy and its new terms and conditions are voluntary and not mandatory.

The comments about the confusion were made during a Zoom webinar this morning held by MP Andrew Rosindell after Covid restrictions in parliament put the kibosh on the second reading of his Dogs and Domestic Animals (Accommodation and Protection) Bill.

This now means the bill stands only a slim chance of becoming law, and was not even referred to when housing minister Chris Pincher replied to a question in parliament yesterday on the subject, saying that the updated Model Tenancy Agreement struck the correct balance between “protecting private landlords from situations where their properties are damaged by badly behaved pets whilst ensuring responsible pet owning tenants are not unfairly penalised”.

Wrong impression

But several of the pet campaigners, enthusiasts and experts who spoke at Rosindell’s webinar reported that many tenants now believe they have a right to have a pet in their rented home.

“The recent changes to the model tenancy agreement are a positive step as the government clearly acknowledges something needs to be done, but it has unintentionally caused a lot of confusion and problems,” says Gabby Kuehn of social platform Paaw House, who herself is a landlord (pictured above, to left).

“We’re not in a situation where people looking for rented accommodation feel that it’s a given that they can take pets into their properties, and landlords feel like they are being ‘told what to do’ with their own property.

“Legislation that balances the interests of both, which Andrew Rosindell’s bill achieves, is so important.”

Read the full text of Rosindell’s Bill

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Walsall Council wrongly Interpreting-Changing Housing law and fining Landlords

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A landlord mate has sent me the below issues with Walsall Council and has asked for anyone’s help/experiences:

Have any of you had any trouble with the pilot EPC/MEES scheme that Walsall Council has undertaken.  In brief, they are issuing landlords with Compliance Notices with £5000 fines if you don’t comply. 

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TAX RAID: This is Rishi’s expected CGT swoop on personal and LTD portfolios next week

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Most landlords would have to fork out an extra £6,800 in tax when selling up if the Chancellor hikes up the rate of capital gains tax (CGT) to bring it in line with income tax during his March 3rd budget.

Hamptons International says the average landlord who sold their buy-to-let property in England and Wales this year made a gross capital gain of £69,000, having owned it for nearly ten years.

For a higher rate taxpayer, the increase in CGT tax rate – from 28% to 40% – would see their bill go up from £15,880 to £22,680 – assuming they can make use of their £12,300 CGT allowance. For a lower rate taxpayer, the CGT bill will rise from £10,210 to £11,340.

In another tax hit, Rishi Sunak is expected to raise corporation tax from 19% to as much as 24%, which will mean it would no longer be worth incorporating properties for some landlords.

Tax crackdowns

Record numbers made the switch last year after previous tax crackdowns have made it increasingly unprofitable to own a buy-to-let in their personal name; according to Hamptons International, about 229,000 buy-to-let businesses are now run using a company,

Under this new regime, buy-to-let owners who’ve moved their property into a company structure would see their corporation tax bill jump by more than a quarter, says Hamptons.

The average limited company landlord who owns one buy-to-let worth £190,000 will see their annual tax bill rise 26% from £968 to £1,223. 

This means their annual net profit will fall from £4,129 to £3,874 – still outweighing a higher-rate taxpayer who owns their buy-to-let in their personal name who would earn a net profit of about £3,203. 

Head of research Aneisha Beveridge (pictured) says: “Most landlords will still benefit from incorporating, but they’ll have to do their homework on the additional costs associated with setting up and owning a limited company buy-to-let portfolio.  It does mean however, that for low-rate taxpayers, it’s probably not worth it.”

Visit Hamptons International.

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‘There are too many landlords in the PRS’, leading figures tell Scots law makers

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Housing experts have made controversial calls for a ‘slimmed down’ Scottish private rented sector with fewer private landlords in order to better serve tenants on low incomes.

During a local government and communities committee meeting to discuss the stalled Fair Rents Bill, MSPs heard that the sector was currently serving people it wasn’t intended to.

MSP Pauline McNeill’s bill would cap rent rises at 1% above inflation and give renters protection against excessive or unfair rent increases.

