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Em Morley

Fury towards new tenant sub-letting law

Published On: April 7, 2015 at 11:41 am

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Categories: Landlord News

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The 2015 Budget has been heavily criticised by the Residential Landlords Association (RLA), who branded Chancellor Osborne’s announcement as, ‘a nightmare.’

 

Osborne has proposed plans to make it illegal for tenancy agreements in the private sector to include clauses that prevent the property from being sub-let.

 

Small Print

 

Page 51 of the Budget Red Book includes the heading, ‘support for the sharing economy.’ The small print included under this indicates that the government will, ‘make it easier for individuals to sub-let a room through its intention to legislate to prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting or otherwise sharing space on a short-term basis, and consider extending this prohibition to statutory periodic tenancies.’[1]

 

Nightmare

 

Following the Budget announcement, the chairman of the RLA Alan Ward, was scathing in his response. Ward said that the, ‘measures on sub-letting are a nightmare in the making and smack of back of the fag packet policy making.’[1]

 

Continuing, Ward said that, ‘key questions remained unanswered such as who will be responsible for a property if the tenant sub-letting leaves the house but the tenant they are sub-letting to stays?’ He also said that, ‘similarly, given the Government wants landlords to check the immigration status of their tenants, who would be responsible for checking the status where sub-letting occurs?’[1]

Fury towards new tenant sub-letting law

Fury towards new tenant sub-letting law

 

Ward feels that, ‘it is difficult to see landlords supporting,’ the new measure. [1]

 

Landlord’s Energy Savings Allowance

 

Additional disappointment from the RLA was aimed towards Osborne’s failure to extend the Landlord’s Energy Savings Allowance. This is due to end in April and has been invaluable in assisting landlords to invest in improving the energy efficiency of their homes.

 

With the scheme not being extended, energy efficiency improvements can now only be financed through tenants’ energy bills, as part of the Green Deal.

 

Ward was angry at this announcement, stating that, ‘ministers have talked the talk on improving the energy efficiency of the nation’s rented housing stock but today they have pulled the rug from under the feet of landlords and tenants.’[1]

 

 

 

[1] http://www.landlordtoday.co.uk/news_features/2015-Budget%3A-Tenants-will-be-able-to-sublet

 

 

Important Changes to the Section 8 Notice

Published On: April 6, 2015 at 3:06 pm

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Categories: Landlord News,Law News

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Landlords are being warned about important changes to legislation that have just come into force.

At present, there are two options that landlords are obliged to follow when seeking to end an Assured Shorthold Tenancy agreement. The options are either:

*A Section 21 notice-This gives landlords a standard route to possession

*A Section 8 notice-This is used in specific circumstances, in particular for rent arrears

 

New Legislation

From today, Monday 6th April 2015, new legislation regarding the wording of Section 8 notice has come into place. Landlords in England must make sure that they use the new Section 8 notice with the alternative wording immediately.

Important Changes to the Section 8 Notice

Important Changes to the Section 8 Notice

 

The amended version of the Section 8 notice can be downloaded from the National Landlords Association’s website. It is advisable that any copies of the old form stored on computers or as a hard copy are disposed of to avoid confusion.

 

Changes

All Section 8 Notices served in England from today must include the new wording. If notices with the old wording are served, landlords face having their case dismissed by a judge if a Possession Order is sought.

 

 

2015 Budget Review

Published On: April 2, 2015 at 11:31 am

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Categories: Finance News

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Chancellor George Osborne announced the 2015 Budget on Wednesday, in which plans to make it illegal for private sector tenancy agreements to include clauses that stop sub-letting of the property were explained.

The Residential Landlords Association (RLA) have called the Budget “a nightmare”1 after reviewing the new sub-letting terms.

In the Budget Red Book, page 51 details the matter in question under the title Support for the sharing economy. It states that the Government will “make it easier for individuals to sub-let a room through its intention to legislate to prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting or otherwise sharing space on a short-term basis, and consider extending this prohibition to statutory periodic tenancies.”

Chairman of the RLA, Alan Ward, says: “The measures on sub-letting are a nightmare in the making and smack off back of the fag packet policy making.

“Key questions remained unanswered such as who will be responsible for a property if the tenant sub-letting leaves the house but the tenant they are sub-letting to stays?

