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Em Morley

Poor Housing Standards Cause Illness and Injury to Nearly Half of UK Tenants

Published On: April 2, 2019 at 8:55 am

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Categories: Tenant News

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A new study into poor housing standards in the private rental sector (PRS) has revealed that almost half of tenants have suffered health problems or an injury due to the state of their rented homes.

This study, conducted on behalf of London property maintenance experts Aspect, was based on 1,000 responses from existing and previous renters.

The results show that 44% of respondents have experienced illness or injury as a result of poor housing standards. This information comes as The Homes (Fitness for Human Habitation) Act has been put into force, which makes amendments to existing laws, allowing tenants to more easily take their landlord to court, if the accommodation they provide does not meet legal standards.

In particular, these results show that 8% of tenants have sustained cuts and scrapes from sharp edges and poorly fitted fixtures. The same number also experiences an injury from tripping or falling, caused by maintenance issues such as loose-fitting carpet or loose steps.

In relation to health problems, 19.4% of respondents said that they have experienced stress and anxiety due to the poor housing standards that they have experienced.

Percentage of those who have experienced an illness or injury due to the condition of their rented home, split into age categories: 

Age%
18-24 year-olds58
25-34 year-olds56
35-44 year-olds54
45-54 year-olds39
55+27

Nick Bizley, commercial director at Aspect, has commented: “It’s alarming but not surprising that so many UK tenants are reporting health problems directly related to the condition of their home.

“From first-hand experience, the age imbalance of those suffering ill-health and injury due to the condition of their home can be directly related to the younger age group not being confident enough to bring maintenance issues up with their landlord.

“Our tradespeople regularly see and report examples of corner-cutting on maintenance, especially where properties have been converted into homes of multiple occupancy, such as a large houses converted into flats, but also at the higher end of the property market, too.”

Cities with the most property-related injuries and illnesses reported, shown as a percentage:

Area%
Birmingham57.58
Swansea57.14
Plymouth56.52
Leeds55.00
London52.87

Cities with the fewest property-related injuries and illnesses reported, shown as a percentage:

Area%
Chelmsford14.29
Oxford30.43
Liverpool31.43
Manchester31.46
Aberdeen33.33

Nick Bizley also said: “Our people also regularly see poorly ventilated homes as a direct result of landlords converting large properties into flats without allowing for sufficient ventilation in each subsequent property – this leads to damp, which causes mould, which is proven to have a detrimental impact on health.

“I think landlords can be ignorant of their obligations, so we hope this new legislation will clarify those obligations to ensure homes are fit for habitation and lead to a general improvement for living conditions across the rental sector.”

The Impact that Rogue Landlords are Having on the Industry

Published On: April 2, 2019 at 8:02 am

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Categories: Landlord News

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Alexandra Morris, the Managing Director of MakeUrMove, comments on the impact rogue landlords have on the whole of the industry. 

The topic of rogue landlords has been thrown into the limelight as a result of controversial landlord Fergus Wilson’s recent appearance on Panorama. 

The perception of Fergus Wilson is that he’s a rogue landlord, but, unfortunately, he may well be a casualty of various legislation introduced by the Government. Some of the recent changes have included the reduction in mortgage interest tax relief on buy-to-let properties, increases in Stamp Duty and the introduction of the tenant fees ban, which is resulting in higher costs for landlords. 

The rogue landlord scale

The term rogue landlords doesn’t just have one fixed meaning, and, arguably, there are various levels of seriousness. There are those who are out and outright fraudulent who deserve the title of rogue landlord. 

However, on the other end of the scale are the accidental or casual landlords, who have ended up letting out a property due to unplanned circumstances. The various changes to legislation are causing confusion for many landlords as to their rights and responsibilities. As a result, some landlords may be acting inadequately through a lack of education, and simply don’t realise until a tenant or letting agent highlights it to them. 

Landlords facing increased costs 

Similarly, there are also landlords who are having to deal with increased costs, such as the loss of mortgage interest tax relief, again, due to the latest rules and regulations in the industry, and the need to cut costs is causing them to be rogue. 