Gordon Maloney, national committee member at Living Rent, said the sector needed to be shrunk. “If one of the consequences of reducing rents is that landlords choose to sell properties, perhaps to families currently renting who would much rather buy, I think that’s something we should welcome and embrace.”

He added that the power imbalance between tenants and landlords had grown over the pandemic.

“Some landlords have acted disgracefully, hiking rents, refusing to make repairs, treating tenants appallingly,” said Maloney.

Tony Cain, policy manager at the Association of Local Authority Chief Housing Officers, agreed that the sector was too big.

“We need to transform the housing market,” he said. “The private rented sector doesn’t focus much on service quality and tenants’ interest, but on landlords’ rights and their interests. That culture needs to be changed.”

Although he agreed there needed to be a larger social rented sector, John Blackwood (pictured), chief executive of the Scottish Association of Landlords, said both tenants and landlords would be adversely affected by the bill.

“Landlords rely on rental income to maintain and upgrade property – any limit on rent will affect investment,” said Blackwood, who added that it could also lead to higher rents.

However, Living Rent’s Maloney said landlords shouldn’t have the expectation that if they made an improvement they could increase the rent. “The relationship between rent and quality should be more of a stick [than a carrot] and tenants should be able to force repairs.”

Watch the debate.

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LATEST: Cross-party parliamentary group urges housing secretary to support struggling landlords

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A cross-party group of MPs and peers has called on the government to financially support struggling landlords and to protect hard-hit renters. 

Twenty Labour, Liberal Democrat and Green Party MPs and three peers including Stephen Timms, Tim Farron, Caroline Lucas and Diane Abbott, are urging the government to bring forward the Renters Reform Bill to make sure landlords can’t use no-fault evictions during the pandemic or in its aftermath.

In a letter to Housing Minister Robert Jenrick, they add that that in instances where Local Housing Allowance doesn’t cover the rent arrears, local authorities should be provided with ring-fenced funding to provide grants. 

The MPs also suggest that support should be made available to landlords at serious risk of financial hardship.

The letter says: “We welcome the suggestion from Generation Rent that landlords should be able to claim for up to 80% of lost rental income and that local authorities should be able to prioritise grants to those landlords who have no other income or savings, have a mortgage, or have tenants who are in serious arrears.”

Generation Rent is also calling on the government to create a Covid Rent Debt Fund to clear rent arrears, particularly in light of new DWP figures which show that more than 715,000 households could not cover their rent in full with the Local Housing Allowance.

Alicia Kennedy (pictured), director of Generation Rent, says: “The government’s inadequate support for private renters is pushing families deeper and deeper into debt, with homelessness and destitution awaiting once the crisis of the pandemic clears.”

However, responding to proposals for tenants’ loans to help clear rent debt, Amina Gichinga from London Renters Union, adds: “Government backed loans would help underwrite landlord profits but would leave renters pressured to take on massive debt repayments they can’t afford.”

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HSBC plans radical 40% cut in office space

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Although it is well known that HSBC is consolidating its operations to save costs, as is the case with most banks, Britain’s biggest bank has shocked the property world with its radical plans.

Headquartered at 8 Canada Square in Canary Wharf, London, the giant international bank, which is active in the Far East with its operations based in Hong Kong, says it will vacate around 40% of its offices in London and around the world over the coming years.

The move will put pressure on landlords at a time when office vacancies have equalled those at the height of the financial crash of 2008. Rents have fallen by an average of between 5% and 6% for prime office space.

Many businesses are looking seriously to their future office space requirements, trying to predict whether the pandemic will lead to a permanent shift in work patterns and lifestyle changes for staff.

HSBC’s chief executive Noel Quinn, has said that the company’s new plan to cut office space by 40% in the “long term” is driven by expectations that there will be “a very different style of working than before”

HSBC employs around 40,000 people in the UK in 66 offices across the coun­try. The company’s global headquarters, a 46-storey building in London’s Docklands, along with many more offices across London, represent a long-term commitment, it says, but this is a particularly problematic type of building to work in during a pandemic.

