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Landlords Welcome Funding to Support Homeless People Into Rented Housing

Published On: October 11, 2018 at 9:01 am

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Thousands of vulnerable people facing homelessness are set to benefit from the launch of a £20 million scheme to help them secure a privately rented home.

The Private Rented Sector Access Fund, launching today on World Homeless Day, 10th October 2018 by Communities Secretary, Rt Hon James Brokenshire MP, is a dedicated fund designed to help up to 9,000 people who are or at risk of becoming homeless to secure their own home.

A key part of the government’s expert-backed Rough Sleeping Strategy World Homeless Day, the fund will be used to either help set up locally-led schemes or expand those currently in use. These schemes will be tailored to match the needs of each local area’s residents and landlords.

This could involve councils providing financial support to help those to access or maintain their tenancies, such as paying deposits for the tenancy or rent payments. Alternatively, some schemes may involve the council managing the property on the landlord’s behalf.

Communities Secretary, the Rt Hon James Brokenshire commented: “It is vital we give people facing homelessness a route out of it and a chance to rebuild their lives. The private rented sector has an important role in this.”

This £20 million fund will allow councils to put in place vital new schemes so that those at risk will have the support to secure their own tenancy.

It is just one part of the wide-ranging work we are doing to help tackle all forms of homelessness, including our Rough Sleeping Strategy as we ensure more homes are made available for those in need.
The fund is modelled on evidence provided from the successful programme run by leading homelessness charity Crisis which supported schemes to help homeless people into thousands of private rental tenancies.

The new fund’s launch comes as patients, prisoners and jobseekers at risk of homelessness must now be referred to their local housing authority under key legislation. The duty to refer, a core part of the Homelessness Reduction Act, came into force this month.

It places new responsibilities on key public bodies such as prisons, Job centres and NHS Trusts to ensure those at risk get the help they need.

The Rough Sleeping Strategy was launch in August this year and set out a number of schemes designed to support those sleeping on Britain’s streets rapidly into accommodation.

The minimum tenancy or existing tenancy supported by the schemes will be a period of 12 months.

Bidding for the schemes is open to all local councils, who are permitted to submit separate bids.

The competition for bids runs for 6 weeks from 10th October.

Up to £5 million in funding is available for bids for the 2018 to 2019 financial year with £15 million available for the 2019 to 2020 financial year.

The Crisis Private Rented Sector Access Programme ran from 2010 until 2014, backed by £11 million in funding from the government. The programme supported over 153 schemes across the sector, creating 8,000 tenancies over 4 years. A total of 90% of these schemes created lasted beyond 6 months.

Responding to the announcement of that the Government is formally launching its fund to support councils to house those who are or are at risk of becoming homeless in private rented housing, David Smith, Policy Director for the Residential Landlords Association said:

“With over one million households waiting for a social rented home, increasing numbers of councils are now turning to the private rented sector to provide homes for the homeless.

“We strongly welcome the formal launch of the Government’s access fund, as announced in the Budget last year and campaigned for by the RLA and Crisis. Homeless tenants face the most difficult financial pressures which this funding could play an important part in addressing, whether it’s support to provide a deposit or ensure rent payments are made.

“Such funding however needs to be matched by an ambitious programme to see more homes of every tenure developed. This includes homes for private rent.”

 

 

Landlords Languishing on Standard Variable Rates Could Halve Monthly Mortgage Outgoings

Published On: October 11, 2018 at 8:11 am

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Landlords have been welcoming the new guidance for councils on the minimum room size regulations for rented homes.

Landlords on standard variable BTL (buy-to-let) rates are paying typically £27 more per month for their mortgages than at the start of the year, according to research from online mortgage broker, Property Master, the digital start up that uses algorithms to match the requirements of individual private landlords against the entire buy-to-let mortgage market. Switching to a fixed rate mortgage could save them between £218 and £352 per month.

According to Property Master’s Mortgage Tracker research the monthly cost of an average BTL Standard Variable Mortgage rate for a typical sum of £150,000 rose from £620 in September to £629 in October. This follows the increase in the bank base rate in August when rates rose above 0.5% for the first time in a decade. The year on year rise is £27 – from £602 in January to £629 now.

Whilst some fixed rate mortgage rates have crept up since the start of the year others have fallen meaning there are good deals out there to be had by landlords looking to refinance.

The Property Master Mortgage Tracker tracks a range of buy-to-let mortgages for an interest only loan of £150,000. The rates and costs recorded include product and application fees. Deals from 18 of some of the biggest lenders in the buy-to-let market including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise were tracked.

Angus Stewart, Property Master’s Chief Executive, commented: “Obviously the increase in bank base rates has affected Standard Variable Rates the most but it does appear the situation is more mixed amongst fixed rate loans. Whilst some have crept up others such as the more popular fixed rate five-year loans have fallen back slightly since last month.”

