Written By Em

Em

Em Morley

Tenants to have Rent Payment History Matched with Mortgage Criteria in UK First

Published On: March 25, 2019 at 10:08 am

Author:

Categories: Tenant News

Tags: ,,

Private tenants can now have their rent payment history matched with mortgage criteria from the country’s biggest building society in a UK first.

Thanks to a collaboration between CreditLadder and Nationwide, tenants who pay their rent on time can now have their rent payment history matched with the building society’s mortgage criteria, in line with the Government’s Rent Recognition Challenge, which was launched in the 2017 Autumn Budget.

The scheme was a £2m competition for firms to develop applications to help tenants boost their credit scores and get onto the property ladder quicker and more easily.

Now, for the first time, data accessed via Open Banking will be used to help tenants find out if they are eligible for a mortgage with Nationwide.

CreditLadder can analyse the income and expenditure data of its users, and overlay it against the building society’s qualifying mortgage criteria.

Tenants who meet the criteria, and continue to pay their rent on time, will be prompted to discuss their options with Nationwide’s mortgage consultants and apply for a loan, if they wish.

While there is no guarantee that users will be accepted for a mortgage, those who do not qualify will still receive periodical checks to see if their circumstances have changed.

Sheraz Dar, the CEO of CreditLadder, says: “Tenants already using the CreditLadder service do so to improve their credit rating, as well as looking to increase their chances of being approved for a mortgage.

“With the service now live, the relationship is the first of its kind between a rent reporting service and a mortgage provider in the UK.”

They add: “Working with Nationwide is a key plank in our plans to help those who dream of owning their own home to realise their aspirations.”

CreditLadder claims to be the first and biggest rent recognition platform in the UK, which enables tenants to add their rent payment history to their credit score.

The company was a final stage winner of the Rent Recognition Challenge and became one of 20 businesses chosen from almost 100 to join the Treasury-supported Tech Nation fintech programme.

Tech Nation’s Greg Michel comments: “It’s great to see CreditLadder grow as a business and find another way to help people reach their life goals by improving their credit score. We are proud to have them as alumni.”

A Review of the Recent Landlord Licensing Schemes

Published On: March 25, 2019 at 9:00 am

Author:

Categories: Law News

Tags:

Islington Council

By Marc Trup, the Founder and CEO of Arthur Online 

In the last year, councils have made numerous attempts to improve standards in the private rented sector. From April 2018, it was made mandatory for landlords to have a licence for properties with shared bathroom facilities. Later in the year, minimum room sizes were introduced as an attempt to further tighten controls on landlords letting out Houses in Multiple Occupation (HMOs). In light of these new changes, it’s worthwhile to look back and review the success of such schemes. 

The landlord licensing schemes were enforced by local authorities with the intention of combatting criminal or rogue landlords. The license compels landlords to partner with their local authority, to check whether the landlord’s property meets minimum standards. Under the new regulations, much smaller properties than those previously counted under the scheme were now needing licenses, meaning around 177,000 more homes needed licenses. 

Since the licensing schemes have come into place, there have been reports disputing their effectiveness in tackling rogue landlords, with experts arguing that selective licensing impacts law-abiding landlords more than criminal ones. While there have been recent news headlines of landlords facing fines of up to £30,000 for failing to obtain a licence, these are far and few between. These methods are certainly not the most effective for raising standards in the industry, and mean legitimate and professional landlords will be the ones to suffer by having to stump up the cost of the licence. 

I think another big issue facing the private rented sector is the lack of tenants clued up about their rights. The majority of tenants know what they’re entitled to in terms of adequate heating, hot water, etc. However, many are not aware that, if their issue is not resolved in a reasonable amount of time, they can report their landlord to the Health and Safety Executive for prosecution. 

The only way to raise living conditions for the long-term is to raise awareness about tenant rights. Many tenants are afraid of losing their property and becoming homeless, should they get into a dispute with their landlord. However, this simply just isn’t the case. These schemes have been effective in catching some of the biggest offenders in the industry, but they have done very little to tackle the widespread problem of rogue landlords in the UK. 

Licensing schemes are much more likely to catch out inexperienced and first time landlords who do not realise the importance of attaining a licence. In addition to receiving a fine, Sadiq Khan has a rogue landlord database, which names and shames those who have broken the law. Rather than enforcing hefty fines, a better long-term solution would be to work with landlords to offer advice and support so that they are aware of their responsibilities to tenants. For new landlords, reputational damage could end their careers, before they have properly begun. 

Marc Trup is the Founder and CEO of Arthur Online 

After selling his business to BUPA in 1998, Marc started investing in rental properties in London. Over the next 15 years Marc grew his portfolio to over 85 properties. While successful, self-managing his portfolio became increasingly difficult. With technological advances and greater connectivity, he assumed there was software available that would allow him to manage his business from his smart phone, while sipping espresso at the local coffee shop. Following a long search, he found that nothing quite cut the mustard. So being an entrepreneur, he started Arthur Online to make not only his life easier, but also that of other property managers. 

