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Letting Agent Ordered by Court to Repay Fees Charged to Tenant

Published On: July 5, 2018 at 9:21 am

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Categories: Tenant News

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A recent ruling by Belfast County court has meant that a letting agent has been ordered to repay fees to a tenant – Paul Loughran – that were charged before he started his tenancy.

The judgement of the Court considered the effect of a key piece of legislation, the Commission on the Disposal of Lands (Northern Ireland) Order 1986. It’s anticipated that many tenants could benefit from these judgements, and that there could be positive changes in practices adopted by many local lettings agents going forward.

This news has been welcomed by the Social Democratic and Labour Party (SDLP), and Member of the Legislative Assembly (MLA) for South Belfast, Claire Hanna, comments:

“Agent letting fees have been a major issue in places like South Belfast where there are a large number of tenants renting privately. Many of these tenants have been charged on top of a month’s rent in advance, as well as a security deposit, placing too heavy a burden on individuals and families who are often a captive market.

Fees charged by an agent in Northern Ireland have been repaid to the tenant

Fees charged by an agent in Northern Ireland have been repaid to the tenant

“The SDLP understands the private rented sector is an important part of the housing market, but there must be fairness and transparency in the process to ensure tenants are protected.

“Landlords paying agents to deliver tenancies is part of the routine letting and landlord management process, and not the responsibility of the tenant themselves – these tenant fees effectively allow the agent to be paid twice.

“The amount repayable to tenants in Northern Ireland could amount to many hundreds of thousands of pounds and we will be monitoring developments closely and supporting the organisations campaigning to ensure this practice is stopped.

“The SDLP has long campaigned for regulation of letting agents to make sure that all fees are transparent and clearly stated on websites, promotional material and advertisements.

“As a former private rented sector tenant in the South Belfast myself, and as an MLA dealing with a high volume of housing related cases, I am well aware of the pressure facing tenants, including being asked for additional fees. I would therefore like to take this opportunity to thank Paul Loughran for taking this case.”

The Tenants Fees Bill, in England, is coming into place and will seek to cap deposits at six weeks rent, as well as ban tenants fees charged by letting agents. Read more on the proposed changes here. There’s also a Welsh version, and the effects of this can be found here.

Are Letting Agents Mistreating Tenants? Consumer watchdog Which? Investigates

Published On: July 5, 2018 at 9:02 am

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With consideration of the previous story we covered this week, concerning the case of the tenant who threatened to kill his letting agent, we now investigate why tenants feel the need to retaliate in addition to how letting agents could be contributing negatively to this rage.

According to the #RentRage launched by Which?, tenants are being mistreated by their letting agents. Formulated as a hashtag on the social platform, Twitter, the purpose of #RentRage is to encourage tenants to expose and share their experiences.

The Consumer watchdog Which? undertook undercover research on 30 property viewings, spread across England and Scotland. Whilst there, they assessed the conditions of these properties in addition to asking letting agents specific questions, designed to expose whether they were providing integral information and complying with health and safety rules.

Reportedly, half of these agents were unable to provide evidence of information regarding the property’s boiler. Moreover, only 13% managed to supply the correct details concerning annual servicing rules.

Agents apparently exhibited a better comprehension of where fire alarms were located in the property, with 21 of 30 evaluated as ‘good’ and two rated ‘bad’.

Furthermore, researchers discovered that 20% of the properties visited had issues with damp, with none of the agents able to commit to rectifying the problem. Lastly, agents were also scrutinised for their explanation of holding deposits. Firms allegedly struggled to explain how much these payments would amount to and the process of how they would be refunded.

One Gentleman, interviewed by Which? shared his negative experiences with letting agents whilst searching for his perfect property.

He commented: “I’d had a look at so many flats and they were all very, very poor quality. I mean, in our price range in London, it was really difficult to find something that wasn’t a bathroom full of rust or a bedroom full of mould.

“So, when you finally find a flat that’s right, you’re just really keen. And we’re there on the day, there’s 15 other couples queuing up to look at the same time as us. So, we pressed straight ahead straight to the letting agent. He willingly accepted our money. He said ‘We just need a £500 holding deposit from you.’

“The next day, this image of our new flat came crumbling down, when the letting agent reached back out to us and said three other couples had done the same thing. They held that money over us and made us up our bids, so essentially looking for more money every month from us. Basically, holding that money, getting us into a bidding war, which, you know, is not great practise, especially when we’ve been led to believe we’d secured that flat.”

Alex Neill, Managing Director of Home Products and Services for Which? said: “There are clearly real issues with letting agents showing prospective tenants properties that aren’t up to scratch. It’s unacceptable that all too often agents can’t answer basic questions about important issues like boiler safety and carbon monoxide alarms.

“Tenants need to be given clear and accurate information before moving in to a new place and agents must do more to deliver an acceptable level of service.”

Government Response Addresses MP PRS Queries

Published On: July 5, 2018 at 8:06 am

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A new report from the Government has now been released, addressing the responses to recommendations from MPs to improve the private rented sector (PRS) and its legislation.

It has been suggested that the Government should consider new ways of informing tenants and landlords of any changes to their rights and responsibilities. The Government has accepted this suggestion, and points out that the latest versions of the How to Rent and How to Rent a Safe Homeguides are now available, along with a new guide entitled How to Let.

The Government has also said that it recognises that more could be done to ensure that landlords and tenants are aware of their rights and responsibilities. The report states: “The Government is also committed to providing practical guidance to relevant agencies and local authorities when new legislation is created.”

It is mentioned that possible reforms to the leasehold sector around enfranchisement, commonhold and the right to manage will be looked at, in partnership with the Law Commission, as part of its 13th Programme of Law Reform.

