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Dampening rental housing investment will fuel supply crisis, says NRLA

Published On: May 6, 2022 at 8:17 am

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Dampening rental housing investment will fuel supply crisis, says NRLA

Data from the National Residential Landlords Association (NRLA) shows that demand for rental property is at a record high.

The association warns that government efforts to dampen investment in rental housing are fuelling a supply crisis, hiking rents and making homeownership more difficult to afford.

According to new data from research consultancy BVA/BDRC for the NRLA, 62% of private landlords in England and Wales reported a record high tenant demand in the first quarter of 2022.

Over the same quarter, more landlords sold property (11%) than purchased new property (8%).

Government data shows that private rents across the UK increased by 2.4% during the first quarter of 2022. This was the largest annual growth in rents since July 2016, although still much less than inflation, which stood at 6.2% over the same period.

The NRLA is calling on the Government to scrap the Stamp Duty levy on the purchase of additional properties. According to Capital Economics, removing it would see almost 900,000 new private rented homes made available across the UK over the next ten years.

Ben Beadle, Chief Executive of the NRLA, comments: “Ministers have been repeatedly warned of the damage that would be caused if they continued to attack the private rented sector.

“The supply crisis is completely counterproductive to the Government’s mission to turn renters into homeowners. By suppressing supply whilst demand increases, with rents going up as a result, they continue to make it harder for tenants to save for a home of their own.

“The Chancellor needs to wake up to a crisis of the Government’s own making, scrap the tax on new homes to rent and review other measures which add to a landlord’s costs.”

Risk of increase in people forced to sleep rough, as cost of living and rent prices rise

Published On: May 5, 2022 at 9:16 am

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Risk of increase in people forced to sleep rough, as cost of living and rent prices rise

A decrease in rough sleeping has been recorded by the Combined Homelessness and Information Network (CHAIN).

The figures show 2,714 people were forced to sleep rough in London from January to March 2022, a 10% decrease compared with the same time last year.

The figures also reveal 363 people were seen ‘living on the streets’ (long-term rough sleeping). This is a 26% drop on the previous three months but 15% higher than the same time last year.

The data covers the first three months of 2022, when emergency winter accommodation was in place for part of this period in many areas across the capital, including hotel accommodation provided by Crisis.

With the increasing cost of living piling pressure on households, Crisis is concerned there is a risk that more people will be forced to sleep rough over the coming months.

Matt Downie, Chief Executive of Crisis, comments: “It’s pleasing to see a drop in the number of people forced to sleep on our streets. But with thousands still having to endure the brutality of bedding down night after night, and a rise in people living on the streets, we still have a long way to go before we can take our foot off the pedal.

“With rents rising across much of the country and the cost of living soaring for most, we know that budgets are being squeezed from all sides and this pressure is threatening to tip more and more people into homelessness over the coming months.

“Long-term support is desperately needed so more people aren’t forced into living on the streets. The Government must develop a strong and bold strategy to address the chronic shortage of affordable housing, so people can have a safe and secure place to live. Investing in Housing First is also vital to make sure people with complex support needs get the help and a home they need to leave homelessness behind. Only this decisive action will end rough sleeping for good.”

Councils called on to take action against rented homes that fail MEES

Published On: May 4, 2022 at 8:46 am

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Categories: Landlord News,Law News,Property News

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Councils called on to take action against rented homes that fail MEES

Ahead of Thursday’s elections, Generation Rent is calling on councils to identify local private rented homes that fail Minimum Energy Efficiency Standards (MEES).

It says councils should take action to bring properties up to standard, while giving tenants protection from eviction and a chance to claim back rent.

Generation Rent analysed EPC data to assess the scale of the problem in each region in England. A total of 201,000 homes recorded as private rented are classed as F on their EPCs and 62,000 are classed as G, out of a total of 4,265,000 with an EPC.