Arthur Online is a cloud-based platform that enables property managers to respond instantly and solve problems fast from anywhere in the world, be it with tenants, contractors, property owners or letting agents. Since launching in 2015, it has helped thousands of property managers like Marc run their portfolios in the cheapest, most efficient way possible by using the full potential of new technology and cloud computing. Start your free trial today by going to www.arthuronline.co.uk

Nationwide also Removes Restrictions on Letting to Benefit Tenants

Published On: March 22, 2019 at 11:00 am

Author:

Categories: Landlord News

Tags: ,

Nationwide has announced that it is the latest lender to lift restrictions that prevent buy-to-let landlords from letting their properties to tenants in receipt of benefits.

The move follows NatWest caving in to industry pressure earlier this month, by lifting restrictions on landlords letting to DSS tenants.

In October, NatWest’s lending practices came under attack after the bank told one landlord that she would either have to evict her tenant of two years, or take her mortgage business elsewhere, due to a blanket ban on benefit tenants.

Paul Wootton, the Director of Home Propositions at Nationwide, says: “Everyone should be able to access a safe and secure home suitable for their needs, but the continued presence of no DSS restrictions in the private rented sector denies this right to a group of people who are often in desperate need of somewhere to live. The repercussions of not being able to access good quality housing may leave many living in substandard properties.

“Nationwide is categoric on this issue – we do not place restrictions on landlords that could stop them letting a home to tenants in receipt of benefits.”

Around two-thirds of the largest buy-to-let lenders do not allow landlords to let their properties to tenants in receipt of housing benefits.

However, the Work and Pensions Committee has now written to a number of mortgage lenders about potential discrimination against benefit tenants, due to clauses in their lending policies.

Wootton explains the effect on Nationwide: “Recent interest in this issue, most notably from the Work and Pensions Select Committee and Shelter, with whom we have worked closely for a number of years, caused us to review both our own historic lending, and the terms of those societies we took over during the financial crisis.

“As a result, we identified and started contacting around 12,000 mortgage customers to reassure them that Nationwide has never and will never enforce any historic clauses, which might restrict them from letting to tenants in receipt of benefits, which their original mortgage terms may contain.”

He believes: “The increased focus on this issue is welcome, as are positive moves made by others, and we urge everyone, including lenders, agents and landlords, to consider what they can do to end this unfair approach. Tenants need certainty and consistency, and the industry needs a unified approach if we are to make a real impact.

“While it’s imperative that any blanket lettings restrictions are lifted, Government needs to ensure that the benefits system works properly to provide confidence for landlords.”

Wootton adds: “Nationwide believes everyone deserves a place fit to call home, but we need a more joined up and long-term approach to ensure this aspiration can be delivered.”

Rent Price Growth Rate Strengthens, According to Official Data

Published On: March 22, 2019 at 10:29 am

Author:

Categories: Lettings News

Tags:

The average growth rate of private rent prices in the UK strengthened in February, according to the latest official data from the Office for National Statistics (ONS).

In its Index of Private Housing Rental Prices (IPHRP) for February, the ONS found that the average private rent experienced a growth rate of 1.1% on an annual basis, which is up from 1.0% in the previous month.

The rent price growth rate in the UK has generally slowed since the beginning of 2016, mainly due to a slowdown in the capital over the same period.

Excluding London, rent prices rose by an average of 1.5% in the 12 months to February, which is unchanged on January. In the capital, the growth rate stood at 0.2% in February – up from 0.1% in the previous month.

In the February 2019 Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS), tenant demand appeared to rise modestly on a monthly basis. New landlord instructions, on the other hand, continue to dwindle, remaining in negative territory for the 29th consecutive month.

ARLA Propertymark (the Association of Residential Letting Agents) reported in its Private Rented Sector Report for January that the number of tenants experiencing rent price rises increased for the first time since September 2018. The supply of rental properties and demand from prospective tenants both rose, also.

These supply and demand pressures can take time to feed into the IPHRP, which reflects the growth rate for all private rental properties, rather than just newly-advertised homes.

Focusing on the long-term trend, between January 2015-February 2019, private rent prices in the UK rose by an average of 7.2%.

Rent Price Growth Rate Strengthens, According to Official Data

By country

The annual growth rate in Wales in February was 1.1%, which is up from 0.9% in January. Wales’ annual growth has been strengthening since October 2018.

In Scotland, rent prices rose by an average of 0.7% in the 12 months to February – unchanged on the previous month. The weaker growth rate since 2016 north of the border may be down to stronger supply and weaker demand.

English private rents increased by an average of 1.1% in the year to February, which is unchanged since December 2018. When London is excluded, rents rose by 1.6% on an annual basis. 

The annual growth rate in Northern Ireland (2.0%) in December 2018 is higher than the other countries of the UK. In fact, rent price growth in Northern Ireland remained broadly consistent around 2% throughout last year. This is the latest data available for Northern Ireland; the next will be released in June 2019.

