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Em Morley

Independent Inventories Should Back the Fitness for Habitation Bill, the AIIC Insists

Published On: January 11, 2019 at 9:00 am

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Independent inventories and the clerks that create them should back the upcoming Homes (Fitness for Human Habitation) Bill, according to Danny Zane, the Chair of the Association of Independent Inventory Clerks (AIIC).

Independent inventory reports already cover safety and compliance throughout rental properties.

Renting, in both the social and private sectors, is not fit for purpose, the AIIC claims. It has found that too many tenants live in unsafe conditions. In total, over one million private and social tenancies (home to about 2.5 to three million people, including children) have Category 1 hazards.

According to the 2015/16 English Housing Survey, the number of properties with a Category 1 hazard under the Housing Health and Safety Rating System (HHSRS), which is defined as a “serious and immediate risk to a person’s health and safety”, included:

  • 244,122 social rental homes
  • 794,600 private rental homes

Zane says: “As such, as a profession, we believe this Bill is hugely important for the future of tenancies in the UK, ensuring safety and the protection of both private and social tenants. Furthermore, we believe that we have a significant contribution to make in the implementation and enforcement of this Bill as the sector moves forward.”

At present, inventory clerks function as safety and compliance officers. At the beginning of tenancies, for instance, they:

  • Check that smoke and carbon monoxide detectors are installed where required, and power test them
  • Look for the Gas Safety Certificate and the date of such
  • Check all soft furnishings for the correct labelling
  • Assure that all pull cords meet safety criteria
  • Note any potential trip hazards
  • Note any mould issues in the property

Zane claims: “Accordingly, it is clear that our role, while enabling landlords to protect their investments and the tenancy itself, is an essential part of the safety and compliance procedures for all aspects of tenancies.

Independent Inventories Should Back the Fitness for Habitation Bill, the AIIC Insists

“As such, it would seem that the obvious next step in the rented sector and tenancy legislation would be to make sure impartial inventory reports are complied and agreed with by all parties at the start of the tenancy, and ideally are made mandatory.”

In the meantime, Zane believes that, at the very least, agents must be made to state who has compiled their reports, and be transparent about their relationship with the organisation or person, and/or the property itself.

Unfortunately, the upcoming introduction of the letting agent fee ban has left tenants vulnerable to partial reports that would not stand up in disputes, as the AIIC is now seeing agents making money through seemingly independent inventory companies that are, in reality, not independent and, instead, serve to boost the income of the agent.

Moreover, there is further discussion to be had around transparency aiding tenants’ knowledge of their rights, so that they are aware that inventory reports can be carried out by independent clerks where they may have been organised and carried out by the agent or landlord themselves, and can therefore be far from impartial and legitimate.

As an organisation, the AIIC serves the largest letting agencies in the UK, and therefore believes that it has a powerful role to play in this aspect of housing policy.

If you do not use an independent inventory clerk, then follow our comprehensive guide to compiling reports: https://www.landlordnews.co.uk/guides/a-landlords-guide-to-inventories-and-avoiding-disputes/

LendInvest Partners with Mortgage Brain to bring Loans to Wider Market

Published On: January 10, 2019 at 10:31 am

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LendInvest, a specialist property finance lender, has partnered with mortgage technology expert Mortgage Brain to bring its buy-to-let product to a wider market of intermediaries, as it seeks to continue to expand its distribution panel.

Mortgage Brain’s first and second charge online and desktop sourcing systems – MortgageBrain Anywhere and MortgageBrain Classic – enable brokers to source and access the best deals for their clients from the whole of the market. Its market-leading software systems streamline the sourcing process, allowing lenders to deliver finance to those who need it at speed.

This partnership follows recent changes to LendInvest’s buy-to-let product, in which it dropped its headline five-year fixed rate to 3.60%, with the interest coverage ratio (ICR) being assessed at the product pay rate of 3.60%.

The lender also reduced its product fees to 1% for all standard property and House in Multiple Occupation (HMO) mortgages.

By partnering with Mortgage Brain, LendInvest will now be able to roll out its buy-to-let product to the Mortgage Brain customer base of over 22,000 intermediaries.

Mark Lofthouse, the CEO of Mortgage Brain, comments: “We’re delighted to have completed this partnership with LendInvest. By making its buy-to-let product available, our customers now have an even greater choice, and the added certainty of being able to offer a first-class mortgage advice service that meets the individual needs of their clients.”  

