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Rental Property Sales Outstrip Purchases Five-Fold in Scotland

Published On: August 14, 2018 at 9:32 am

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Rental property sales north of the border have outstripped purchases of these homes five-fold in the last three months, following the Scottish Government’s shake-up of the private rental sector.

Research by the National Landlords Association (NLA) found that almost a quarter (24%) of landlords with properties in Scotland have sold over the past three months, with just 5% purchasing in the same period.

The data covers transactions in April-June this year, four months after the Scottish Private Residential Tenancy was introduced in December 2017.

The Scottish Government insists that the reforms provide security, stability and predictability for tenants, as well as appropriate safeguards for landlords, lenders and investors.

However, the NLA warns that its findings, which arrive during festival season in Edinburgh, could affect up to 45,000 landlords, or approximately 67,000 rental properties.

The CEO of the NLA, Richard Lambert, says: “The Scottish Private Residential Tenancy system removes the flexibility of the sector to meet the varied needs of an ever-changing population of renters, in particular, students and those who only seek short-term tenancies, such as during the Edinburgh Festival.

“Because student landlords now have to provide indefinite tenancies, they won’t be able to advertise their properties for the Festival, as they won’t know for certain if they will be free and available by the end of July. If this sets a trend, and artists struggle to find short-term accommodation, the 2018 Edinburgh Festival could be the last to offer such a variety of talent.”

The NLA insists that the level of disinvestment in rental properties is a concern for the Scottish Government, and has urged the UK Parliament to pay close attention, as it currently consults on similar proposals for reforms in England and Wales.

Lambert continues: “The last quarter has seen the highest proportion of landlords selling properties in Scotland in any three-month period since the Government first announced their tenancy reforms in 2016.

“We warned these changes would unnerve investors in private rented homes in Scotland, and it should serve as a clear sign of what to expect if similar reforms are introduced elsewhere in the UK.”

Have you been affected by Scotland’s rental reforms?

We remind all landlords in both Scotland and the rest of the UK to comply with all lettings laws governing the private rental sector, following reports that 150,000 rental homes in Scotland have not received tenancy deposit protection.

What do Short Let Guests Really Want in a London Rental Property?

Published On: August 14, 2018 at 9:01 am

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Short let guests can be a great option for landlords and homeowners alike

A new study by short let specialist, UnderTheDoormat, has revealed what guests look for in a short term rental property in the UK’s capital.

The rise of Airbnb has meant that welcoming short let guests has become a viable option for many homes wanting to earn some extra rental income.

For landlords and other homeowners alike, an already competitive market can feel daunting to negotiate, but the following features will help you to ensure your property is top of the list for those looking for short term accommodation in the capital.

Top ten areas for demand in short term lets

It seems that visitors to the capital most like to stay in central areas of London that they’ve heard of and are familiar with. With plenty to see and do in a relatively small area (boasting many accessible attractions by foot or on the tube), it comes as no surprise that the following areas are most popular for short term lets:

  • South Kensington
  • Mayfair
  • Knightsbridge
  • Covent Garden and Soho
  • Kensington
  • Belgravia
  • Marylebone
  • Bloomsbury
  • Chelsea
  • Notting Hill

When it comes to individual properties however, walking distance to public transport is of paramount importance to short let guests. Homes that are over 10 minutes by foot to a tube station have a significant drop off rate.

Top ten features of popular short let homes

It can be tempting to spruce up an already profitable property in London with added features to attract and secure short let guests – with many landlords installing the latest gadgets and features such as electric blinds, home cinemas and automatic mood lighting. However, the features that are most popular are as follows:

  • Fast Wi-Fi
  • Strong shower pressure
  • Feather-free bedding
  • Lift access (for apartments)
  • Air conditioning
  • Coffee machines
  • Washing machines and tumble dryers
  • Outside space (terrace or garden)
  • Scenic view
  • Hair dryers

By staying in a home owned by locals, as opposed to hotels or hostels, guests can experience a new way to travel and experience the city. Letting out a property short term can help landlords during possible void periods, and it seems that most short let guests prioritise amenities that are likely to make their stay as comfortable as possible, but aren’t unattainable to provide.