Property costs represent an obvious field of “low-lying-fruit” when it comes to cutting costs for banks, and with HSBC’s property costs running into billions it’s understandable that the bank will target reducing its property foot­print as and when leases come up for renewal, or through property sales. In any case, in a digital world, banks no longer likely to need the same amount of prime real estate in strategic locations.

However, HSBC’s plans run counter to the government’s drive to bring people back into offices once the lock-down is eased. Lots of secondary businesses and transport links rely entirely on the footfall provided by city office workers.

Also, HSBC’s plans run counter to those indicated by its rival banks, including Nat West, Barclays and Loyds. Both have expressed doubts that their staff will want to continue working form home, but have put off making any concrete property plans.

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Landlords have failed the housing test, say unhappy student tenants

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Large numbers of student renters are unhappy with their landlords, a new study shows.

OpenRent’s survey found that 64% rate the support provided by their private landlord or letting agent during the pandemic as unsatisfactory compared with 51% who say the same of their student accommodation provider.

According to the findings, a third report that their landlord or university hasn’t given them a rent reduction when asked since last March, although 11% had received one.

Another two thirds report feeling trapped in a rental contract they no longer wanted.

The online lettings platform found that 11% of students are currently in arrears, owing an average of £1,341; 34% of students who rent have been unable to pay the full amount at some point since the pandemic started, while 56% of students find their rent “usually or always hard” to afford.

Rent arrears

OpenRent says 13% of students owe between one to two months and 7% are more than three months behind.

The survey reveals that 63% of students have worked since March 2020.

But they’ve lost an average of £2,761 in earnings since the start of the pandemic and 76% of those working say their ability to earn had been affected.

Only 30% of students who worked have been able to access the government’s economic support schemes.

OpenRent’s findings are similar to a recent survey from the National Union of Students which showed that 22% of students haven’t made their payments due to the pandemic, 27% haven’t paid bills and more than two-thirds are worried about being unable to pay rent.

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Court N24 order opinions?

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My freeholder/landlord took me to court for non-payment of Service Charge arrears, which I disputed. I was away on holiday when the court papers were delivered and judgement was issued (CCJ).

Upon return, I immediately paid the CCJ direct to the claimant on the understanding via his solicitor that should I have the judgement set aside he would refund the money in full.

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I have the misfortune of being taken to court by nightmare tenant in small HMO?

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Hi all 118ters, I have had the misfortune of being taken to court by a nightmare tenant who rents a room in a small HMO. The tenant in themselves is not too bad but her boyfriend who has moved in with her (not in accordance with her tenancy agreement) is a foul-smelling weed head.

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PICTURES: Fire at HMO property run by convicted rogue landlord

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A rogue landlord who ignored requests to install fire safety features has been handed a suspended prison sentence after a fire gutted her five-bedroom HMO.

Nicola Selwood admitted three fire safety offences relating to the two-storey house in Holway Avenue, Taunton, that housed seven people but had only one smoke alarm.

Taunton Crown Court heard that she had been told by the fire service and local council to make changes as far back as 2008 but hadn’t done so, resulting in a fire which destroyed the house – formerly her family home – leaving her £100,000 in debt.

Devon and Somerset Fire and Rescue Service firefighters were called to the serious fire on 7^th August 2018 where two tenants had managed to escape.

One was treated for minor burns. A fire service investigation, carried out with Somerset West and Taunton Council, revealed that the fire was accidental but that Selwood had failed to carry out a fire risk assessment.

They found that the HMO had no suitable fire warning and detection system, fire doors, or safe escape route. It also had no emergency escape lighting in case of mains electrical failure.

When previously asked to carry out the work, Selwood told council officers she was no longer renting out rooms.

However, during the investigation she admitted that within a year she had started renting out rooms again for up to seven people at a time and did so up until the time of the fire. She’d even spent money on converting the garage to provide additional accommodation. 

Fire safety manager, Pete Smith, says: “It is extremely fortunate that the fire occurred during the day when most of the occupants were out. Had the fire started at a time when people were asleep, the outcome could have been very different.”

Selwood was sentenced to a nine-month prison term, suspended for 18 months.

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