Rather than being rogue, the need to cut costs comes down to a lack of preparation and knowledge on the novice landlord’s part. For example, they might have become too reliant on their existing monthly income from their property. The difference is, professional landlords usually have plans in place well in advance to cover any unplanned costs, or a reserve in the bank. 

With the recently introduced Fit for Human Habitation Act, landlords need to be even more prepared with their money. For example, if a property needs new carpets and a deep clean, a cost that many landlords might not account for, then landlords will have to pay up before the property can be rented out.

Taking responsibility 

Additionally, when a landlord faces claims of substandard practice, then we often see the blame shifted onto tenants or letting agents. This may be because landlords haven’t got the insurance, which covers all of the costs required for letting out their property. However, landlords need to take the responsibility themselves, as they are the ones responsible for making changes to their property. 

TV portrayal of landlords 

We absolutely support the exposing of criminal landlords. However, there also needs to be more balance to show the bigger picture and represent landlords more fairly. 

Programmes such as the latest Panorama episode, Landlords from Hell, and The Week The Landlord Moved Inprovide the British public with a distorted and disproportionate view of landlords as a whole, with our research indicating that 65% of landlords agree.

In reality, the number of rogue landlords in the market is in the minority, yet the media continues to portray all landlords in a way which leaves good, honest landlords feeling hugely undervalued. 

Landlords are even beginning to think that the sensationalist reporting of these programmes, and the portrayal of worst case scenarios has contributed to all landlords being penalised with the Government’s new legislation, which favours tenants and makes renting out properties less viable.

An overhaul of the housing market 

The current conditions in the housing market are greatly damaging for landlords and property investors. We know that the majority of landlords are good landlords, but, if the Government doesn’t step in and introduce legislation that supports landlords, as well as tenants, then we may see more landlords being forced into trying to cut costs, resulting in rogue behaviour.

UK House Price Growth Remained Soft in March, Reports Nationwide

Published On: April 1, 2019 at 9:52 am

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Categories: Property News

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UK house price growth remained soft on both an annual and monthly basis in March, according to the latest House Price Index from Nationwide. 

Month-on-month, the average UK house price rose by 0.2% in March, which is up from 0.0% in February. Annual growth also improved last month, from an average of 0.4% in February, to 0.7%. 

This takes the typical UK property value to £213,102.

Robert Gardner, the Chief Economist at Nationwide, says: “UK house price growth remained subdued in March, with prices just 0.7% higher than the same month last year. 

“Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, even though survey data suggests that sentiment has softened.”

He continues: “Measures of consumer confidence weakened around the turn of the year, and surveyors report that new buyer enquiries have continued to decline, falling to their lowest level since 2008 in February. 

“While the number of properties coming onto the market has also slowed, this doesn’t appear to have been enough to prevent a modest shift in the balance of demand and supply in favour of buyers in recent months.”

Gardner comments on the country-by-country data: “Northern Ireland remained the strongest performing home nation in Q1 [the first quarter], although annual price growth softened to 3.3%, from 5.8% last quarter. Scotland saw a slight pick-up in annual price growth, to 2.4%, while Wales saw a marked slowing in growth, to 0.9% (from 4.0% last quarter).

“Meanwhile, England recorded its first annual price fall since 2012, with prices down 0.7% compared with Q1 2018, driven by declines in the South East of England.”

He also assesses regional statistics: “London was the weakest performing region in Q1, with prices 3.8% lower than the same period of 2018 – the fastest pace of decline since 2009 and the seventh consecutive quarter in which prices have declined in the capital. This trend is not entirely unexpected, however, as it follows several years of sustained outperformance, which left affordability more stretched. Policy changes that have impacted the buy-to-let market in recent years are also likely to have exerted more of a drag in London, given that the private rental sector accounts for a larger proportion of the housing stock in the capital than elsewhere in the country.

“More widely, prices across the South of England (and to a lesser extent in the Midlands) are also well above pre- financial crisis peaks, while those in Northern England, Wales and Scotland are still close to 2007 levels. However, prices in Northern Ireland are still more than 35% below the all-time highs recorded in 2007.”

Lucy Pendleton, the Founder Director of independent estate agent James Pendleton, gives her thoughts on the report: “London’s annual 3.8% fall in the past quarter is a bruising start to the year.