Recent research by JLL found that, following the increase in the energy price cap, the average energy bill for a Band G property is now £4,950 per year and £3,587 for a Band F home. For a home at the legal minimum of Band E, the average bill is £2,687. Upgrading a Band F home to the legal minimum would therefore save the average tenant £900 per year and upgrading a Band G home is worth £2,263. Across all households affected, landlords’ failure to comply with the law is worth £321m per year.

Since April 2020, under MEES, landlords are no longer allowed to let out a home with an EPC band of less than E, unless it has an exemption. As of 1st July 2020, just 9,269 private rented properties had an exemption from MEES.

Local authorities are responsible for enforcing MEES. Generation Rent made Freedom of Information requests to councils accounting for two thirds of England’s private renter population. Of the 101 councils that provided information about their MEES enforcement work in 2020-21, just 13 issued enforcement notices, a total of 359.

Barnsley Council issued the most notices (181), followed by Bristol (35) and Thanet (30).

Landlords failing MEES are only liable for a maximum fine of £5,000, and their tenants are not protected from eviction if they complain or eligible to claim money back to compensate for higher bills.

However, Generation Rent points out that councils enforcing MEES can usually serve non-compliant landlords with improvement notices on the basis that the home is too cold to be considered safe. This protects tenants from a retaliatory eviction for six months and gives them the basis to claim back rent through a Rent Repayment Order if the landlord fails to make the necessary improvements.

As voters elect councillors on 5th May, Generation Rent is calling on councils to commit to using publicly accessible data on EPCs to identify tenants in cold homes and all their enforcement powers, including improvement notices, to protect them.

Alicia Kennedy, Director of Generation Rent, comments: “A quarter of a million households are in homes too cold to be legal and with energy bills through the roof, they are paying hundreds, if not thousands, of pounds more than they should as a result. People will miss meals, get ill, and fall into arrears as a result of their landlord’s negligence. “Councils have the data and the powers they need to protect the most vulnerable tenants – but at the moment most are not using them. The government needs to act much faster to ensure that private landlords insulate their properties, including by reforming tenancies to give tenants more confidence to exercise their rights.”

Rise in number of landlords seeking to recover rental debt

Published On: May 3, 2022 at 8:56 am

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SpareRoom study shows most affordable places to rent in the UK

Eviction specialists Landlord Action has had a sharp rise in landlords requesting to use their debt recovery service.

Instructions for the last year, April 2021 to March 2022, were up 180% compared to the pre-pandemic year, April 2019 to March 2020.

According to Landlord Action, the restrictions placed on landlords over the last two years have led to the value of rent arrears becoming higher than ever.

Responding to the English Housing Survey 2020-21, 4% of private renters reported being in rent arrears.  With an estimated 13 million people in the UK renting from a private landlord, this suggests approximately 52,000 were in rent arrears between 2020 and 2021.

Landlord Philip Robinson had tenants who stopped paying rent in October 2019, four months prior to the national lockdown. They remained in situ throughout the pandemic but would not communicate with him or the letting agent. They finally left without surrendering the keys or informing him that they had vacated. Having caused significant damage, Philip decided to pursue the tenants’ arrears through Landlord Action’s debt recovery service. In October 2021, the team recovered £14,950.

Philip Robinson comments: “I have always been very fair and taken my tenants’ personal circumstances into account, but this tenant ran a company which had £250,000 in the bank. They abused the restrictions put in place by the Government which were designed to help those in need.

“The tenants purchased a property, renovated it and managed to pay the mortgage, all whilst living in my property for free. If more tenants like this knew there would be repercussions, such as a County Court Judgement, I believe they would cooperate much earlier in the proceedings.”

Paul Shamplina, founder of Landlord Action, comments: “We currently have hundreds of live debt recovery cases, ranging from a few thousand pounds right up to one where the arrears have reached £200,000. Admittedly, this is an extremely rare case, but what many of our cases have in common is that the tenants had the means to pay. For example, one case is against a practising doctor who owes £42,000.

“If there are substantial arrears and the tenant is employed with a steady level of income, therefore has the means to pay, but has simply stopped paying, it is worth pursuing the money that is legally and rightfully owed to the landlord.