Ian Boden, the Sales Director at LendInvest, adds: “Partnering with a market leader in optimising the loan sourcing process, like Mortgage Brain, marries directly with our goals as a lender.

“Internally, our team works continuously to alleviate pain-points in the application process, and we strongly believe this should start at the point of search. As we ramp up the distribution of our buy-to-let product one year on, Mortgage Brain’s extensive and diverse member base will be a true asset.”

NLA Disappointed in Government for not Addressing Major Ruling

Published On: January 10, 2019 at 10:02 am

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The National Landlords Association (NLA) is disappointed in the Government’s decision to not address a major ruling that is of crucial importance to all landlords of assured shorthold tenants.

A recent county court decision in the Caridon Property Ltd v. Monty Shooltz case ruled that a landlord who had failed to issue a Gas Safety Certificate to an assured shorthold tenant prior to moving in could never rely on a Section 21 notice as a means of ending the tenancy and recovering possession of their property.

According to the ruling, which applies a strict interpretation to the wording of the original Gas Safety Regulations, issuing a Gas Safety Certificate after the tenancy has begun would not be sufficient for the landlord to meet the requirements of the Deregulation Act 2015, which only applies in England.

But, despite lobbying the Government for change, the NLA says that it has now been told by the Ministry of Housing, Communities and Local Government (MHCLG) that it does not intend to address the Monty Shooltz ruling to help the thousands of landlords who may have inadvertently granted assured tenancies, instead of the Assured Shorthold Tenancies that they meant to.

Instead, the MHCLG says that it will update the guidance available to landlords on the gov.uk website, to ensure that they are certain of their legal responsibilities.

The CEO of the NLA, Richard Lambert, says: “Having pressed the Government to respond to this judgement for nearly a year, their answer seems to be, ‘we’re not that bothered’.

“The Ministry clearly doesn’t understand the impact it is having. The NLA Advice Line is taking more and more calls from landlords who thought they had complied with the law, and now find themselves facing a disproportionate penalty for an administrative error. We cannot believe this is what Parliament actually intended.”

He continues: “The NLA recognises the vital importance of ensuring landlords arrange an annual gas safety check with a Gas Safe engineer. But we do not support the de facto introduction of assured tenancies because landlords cannot rectify an unwitting error made before a tenancy begins.

“We have no intention of letting this rest and will continue to lobby for change.”

Permanent Tenancies Should be the Norm, Insists Shelter

Published On: January 10, 2019 at 9:00 am

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Permanent tenancies should become the legal minimum norm for all private tenants, according to a new report by Shelter.

The housing charity has put forth its recommendations for the social and private rental sectors in its Building for our Future: A Vision for Social Housing report, which includes 23 suggestions.

The social housing commission set up by Shelter also wants to see some form of rent control, alongside a new consumer regulator – similar to the Financial Conduct Authority – that would register, monitor and enforce social and private landlords with over 25 properties each.

The report states: “Social renters are more protected from eviction, but they face stigma and indifference – and their complaints go nowhere.

“Too many private renters are stuck in insecure, unaffordable tenancies, too frightened to complain about poor conditions or rent increases for fear of eviction.”

It insists: “Unless we act now, we face a future in which a generation of young families will be trapped renting privately for their whole lives, where more and more people will grow old in private rentals, where billions more in welfare costs will be paid to private landlords, and hundreds of thousands more people will be forced into homelessness.”

Its recommendations include building 3.1m more social homes over a 20-year period, at a cost of £10.7 billion per year. It believes that two-thirds of this cost could be earned through housing benefit savings and extra tax revenue, and that the programme would pay for itself after 39 years.

Shelter believes that new social housing should be part of tenure-blind mixed developments.

The charity set up the commission after the Grenfell Tower tragedy in 2017. The commission gathered views from 31,000 people, and found: “By a very long way, most people thought the biggest issue facing social housing is that there is not enough of it.”

The Secretary of State for Housing, Communities and Local Government, James Brokenshire, says: “Providing quality and fair social housing is a priority for this Government.”

The reforms that Shelter would like to see for private rentals include:

  • All private landlords with over 25 properties would have to register with a new consumer regulator
  • This body would set consumer standards for all private rental housing
  • The Government should increase resources for local enforcement to tackle bad landlords and poor housing conditions, in line with the growth in the number of private rental households
  • The Government should end Section 21 notices – so-called no fault evictions – so that permanent tenancies are the legal minimum for all private tenants
  • Private tenants should be protected from above-market rent price rises, and the Government should make available information on rents for different property types at local government ward level

Shelter’s full campaign can be viewed online here.