“The silver lining for the capital is that, on the doorstep, there’s every indication that price falls are pulling buyers back to the table, threatening improvements in transaction levels. This will leave London better prepared for all eventualities to Westminster’s self-defeating and interminable Brexit waggle dance.

“Some of the regions are doing remarkably well by comparison, but it is the performance of London and the South East that is dragging the overall barometer for England down, as it experienced its first property price fall since 2012.  

“Chaos in the House of Commons is imposing shaky ground on UK streets, with the unfortunate threat of further aftershocks a possibility.”

New Energy Efficiency Rules for Landlords Introduced Today

Published On: April 1, 2019 at 9:32 am

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Categories: Law News

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New energy efficiency rules for landlords of rental properties in England and Wales come into force today (Monday 1stApril 2019) – and it’s no April fool!

The changes detail the costs that landlords legally face in improving any of their properties that have an Energy Performance Certificate (EPC) rating below E.

The Statutory Instrument to introduce the new rules was made somewhat quietly on 15th March 2019. It will have gone unnoticed for many landlords and letting agents, as the industry focuses on the legal requirement also coming into force today for agents to have Client Money Protection (CMP), ahead of the tenant fees ban.

However, the Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019 do put important new responsibilities onto landlords from today.

The new regulations focus on the Minimum Energy Efficiency Standards (MEES) for letting domestic property. This requirement has been in force for a year now, on new or renewed tenancy agreements.

The amendment made on 15thMarch introduces a new self-funding element for residential landlords, which takes effect if landlords are unable to access third party funding to improve any rental properties with F or G ratings.

The self-funding element is capped at £3,500 including VAT per property. It means that a landlord without funding must spend up to this amount sufficient to improve the property to a minimum E rating. A landlord with third party funding may have the full costs covered. If there is no funding, the £3,500 maximum goes on both purchasing and installation. 

Another possibility is that the landlord tops up third party funding, to total £3,500 maximum.

The landlord can choose to make any improvements that they wish, including those made in an EPC report, “so long as they are confident that the measure(s) will improve their sub-standard property to a minimum of EPC E”.

If the landlord decides to make improvements that are not “relevant energy efficiency improvements” and the property is still below an E rating, then the landlord will have to make further changes.

EPC

A landlord who has made all of the “relevant energy efficiency improvements”, but the property is still below an E, will be able to apply for an exemption.

Possible third party funding sources are: a Green Deal finance plan, local authorities, or an Energy Company Obligation.

From 1stApril 2020, the minimum E rating will also apply to properties that have been let since before April 2018.

New Government guidance states: “Landlords are encouraged to take action as soon as possible to ensure that their properties reach EPC E by the deadline of April 1, 2020.”

The guidance also gives examples of how landlords can pick-and-mix energy improvements.

For example, recommended measures might be to improve loft insulation, install floor insulation, low energy lighting, internal or external wall installation, and solar panels. This would cost over £15,000. However, the landlord is only required to choose the measures that total less than the cap.

Local authorities have been tasked with enforcing the MEES, which only apply to private rental housing, not the social rental sector.

Wales Letting Fees Ban Passes Final Stage in Parliament

Published On: April 1, 2019 at 8:57 am

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Categories: Law News,Tenant Fees Ban

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Progress is being made with plans to bring in a letting fees ban in Wales, similar to the one due to come into force in England on 1stJune. Letting agents and landlords will be banned from charging fees to tenants in the private rental sector (PRS).

The Bill banning fees charged to tenants passed its final stage in parliament last week.

Currently, landlords and letting agents can charge tenants in Wales for a range of administrative costs, including credit, reference and immigration checks.

A stop will hopefully be put to this, as the Renting Homes (Fees etc.) (Wales) Bill has gained support from AMs from all parties. It will prohibit all fees connected to granting, renewing or continuing a standard occupation contract except those that have been explicitly permitted by the Bill.

The Bill is now waiting for Royal Assent and, as soon as it has passed this stage, we expect to hear a definite date for its enforcement. It will list ‘permitted payments’, such as rent, and will change the cap for security and holding deposits, the latter of which is due to be set at one week’s rent. 