“Similarly, given the Government wants landlords to check the immigration status of their tenants, who would be responsible for checking the status where sub-letting occurs?

2015 Budget Review

2015 Budget Review

“Whilst the RLA awaits further detail on this measure, it is difficult to see landlords supporting it.”

Tenant eviction experts Landlord Action, has also voiced its concern over the plans.

Founder of the company, Paul Shamplina, explains: “This appears to have slipped in under the radar which, if it goes ahead, will throw up a magnitude of problems in the buy-to-let industry.

“We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented.

“We experience continual problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and sub-letting to as many people as possible. They draw up separate agreements and trick sub-tenants into thinking they are the landlord. By the time landlords find out, damage to properties from over-crowding can run into thousands, and the tenant who holds the legitimate tenancy agreement is nowhere to be found.

“The detail is yet to be revealed, but in my opinion, there should have been a period of consultation with the industry before this was announced. This is not the way to fix the housing shortage, and in fact will have quite the opposite effect if more and more landlords are exposed to the risk of nightmare sub-tenants. Giving landlords even less control over their own property by preventing them from instilling clauses which prevent sub-letting could drive more good landlords out of the marketplace.”1

Landlord Action is involved in a Channel 5 documentary, due to be shown in a few months, that exposes the level of sub-letting in the country.

Furthermore, the RLA is also disappointed in the Budget’s failure to lengthen the Landlord’s Energy Savings Allowance, which will end next month. The allowance has supported landlords in investing in energy efficiency improvements in their rental properties.

Discontinuing the allowance will mean that improvements can only be financed by the tenants through their energy bills, as included in the Green Deal.

Ward says: “Ministers have talked the talk on improving the energy efficiency of the nation’s rented housing stock, but today they have pulled the rug from under the feet of landlords and tenants.”2

1 http://www.landlordtoday.co.uk/news_features/Landlord-Action%3A-“Sub-letting-will-be-catastrophic-for-the-rental-industry”

2 http://www.landlordtoday.co.uk/news_features/2015-Budget%3A-Tenants-will-be-able-to-sublet

 

Landlords Triumph over Selective Licensing Reforms

Published On: April 2, 2015 at 9:59 am

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Housing minister Brandon Lewis has announced reforms of selective licensing schemes for landlords in whole boroughs or cities, meaning that local councils’ decision-making powers have been restricted.

Since 2010, local councils have been able to license landlords in entire boroughs or jurisdictions, in a bid to tackle issues such as anti-social behaviour in alleged hotspots. This caused a huge rise in the amount of schemes being launched.

However, councils will now need Government approval before implementing a licensing scheme, if they want to license a whole area or large proportion of the market. This is suspected to be over 20% of either the geographical area covered by the council or the local private rental sector. The changes come into force on 1st April 2015.

Landlords Triumph over Selective Licensing Reforms

Landlords Triumph over Selective Licensing Reforms

The National Landlords Association (NLA) has been continuously lobbying against the schemes since 2010. It also published a report on the state of landlord licensing around the country in February.

The report highlights a sharp increase in blanket licensing schemes since 2010, but also emphasises a lack of enforcement actions by local councils. The NLA also found a connection between the political control of councils and their tendency to license landlords.

Chief Executive Officer of the NLA, Richard Lambert, says: “We’ve argued solidly since 2010 that councils have been abusing their power to push through blanket licensing schemes. Today’s announcement means that if a council intends to license a large proportion of its housing it will first need to show the case stands up to independent scrutiny.

“The Government was the first to see a copy of our licensing report, and we’re delighted they have listened to our case because at present, the driving force behind licensing landlords seems to be the political will of a given local council, regardless of the evidence.

“Many local councils won’t like this decision one bit, because until now they’ve been their own judges, and the only way for landlords to challenge them has been through the difficult and complex route of judicial review.