Do you agree that permanent tenancies in the private rental sector should be the norm?

Are Property MOTs the Next Step for Rental Regulation?

Published On: January 9, 2019 at 10:30 am

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The introduction of MOT-style certificates would represent the next logical step towards raising overall standards in the private rental sector, according to No Letting Go, a provider of inventory services.

The suggestion for MOT reports of rental properties was put forward as part of a major review of the private rental sector conducted by Dr. Julie Rugg and David Rhodes, titled The Evolving Private Rented Sector: Its Contribution and Potential.

MOT-style reports would indicate whether a property is fit for letting and the system would ensure that all private rental housing would be required to meet a minimum standard.

It has already been confirmed that the Government will review private rental sector health and safety regulations in 2019. And the Chief Executive of industry trade body ARLA Propertymark (the Association of Residential Letting Agents), David Cox, has already called for MOT reports to be introduced as part of this review, in order to make the sector’s health and safety regulations less complicated and more practical.

Furthermore, the concept of MOT-style reports for the private rental sector also fully suits the Homes (Fitness for Human Habitation) Bill, which is set to become law this spring. The Bill will require homes to be fit for human habitation before being let, with the aim of reducing problems such as damp, mould and unsafe living conditions.

The legislation will also give tenants powers to take legal action against their landlord in the court for breach of contract if their property is not fit for human habitation.

Nick Lyons, the CEO and Founder of No Letting Go, says: “Property MOT reports are a fantastic idea. As we can see from the work the Government is doing around the private rental sector, this innovation would fit squarely with their aims and mark another step towards raising the standard of privately rented properties.

Are Property MOTs the Next Step for Rental Regulation?

“A uniform and easy-to-understand system would provide clarity for landlords and tenants, helping to eradicate poorly maintained homes with health and safety issues from the private rental sector.”

Lyons adds that property MOTs would also complement all-important inventory reports.

“An MOT report, ensuring a property meets a minimum standard, alongside an independently and professionally compiled inventory, would ensure that everything about a property’s condition and contents is suitably documented at the start of a tenancy,” he explains. “This would protect all sides of the rental transaction, and reduce the chances of either landlords or tenants being unfairly left out of pocket at the end of a contract.”

As more people rent for longer, expectations of private rental housing are on the rise, Lyons adds.

“Landlords should no longer be able to get away with letting shabby properties to tenants with no other choice,” he insists. “The vast majority of tenants are now looking for their landlords to provide accommodation that they can treat as their home, potentially for the long-term, and the Government can help to make this a reality by ensuring that all properties are let to a minimum standard.”

Paragon Refreshes its Range for Portfolio and Non-Portfolio Landlords

Published On: January 9, 2019 at 10:00 am

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Paragon, a specialist bank and buy-to-let mortgage lender, is ringing in the New Year with a refreshed range of products for portfolio and non-portfolio landlords.

Highlights of the new range include five-year fixed rate mortgages for portfolio landlords, at up to 75% loan-to-value (LTV), with no product fee, no application fee, a free mortgage valuation and £250 cashback. Portfolio landlords are defined as those with four or more mortgaged properties.

The new five-year mortgage products include an initial interest rate of 3.80% for portfolio landlords looking to purchase or remortgage single, self-contained units (SSCs), and 3.90% for those seeking finance for Houses in Multiple Occupation (HMOs) and multi-unit blocks (MUBs).

All products are available to individual landlords, as well as those operating through limited companies and limited liability partnerships, and include an interest coverage ratio (ICR) starting from 4.00%.

The Prudential Regulation Authority (PRA) first introduced minimum underwriting standards for portfolio landlords in October 2017, and, since then, Paragon has seen an increasing proportion of its new business come from landlords with larger and more complex property portfolios.

Complex completions increased from 65% to 79% of new business at Paragon last year, reflecting the expertise that the company has in this segment of the buy-to-let market.

John Heron, the Director of Mortgages at Paragon, says:The cost certainty that a longer-term fix provides will be an appealing prospect to many as the Brexit process continues into 2019 and landlord taxation takes the next step up.

“By adding products into our range that remove many of the upfront costs associated with arranging finance, we aim to give landlords more flexibility to decide the best route forward for their business.”

Landlords, are you enticed by this refreshed range to purchase more buy-to-let properties, or even to remortgage your current portfolio? A fixed rate deal may be a wise option in such uncertain political times.