It will become illegal for landlords and letting agents to charge tenants for anything other than permitted payments. These are: rent, security deposits, holding deposits, utilities, communication services, council tax, green deal charges and default fees.

However, there are worries from some that this new law could lead to rising rents, and potentially impact the lettings sector in a negative way, leading to a loss of jobs for agents.

Following a debate in Plenary on general principles last November, David Cox, ARLA Propertymark’s chief executive, commented: “A ban on fees will have a significant impact on the private rented sector. The Committee has listened on the issue of payments of utilities but further consideration is needed around charges for change of sharer and surrender of tenancy.

“Furthermore, reference checks must be exempt as referencing is really important when you’re setting up a tenancy agreement and the risk is that without any means through which to cover the cost of this process, the most vulnerable tenants will find it very difficult to secure suitable rental accommodation.”

Mandatory CMP Schemes seen as a Major Milestone for Lettings Industry

Published On: April 1, 2019 at 8:00 am

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It is now compulsory for letting agents to be part of a Client Money Protection (CMP) scheme. This change is a significant milestone for the lettings sector. Being part of such a scheme will bring all-round benefits for agents, landlords and tenants, according to rental payment automation provider PayProp.

The introduction of CMP schemes as a mandatory requirement has been introduced today, exactly two months before the Tenant Fees Act comes into force. Such a scheme is designed to keep client money safe.

The majority of agents are already compliant, but this regulatory strategy has been designed to promote an improvement to professionalisation across the industry.

CMP schemes exist to help protect the funds that landlords and tenants pay to agents, including rent and deposits. If an agent were to steal a client’s money or the agency goes bankrupt, a back up would then be in place to allow consumers to make a claim for the return of their money.

David Cox, Chief Executive of ARLA Propertymark, has commented on the introduction of mandatory CMP scheme requirements: “Following our successful campaign, spearheaded in Parliament by Baroness Hayter of Kentish Town, and supported by 30 organisations including member agents, the other professional bodies for letting agents, tenant groups and landlord bodies, the Government ruled in favour of mandating CMP for all letting agents in England from Monday 1st April 2019. From Monday, all agents will need to have joined an Approved CMP scheme, or they will be operating illegally and risk facing large fines.

“Those who haven’t yet joined a scheme must sign up to one immediately. Propertymark has received formal Approval from the Housing Minister, Heather Wheeler MP, to operate a Government-authorised CMP scheme on behalf of its members, so they are all automatically covered. Those who aren’t part of a professional body can sign up to Money Shield, a straight-forward and cost-effective solution with formal Approval.”

A choice of providers made available to agents

There is an estimated £3 billion of client money being held by letting agencies. It is also thought that around 60-80% of agencies are currently already members of a CMP scheme (either directly or through a trade association).

A number of compliant CMP schemes are available for agents to choose from. Examples include Propertymark, the National Approved Letting Scheme, Money Shield, RICS and Client Money Protect. All of these options have been approved by the Government to operate as a CMP scheme.

Neil Cobbold, chief operating office of PayProp, has commented: “It’s positive that the estimated 20-40% of agents who have not been offering CMP now have clarity from the government on which CMP schemes are compliant with the law.

“Having several approved CMP providers helps to keep costs competitive for agents, while ensuring that all the schemes work to the highest possible standard in a competitive marketplace.”

Transparency is the main focus

It is promising that at least 60% of agents are already compliant. This shows that there is support behind the Government’s commitment to increase transparency in the lettings market.

Cobbold continued: “Regulation like this reduces the risk for landlords and tenants, allowing them to operate in the knowledge that their money is safe. And that is of course great for the industry’s longevity.

“Mandatory CMP can be effectively supported by agents adopting digital payment systems which are secure, keep records of all activity and reduce the margin for error.

“This new legislation, combined with agents adopting modern and transparent payment systems, can contribute towards greater accountability and even a reduction in cases of letting agent fraud. This will reflect positively across the whole industry.

“What’s more, introducing mandatory CMP ahead of the Tenant Fees Act on June 1 is vital as a small minority of agencies may struggle financially once fees are banned, potentially putting some client money at risk.”