All UK countries have experienced rent price growth since 2015. Since January 2015, rent prices in England have increased more than those in Wales, Scotland and Northern Ireland.

By region

The growth rate for rent prices in London stood at an average of 0.2% in the year to February. The September 2018 Residential Market Survey from the RICS shows that tenant demand has staged a sustained recovery in the capital over recent months, increasingly outstripping supply. However, it notes that rent prices are still expected to see little change in the near-term.

The greatest annual rent price growth rate of the English regions in February was recorded in the East Midlands (2.4%), which is unchanged on January. Yorkshire and the Humber (1.8%) followed – down from 1.9% – along with the West Midlands (1.8%) – unchanged on the previous month.

The lowest annual rent price increase was in London (0.2%), followed by the North East (0.3%), which is down from 0.4% in January.

London Boasts the Strongest Tenant Demand in the Country

Published On: March 22, 2019 at 9:58 am

Author:

Categories: Lettings News

Tags: ,,

Sheffield Landlords

Following a recent report that tenancy renewals are running at a huge 90% in some parts of the capital, Agency Express has found that London boasted the strongest levels of tenant demand in the country during February.

In its latest Property Activity Index, Agency Express revealed that the number of properties let in London increased by 16.5% on a monthly basis in February, which marks the only region to record an increase in figures last month.

Following a buoyant start to the year, the index shows a slowdown in activity in the UK lettings market in February.

Nationally, the number of new property listings to let dropped by 16% month-on-month, while the amount of properties let was down by 5%. Although February’s data is affected by January’s spike, Agency Express’ annual statistics do show a greater level of activity in the same month of 2018.

Looking across the individual regions included in the index, all 12 recorded declines in the number of new listings, while just one region – London – saw growth in the amount of properties let in February.

The following regions experienced the smallest decreases in the month:

Property listings

  • Scotland: -0.7%
  • Central England: -5.7%
  • Yorkshire and the Humber: -9.1%
  • North East: -12.5%
  • London: -13.7%

Properties let

  • Central England: -0.7%
  • South East: -1.1%
  • Yorkshire and the Humber: -2.2%
  • West Midlands: -4.5%
  • Wales: -6.5%

The greatest decline in February’s index was recorded in Wales. Again, following a strong start to the year, the number of new property listings fell by 34.5% and, over a three-month rolling period, by 11.8%. Looking back at Agency Express’ historical data, this drop in activity is the region’s largest for the month of February. 

Stephen Watson, the Managing Director of Agency Express, comments on the findings: “The Property Activity Index historically shows us a slowdown in activity throughout February. This month has remained relatively true to trend, but, overall, we are seeing a slower market compared to 12 months previous.”

Landlords Could be Charged for Discrimination under Right to Rent

Published On: March 22, 2019 at 9:01 am

Author:

Categories: Landlord News

Tags: ,

Private landlords could be charged for discrimination under the Right to Rent scheme, after the High Court ruled that attempting to evict a tenant who does not have the right to rent a property in the UK would breach the Equality Act. 

Right to Rent, which is one of the Government’s flagship immigration policies, has now been branded a farce after the ruling. The High Court concluded that a landlord who seeks to repossess their property when the Home Office tells them that a tenant does not have the right to rent is breaching equalities law.

Under the scheme, landlords are responsible for checking the immigration status of all prospective tenants, with the risk of prosecution if they know or have reasonable cause to believe that someone who does not have the right to rent in the UK occupies the property. Theresa May, as Home Secretary, introduced Right to Rent as a key plank of the Government’s hostile environment for illegal immigrants.

If the Home Office identifies a tenant without the right to rent, it will issue a formal notice to the landlord, who then uses this as the basis to repossess their property. In a judgement issued by the High Court, it has ruled that this breaches the Equality Act, on the basis that it amounts to “direct discrimination on the basis of nationality”.

While the wording of the Act means that the Home Secretary cannot be prosecuted for this, landlords who are forced to comply with the notice can be charged under the law, as well as being at risk of a civil claim being made against them.

This ruling gives tenants who may not legally be allowed to be in the country a defence against any claim to evict them from a property, and entitles them to an injunction to prevent eviction and possibly a further claim for damages.

A further ruling, earlier this month, by the High Court concluded that the scheme breached the European Convention on Human Rights, on the basis that it led to discrimination against non-UK nationals with the right to rent and British ethnic minorities. The judge concluded that Right to Rent caused landlords to discriminate, where otherwise they would not, describing such discrimination as being “logical and wholly predictable” when faced with potential sanctions and penalties for getting things wrong.

The Residential Landlords Association (RLA) is writing to the Home Office to seek urgent changes to address what it is describing as a farcical situation.

David Smith, the Policy Director of the RLA, says: “This new ruling makes the Right to Rent a farce. To put landlords in a position where acting on a direct instruction provided by the Home Office leaves them open to breaching equality law cannot be tolerated. 

“With the High Court having ruled that discrimination is baked into the Right to Rent scheme, it is time for the policy to be scrapped altogether.”