‘Broken tenant deposit system is forcing tenants into debt’, says Which?

Published On: August 14, 2018 at 8:04 am

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Number of First Time Buyers at Highest Level Since June 2017

The existing tenant deposit system is broken, and in desperate need of reform. A new report has revealed that one in six tenants are forced to wait for more than four weeks to get their deposit back.

Many tenants need to wait weeks for landlords to return money, plus on top of this, often need to challenge deductions that the letting agency or landlord has placed on their deposit.

Which? has found that 31% had to pay a new security deposit before having their previous one returned.

Due to the waiting times, 43% of tenants have been found to take on debt through credit cards, loans or overdraft, or borrowed money from family and friends, to cover the expense, according to Which?.

43% of tenants have been found to take on debt through credit cards, loans or overdraft

43% of tenants have been found to take on debt through credit cards, loans or overdraft

Deductions from deposits

The most common reason to be charged by at the end of tenancy is cleaning, which was cited by half of those who faced deductions, with eight out of ten of those people thinking those charged were unreasonable.

10% said they were given no reason as to why the deductions were made, and only 33% of tenants who raised a dispute noted that they were satisfied with the deposit scheme.

What can be done?

Alex Neill, Managing Director of home products and services at Which?, commented: “The number of people going into debt to cover the cost of a new deposit is concerning, particularly when you consider that many are forced to wait a significant time to get their previous one back, and could then face deductions that they don’t think are reasonable.

“The findings highlight how the deposit system is crying out for reform so that it is fit for purpose for the record numbers of people who are living in rented accommodation.

“We believe that the government must tackle the issues that we have identified in our report head on to ensure that the rental market delivers for consumers.”

A Ministry of Housing, Communities and Local Government spokesperson said: “We are determined to help the millions of renters in this country by banning unfair letting fees and capping tenancy deposits.

“The new measures in our Tenant Fees Bill will save renters around £240 million a year.

“The current tenancy deposit scheme works well but we have recently set up a working group to see if the system could be improved.”

New HMO Regulations Come into Effect in England on 1st October 2018

Published On: August 13, 2018 at 9:47 am

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The Great Yarmouth Borough Council has been threatened with a judicial review by the Residential Landlords Association (RLA).

The new regulations to bring mandatory licensing to all Houses in Multiple Occupation (HMOs) will soon come into effect. The legislation is likely to effect existing lets that are licensed as HMOs. It will also introduce a new minimum room sizing, as well as meaning some properties that didn’t require an HMO license, will now require one.

Back in June, landlords were urged to prepare for the new legislation, and the 1st of October deadline is fast approaching.

How will an HMO be defined?

The main changes include an altered definition of HMOs under the Housing Act 2004, which is:

  • For licensing properties, an HMO is any property which is occupied by five or more people, forming two or more separate households

This differs from how HMOs were previously defined, which is: ‘An HMO is any property which is occupied by five or more people, forming two or more separate households and comprising three or more stories’.

If you already have an HMO license under the existing definition, this will continue to be valid until it expires (and this is usually five years from the date it was issued).

New HMO regulations mean that more landlords could require a license for their properties

New HMO regulations mean that more landlords could require a license for their properties

Properties licensed after 1st of October

If you currently let an HMO which didn’t previously need a license, but will do after the new legislation comes into place, you’ll need to apply for a license through the local council.

An important exception is if the property is in a purpose-built block of flats comprising three or more units.

Some extra clauses will relate to refuge disposal and storage facilities, with minimum numbers of bins and storage areas expected to be set out by the government.

Minimum room standards

It will be mandatory for an HMO license to include a condition stating the maximum number of persons who may occupy each specific room in a property as sleeping accommodation. As of the 1st of October, landlords will have to stop letting rooms that fall below the nationally prescribed standard.