“Landlords are getting fed up with being unfairly targeted and made responsible for problems such as anti-social behaviour when in reality they have little effective control over the issue, except by eviction. Hopefully this now means that councils who are serious about tackling poor property standards and anti-social behaviour will first look to the extensive existing legal powers they already have to combat the issues.”1

1 http://www.landlordtoday.co.uk/news_features/Victory-for-landlords-regarding-selective-licensing

First Time Buyers £742 a Year Better Off than Renters

Published On: April 1, 2015 at 12:35 pm

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Figures from the Halifax have indicated that first time buyers in the UK are £742, 9%, a year better off than those who rent.1

First Time Buyers £742 a Year Better Off than Renters

First Time Buyers £742 a Year Better Off than Renters

For a first time buyer purchasing a three-bedroom home, the average monthly buying cost, including mortgage payments, was £682 in December 2014. This is £62 less than a tenant will pay in rent, at £720 per month on the same property type.1

Craig McKinlay, Mortgage Director at Halifax, comments on the research: “Average home buying costs are significantly lower than average rental costs, providing first time buyers with a large financial saving if they can get on the housing ladder.

“While the timescales associated with raising a sufficient deposit to buy a home present a hurdle to many potential first time buyers, the significant difference in costs between buying and renting, combined with still low mortgage rates, increased consumer confidence and the Help to Buy scheme, have all been factors driving the substantial rise in first time buyers over the past two years.”1

However, in 2014, the average monthly buying cost rose by £46, whereas the average monthly rent increase was just £28.1

326,500 first time buyers stepped onto the property ladder in 2014, a 22% rise from the previous year.1

Within London, the average monthly cost for first time buyers stood at £1,275, but tenants were paying £1,387 per month in rent.1

The highest cost differences were found in the North West at 17%, Scotland at 11%, and Wales with 8%.1

The lowest cost differences were seen at 1% in the East Midlands, 2% in the South East, and 4% in Yorkshire.1

Around the country, the figures are as follows1:

Area

Monthly savings by buying
Scotland £65, 11%
North £35, 7%
Northern Ireland £28, 7%
Yorkshire and Humberside £19, 4%
North West £109, 17%
East Midlands £6, 1%
West Midlands £30, 5%
Wales £42, 8%
East Anglia £37, 5%
London £112, 8%
South East £15, 2%
South West £54, 7%

The average monthly saving by buying in the UK is £62, 9%.1

1http://www.whathouse.com/news/article/54e326894031b95501c2e3ca/First-time+buyers+are+%25C2%25A3742+a+year+better+off+than+those+who+rent[/vc_column_text][/vc_column][/vc_row]

Landlord Licensing Scheme in Liverpool

Published On: April 1, 2015 at 9:43 am

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From 1st April 2015, all private landlords in the city of Liverpool must apply for a five-year license for each of their rental homes, under the Landlord Licensing Scheme.

The system is being launched in Liverpool under the Government’s selective licensing laws, and signing up is compulsory.

The benefits

All licensed landlords in Liverpool will be subject to a fit and proper persons inspection. Before being given a license, landlords will be asked to declare convictions for dishonesty, violence, drug-related offences, or for breaching any housing/landlord/tenant laws.

Landlord Licensing Scheme in Liverpool

Landlord Licensing Scheme in Liverpool

Properties owned by licensed landlords must meet fire, electric and gas safety standards and be in a good state of repair. Landlords must also deal effectively with any complaints about their tenants.

Exemptions

Properties with a Houses in Multiple Occupation (HMO) license are exempt. There are additional exemptions for other circumstances. The full list of exemptions can be found here.

Applying

The first stage of applying is to register your contact details with Liverpool City Council, and to list the properties that you own.

Once registered, the Council will contact you to let you know how and when to complete the second part of the process, and how and when to pay.

If the application process is not started by 1st April 2015, you may be charged an administration fee or face prosecution. You can start the application here.

If you choose to complete the application offline, you can download and complete the forms from the Liverpool City Council website.

The cost

The fees detailed below apply only to online applications. For landlords who do not want to apply online, the Council will help, but will charge a fee for doing so. You can find contact details here if you do not wish to apply online.

  • First property: £400
  • Each additional property: £350
  • Properties in an approved scheme: £200

Approved schemes

The £200 rate is available to members of the CLASS Accredited Landlord Scheme and other organisations that opt to enter Liverpool City Council’s co-regulation initiative.

However, no organisations are yet to sign up to this initiative and the Council are yet to inform them of how to do so. Once these details are in place, the Council will publish information on their website.