“There are many ways to enforce an outstanding debt such as appointing a High Court Bailiff who can seize goods, apply for a Third-Party Debt Order (freeze bank account) or apply for an order for an attachment of earnings. If a landlord wishes to seize goods on the eviction date this can only be done if a High Court Bailiff is appointed.”

168% increase in people facing eviction, Government figures show

Published On: April 29, 2022 at 11:06 am

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168% increase in people facing eviction, Government figures show

New figures released by the Government show a rise in the number of families and individuals in England facing homelessness.

5,260 people received a Section 21 notice between October and December 2021, an increase of 168% from the same quarter last year.

The data covers the last few months of 2021. However, with the cost of living crisis now impacting struggling families across the country, national charity Crisis is warning today’s figures may mark just the start of growing numbers of people forced into homelessness.

Matt Downie, Crisis Chief Executive, comments: “It’s distressing to see that thousands began the new year facing eviction. Now with living costs spiralling and rents rising across much of the country, we know that many more will be in freefall as the financial burden of trying to keep a roof over their head becomes too much.

“Every day through our services we’re hearing from people forced to go without a decent meal so they can cover their electricity bill, while others are considering more costly pre-payment meters just so they can have a little more control over what spare change they pay out and when.

“To stem a rising tide in homelessness, we need the Government to urgently invest in housing benefit, so it covers the true cost of people’s rents. We also need to see a plan put in place laying out how the Government is going to deliver the genuinely affordable homes we need so that people can cope with any sudden change in financial pressure, and we can finally end homelessness for good.”

Call for rent freeze to ease cost of living crisis

Published On: April 28, 2022 at 2:51 pm

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Call for rent freeze to ease cost of living crisis

Generation Rent has called for a ban on rent increases. It argues that renters struggling with rising energy bills should be protected from higher rents.

With rents rising in the lettings market, the campaign is also calling for a pause on evictions to stop tenants facing homelessness.

The call comes as Rishi Sunak reportedly told the Cabinet that homeowners face increased mortgage payments of £1,000 per year. Generation Rent says renters are bearing the brunt of rising prices. The Office for National Statistics (ONS) revealed that 59% of renters were finding it difficult to pay energy bills in March, compared with 43% of mortgaged home owners.

A third of renters (34%) reported that their rent had increased in the past six months, compared with 19% of mortgaged homeowners saying that repayments had increased.

Renters are in a precarious position, says Generation Rent, with just 38% able to pay an unexpected bill of £850, compared with 61% of mortgaged homeowners.

With renters most exposed to the cost of living crisis, Generation Rent is calling on the government to:

  1. Ban increases in rent for the duration of the cost of living crisis
  2. Suspend the use of Section 21 evictions, where the landlord does not need a reason to evict, and Section 8 Ground 8 evictions, where tenants in more than 2 months of rent arrears cannot challenge an eviction
  3. Unfreeze Local Housing Allowance so benefit claimants can pay the rent – rates are frozen at 2019-20 levels
  4. Restore Discretionary Housing Payment funding to 2020-21 levels, when £180m was available for renters struggling with housing costs
  5. Reinstate the £20 per week Universal Credit uplift
  6. Ban landlords from demanding multiple months’ rent up front – a tactic used to deny benefit claimants a home
  7. Increase funds to clear tenants’ rent arrears from the £65m provided in October 2021

Alicia Kennedy, Director of Generation Rent, comments: “Although interest rates are rising, home owners are able to minimise costs by remortgaging. Renters don’t have the same option: if your landlord thinks they can get a higher rent from a new tenant, there’s not much you can do. If you try to negotiate, your landlord can simply serve a Section 21 no-fault eviction notice.

“With renters so vulnerable to rent hikes and incomes stagnant, this causes impossible choices between paying rent and putting food on the table. Without a suspension of evictions and a rent freeze, the cost of living crisis will lead to spiralling rent arrears and homelessness for thousands of families.”