  • Landlords won’t be able to let rooms to a single adult where the usable floor space is less than 6.51sqm, and 10.22sqm for a room occupied by two adults
  • Rooms under 4.64sqm can’t be used for sleeping accommodation

If not, they will be in breach of their license condition, and could be prosecuted by the local authority or receive a civil penalty under the Housing and Planning Act 2016.

You can read more about the Houses in Multiple Occupation and residential property licensing reform on the Gov.uk website.

Right to Rent Legal Challenge Date set for December

Published On: August 13, 2018 at 9:30 am

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The Right to Rent scheme, which orders landlords to undertake immigration checks on prospective tenants, is to be disputed in the High Court in December.

The Government will be confronted with a challenge to its “hostile environment” policy, after the Joint Council for the Welfare of Immigrants (JCWI) won the right in June to launch a High Court case against the Home Office’s scheme forcing landlords to check the immigration of would-be tenants.

Now, the JCWI has announced that it has attained consent for a full hearing to take place before the High Court on 18th and 19th December 2018.

The organisation commented: “This is going to be the first proper chance a court in the UK will have to determine the legality of the hostile environment Theresa May created that conscripted ordinary people into acting as her border guards.”

It further stated: “We are close to ending this pernicious experiment once and for all.”

The JCWI is seeking to crowdfund the challenge, having so far raised £5,090 of the £15,000 target.

Furthermore, the JCWI’s decision to dispute has received support from various bodies, including the Residential Landlords Association (RLA)

The RLA Policy Director, David Smith, said: “Landlords will welcome the High Court decision to allow a judicial review of the Right to Rent policy, which has put them in the impossible position of acting as untrained border police trying to ascertain who does and who does not have the right to be in the country.

“This has created difficulties for many legitimate tenants, as landlords are forced to play safe and only rent to those with a UK passport.”

He adds: “The announcement is an important step towards overturning a policy which the Government’s own inspectorate had described as having yet to demonstrate its worth.”

The RLA has also recently warned that EU nationals could face eviction from their rental homes following Brexit.

RLA Warns Eviction for EU Nationals from their Rental Homes

Published On: August 13, 2018 at 8:51 am

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According to the Residential Landlords Association (RLA), thousands of EU nationals are at risk of losing their rental properties due to uncertainty about their status post-Brexit.

With Brexit fast approaching, there are a number of immigration anxieties causing huge uncertainty, despite the Home Office currently developing a new user-friendly scheme.

Under the 2014 Immigration Act, all EU nationals automatically have the right to rent property in the UK. Unless the law is changed, this will stand, whether they are currently in the UK or come to the UK subsequent to the UK leaving the EU.

Data from the RLA claims that 66% of EU nationals, excluding those from the Republic of Ireland, live in private rental housing. The organisation is concerned about a lack of detail that a no Brexit deal will have on EU nationals, including their rights to rent property in this country.

The RLA Policy Director, David Smith, said: “Landlords and tenants need urgent clarification from the Government on the rights that EU nationals will have to rent property immediately after the UK leaves the EU, especially in the event of a no deal Brexit.

“Without this, and without a commitment that no changes will be made to the ability of EU citizens to rent property without at least 18 months’ notice, landlords will find themselves unable to decide if tenancies should be renewed and new ones created for EU citizens.”

He insists: “We need clarity as swiftly as possible.”

The RLA is today writing to the Brexit Secretary, Dominic Raab, to raise its concerns over the issue.

Satbir Singh, the Chief Executive of the Joint Council for the Welfare of Immigrants (JCWI), said: “The Government’s refusal to give EU citizens who apply for settled status a document proving their right to live in the UK after Brexit is incomprehensible. Particularly in light of the hostile environment that requires landlords to check their tenant’s immigration status.

“JCWI’s research demonstrates that landlords will not go through complex immigration checks, online forms, or telephone helplines to check up on someone’s status, when they could just rent to someone with a British passport instead.”

He adds: “Landlords cannot be expected to act as border guards, and to ask them to do so is to play with the lives and livelihoods of immigrants and ethnic minorities. It must stop.”

A legal challenge of the Government’s Right to Rent scheme, led by the JCWI, has been set for December.