He continued: “Landlords look to be benefiting from a surge in competition amongst lenders particularly as those lenders fear that a raft of recent Government measures will reduce the size of the private rented sector. Remortgaging figures look very healthy but the number of new mortgages taken out by landlords is falling. The good news is there are over 1,000 fixed rate mortgages alone on offer currently for landlords so shopping around is essential.”

Property Master was launched almost 18 months ago and aims to shake up the buy-to-let mortgage market currently served by around 12,000 mortgage brokers. It has already attracted financial backing from a broad range of private investors including a minority stake being taken by LSL Property Services, whose estate and letting agency brands include Your Move and Reeds Rains.

Property Master has automated what was a manual, complex process to provide landlords with a free easy to use mortgage search tool which provides a mortgage quote that is pre-screened against each lender’s specific and changing criteria. Over 25,000 landlords have already tried the Property Master service and a typical remortgage saving is around £1,800.

Government Changes Confusing Millions of Tenants

Published On: October 10, 2018 at 9:34 am

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More than half of the 12 million tenants across the country don’t actually understand their rights or the new laws the government has brought in to help them, according to a new study.

The research from online letting agent MakeUrMove has revealed tenants struggle to get their heads around some of the most common pieces of legislation associated with property rental.

Worryingly, the data shows 85 % of tenants don’t understand the upcoming tenant fees ban, despite widespread coverage of the impending policy.

The survey also revealed that 64 % of tenants don’t understand the costs they have to pay for referencing checks, highlighting the need for greater clarity in the industry.

Even more alarmingly, 41 percent of tenants said they don’t understand the Deposit Protection Scheme, with 32 percent also not knowing their rights for getting their deposit back, meaning tenants could be losing out on nearly £700 at the end of their tenancy.

Alexandra Morris, managing director of MakeUrMove, said “While the government is adamant that certain legislations have been brought in to protect tenants, the reality is it’s leading to additional confusion among tenants, many of whom already don’t understand their current position. The fact that such a high percentage of tenants still don’t understand the implications of the impending tenant fees ban, despite it potentially coming into effect within the next few months, is particularly worrying.”

Other aspects tenants said they were unsure of included who was responsible for looking after their home’s garden, decorating their rented home 59% undertaking minor replacements 45%  and even cleaning the property 40%.

Alexandra added: “As letting agents, we have a duty to educate both tenants and landlords about their rights and responsibilities, this is something made much more complex by ever-changing regulations.

“The impact of these new regulations and lack of understanding of tenant rights is also making life much harder for landlords, particularly the accidental and smaller landlords that make up a large proportion of the private rented sector. They regularly have to seek advice when they and their tenants don’t understand requirements, and they are being forced to pass on their increased costs to tenants through rent rises.

“The UK is experiencing market failure in housing and because of a rush to try to fix it, with piecemeal and ill-thought-out policy changes rather than a whole of market strategy, tenants have been left confused and bearing the brunt of the impact. To truly give every tenant a good home, the private rental process needs simplifying and professionalising, so it works for everyone, and to ensure both tenants and landlords understand their roles and responsibilities.”

EU Citizens Could Face Repeat of Windrush Scandal Post-Brexit, Says RLA

Published On: October 10, 2018 at 9:07 am

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EU citizens living in the UK are at risk of facing some of the same difficulties caused for the Windrush generation by a lack of legal certainty around their status after Brexit, according to the Residential Landlords Association (RLA).

The RLA has written to the Home Secretary, Sajid Javid, demanding that EU citizens are provided with a hard copy document to prove their status to avoid confusion over their Right to Rent in the UK post-Brexit.

The association, which has joined forces with campaign group ‘the3million’, a grassroots movement set up to give a voice to the three million EU citizens living in the UK, has long maintained that the policy could lead to indirect discrimination, with landlords, forced to act as what it describes as ‘border police’, likely to play it safe when it comes to renting out their homes, especially in light of the uncertainty surrounding Brexit.

Research by the RLA’s research division PEARL last year found that, as a result of the Right to Rent policy, 42% of landlords are now less likely to rent to someone without a British passport for fear of prosecution for getting things wrong.

The letter was signed by RLA Policy Director, David Smith and Nicolas Hatton, Chief Executive of the 3 million.

It reads: “Without issuing a clear and understandable hard copy document to those whose rights would be protected, there is a very real danger of a repeat of the difficulties caused for many in the Windrush generation who were in the country legally but unable to easily prove it.

“Such a document must be issued now so that, as tenancies come up for renewal between now and next March, landlords can be confident that they can continue to let to EU citizens, even in the event of a no-deal Brexit.”

It continues: “Without issuing a clear and understandable hard copy document to those whose rights would be protected, there is a very real danger of a repeat of the difficulties caused for many in the Windrush Generation who were in the country legally but unable to easily prove it.

“Such a document must be issued now so that, as tenancies come up for renewal between now and next March, landlords can be confident that they can continue to let to EU citizens, even in the event of a no deal Brexit.”

New Landlords Association Urges Chancellor to Reverse BTL Tax Changes

Published On: October 10, 2018 at 8:14 am

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Philip Hammond is coming under increasing pressure to reverse draconian tax changes applying to buy-to-let landlords.

A number of landlords have been left with no alternative but to evict tenants and sell properties en masse due to the phasing out of mortgage interest relief and scrapping of the ‘wear and tear’ allowance, while the introduction of the 3% stamp duty surcharge has deterred many landlords from adding to their existing property portfolios.

Now the newly formed National Landlords Alliance has written to the Chancellor demanding various tax changes.

The landlord’s association, which has been set-up by Larry Sweeney, a landlord based in Southport, wants to see an amendment to Section 24, an immediate council tax holiday of five years to assist first-time buyers, paid for by council efficiencies, along with a reduction or scrapping of capital gains tax for landlords who sell to tenants.

Sweeney wrote: “We also pointed out to Chancellor Hammond that the PRS is not happy with this so-called Conservative government, and Labour’s proposals for longer tenancies and rent controls are all we have left to fear.

“Perhaps not fear, as these proposals will finally wreck the market and eventually sanity must prevail.

“Let us see if Central government listen.”

Sweeney, who has considered the idea of setting up a new National Landlords association for the past 18 months, commented: “We all know how frustrated and sickened the community is with the other main associations failing to aggressively fight our corner and instead assist the councils implementing their rotten Selective licensing schemes. Enough is enough.

“We could talk forever, but it is now time for action. I have held off taking this leap in the hope that somebody else would take up the baton.”

Sweeney says that he is prepared to act as CEO without salary initially to get the organisation up and running.

Croydon Council Takes Stand Against Homelessness by Backing end to No Fault Evictions

Published On: October 9, 2018 at 10:11 am

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Croydon has become the first council in the country to call for the abolition of a law that allows private landlords to evict tenants without needing a reason.

The south London council passed a motion yesterday evening supporting the campaign to abolish Section 21 of the 1988 Housing Act. Croydon becomes the first council formally to back the End Unfair Evictions campaign: a coalition between Generation Rent, the London Renters Union, ACORN and the New Economics Foundation that is calling the government to abolish ‘no-fault evictions’ in England and introduce the secure, open-ended tenancies that are now standard in Scotland. Other councils are expected to follow suit this autumn.

Responding to the proposal from the Onward think tank for landlords to get incentives to sell to their tenants, Nick Ballard, National Organiser of ACORN and spokesperson for the End Unfair Evictions campaign, said:”If a tenant wants to buy out their landlord and has the savings to do so then that’s great for them. But the reality is most renters have very little in savings – if their landlord wants to sell then they will be evicted with no ability to appeal. Selling up is already the most common reason for private tenants to lose their home, so if the government wants to make renting more secure then it must protect tenants from unfair evictions. That means abolishing Section 21, the law that allows landlords to evict without needing a reason.”

Section 21 is the leading cause of homelessness, with 216 households per week made homeless nationally through no-fault evictions.

Placing homeless families in temporary accommodation costs councils £845m per year nationwide.

Alison Butler, Cabinet Member for Homes & Gateway Services and Deputy Leader of Croydon Council, who proposed the motion, commented: “The biggest cause of homelessness in Croydon is evictions in the private rental sector. With Croydon having lost around 70% of its budget since 2010, we are struggling to deal with the scale of this problem and it is unacceptable that private landlords are able to evict vulnerable tenants so easily, leaving the public sector to pick up the bill.”

Along with contributing to the homelessness crisis, no-fault evictions also allow landlords to kick out tenants who complain about disrepair or other problems: there have been 141,000 revenge evictions since 2015, with nearly half of tenants who complain being asked to leave their homes. Campaigners argue that the threat of revenge evictions make it difficult for councils to enforce better conditions in privately rented homes, and that legislation designed to prevent revenge evictions is not working.

Councillor Niroshan Sirisena, who seconded the motion with his maiden speech, commented: “It is important for councils to help renters whose landlords are failing in their legal duties to maintain safe and decent homes, but our job is made harder by the law that lets landlords kick out tenants who raise complaints. By abolishing Section 21, we will give tenants confidence to complain, make it easier for councils to tackle criminal landlords and thus drive up standards.”

Croydon’s backing for the campaign comes two weeks after John Healey, Shadow Secretary of State for Housing and Planning, announced that the Labour Party would abolish Section 21 when in government. Other organisations backing the call to end no-fault evictions include Children England, London Age UK and the public sector trade union UNISON.

Michael Deas, coordinator of the London Renters Union, part of the End Unfair Evictions campaign, commented:

“We are delighted that Croydon has backed the campaign to end Section 21. During a national homelessness crisis, it cannot be right that landlords are able to kick out their tenants without good reason, causing misery for the people affected and pushing the cost onto taxpayers. The government must respond to the growing calls to end no-fault evictions by introducing secure tenancies and requiring landlords who evict blameless tenants to pay compensation; this would discourage evictions and help families forced to move pay the costs associated with finding a new home.”