The recommendation to extend the protection offered to tenants from a no-fault Section 21 eviction to longer than the current six-months period has been rejected by the Government. The response states: “We believe the current legislation strikes the right balance between the interests of landlords and tenants and we have no plans to change the legislation in this way.”

“The Committee also recommended that tenants are protected from eviction as soon as they make a complaint, rather than at the point when an improvement notice is issued. We do not accept this recommendation. We acknowledge the concerns raised by the Committee but this recommendation presents practical difficulties of implementation.

“We believe that such a provision is susceptible to abuse since it would simply be the tenant’s word against the landlord as to whether a complaint has been made, and whether their complaint was legitimate. This would be time-consuming to resolve owing to the likely difficulties in providing evidence.”

MPs have called for more detailed proposals in relation to the Homes (Fitness for Human Habitation and Liability for Housing Standards) Bill and the Tenant Fees Bill. The response was that a call for evidence will be published later this year, in order to gather views from the judiciary, landlords and tenants. The plan is for detailed proposals to follow, once the feedback from the call for evidence has been analysed.

The statement was made by MPs that they believe local authorities should have the power to levy more substantial fines, with the intention of doing more to deter rogue landlords. This has also been rejected by the Government, as it is believed that the introduction of civil penalties up to £30,000 and rent repayment orders of up to 12 months introduced in April 2017, along with the rogue landlord and agents database introduced in 2018, should be given more time to take effect.

Further has been said about the Government’s announcement to fund £20m in order to develop the PRS. The report says: “…we are providing £20 million of additional funding for schemes that will enable better access to new tenancies or support in sustaining existing tenancies.

“We are working through options of how best to utilise this funding and will share more information on our plans in due course.”

The Government response to the Housing Communities and Local Government Select Committee Report: Private rented sector is available to view here.

Moneyfacts Data Shows Increase in Buy-to-Let Mortgage Products

Published On: July 4, 2018 at 10:03 am

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Recent data reveals that there has been a record number of first-time landlord mortgage products entering the market. This is despite worries that such products may begin to dwindle, along with demand, due to the recent exodus of landlords from the rental market.

The latest research from Moneyfacts.co.uk shows that the number of deals to first-time landlords has increased considerably by 13% since the start of this year.

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said: “It is great news that first-time landlords have more choice than ever before, increasing by a whopping 339 buy-to-let (BTL) products in just two years. Not only do first-time landlords have more choice, but they have also seen rates fall by 0.36% over the same period.

“Despite market uncertainty, providers are certainly not shying away from offering this risky group deal. Providers know all too well that many borrowers on their mortgage books will be coming to the end of their term and reassessing their deal, so they need to attract new business. As such, they’re enhancing their ranges and offering these extra deals to entice those customers who are new to the market, thereby breathing new life into their mortgage book.

“While multiple regulations and tax changes may have put some borrowers off becoming a landlord, it seems many are undeterred. In fact, it has been reported that Accord has seen the number of applications from aspiring landlords double over the past 12 months.

“This is little surprise when many consider bricks and mortar as a safe bet. With savings rates low, many are looking to get better returns elsewhere. Also, while rents are high and mortgage rates for first-time landlords are still falling, the potential for a decent return is high.

“Potential investors should not get ahead of themselves however. Since September 2017, they face checks and questions about their finances and will need to do their homework to ensure they get the best deal.

“Of course, BTL is not without its risks, and anyone seeking to enter this sector would be wise to seek the advice of a financial adviser to see if this is the best route for them.”

Further Action to Instil Confidence in New Build Sector by Government

Published On: July 4, 2018 at 8:59 am

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According to the Ministry of Housing, Communities and Local Government’s Statistical Release, new build dwelling starts in England were predicted at 39,350 in the most recent quarter. This is a 5% decrease in comparison to the previous three months, in addition to an 8% decrease on a year earlier.

All starts are now 109% above the trough in the March quarter 2009 and 14% below the March quarter 207 peak. All completions are 50% above the trough in the March quarter 2013 and a 9% below the March quarter 2007 increase.

Executive Director of the Intermediary Mortgage Lenders Association (IMLA), Kate Davies, commented:

“The number of new homes still falls short of the volume needed to meet the UK’s chronic housing shortage. Additionally, when looking at the data over an extended period of time – it is clear that quarterly housing starts remain well below pre-financial crash year. The number of housing completions is at its lowest since Q1 2016, despite ongoing policy pledges to mend what the government has itself described as the ‘broken housing market’.

“To have any hope of rebalancing the relationship between housing supply and demand, the government must do more to instil confidence in the new build sector. There has been a commitment to improve access to mortgage finance, and IMLA’s data suggests that first-time buyers are faring better than any other customer group in the market. Nine in ten applicants (90%) via intermediaries secured a mortgage offer in the first quarter of 2018, suggesting that a shortage of products is not the issue.

“However, what is needed are measures to support the full housing spectrum, not just first-time buyers. We’re faced with an increasingly illiquid market, with homeowners now only moving once every 19.2 years, compared with every 7.4 years in 1988, as price inflation and a lack of suitable options mean many ‘steppers’ struggle to find homes to meet their changing needs, such as a growing family or getting older.

“This lack of new homes coming onto the market organically means the new build sector must continue to be supported. As a starting point, we need clarity over the next phase of policies once the current Help to Buy scheme comes to an end in 2021.”

‘Healthy Homes Zones’ Proposal Comes from Labour Party to Improve Housing

Published On: July 4, 2018 at 8:37 am

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The Labour Party has announced plans for ‘Healthy Homes Zones‘ in order to mark the 70th anniversary of the NHS. Its aim is to bring together health and housing, paying specific attention to housing-related health inequalities. This is “in the spirit of Nye Bevan’s original vision”.

Bevan was a Welsh Labour politician who was the Minister for Health from 1945-51. He was responsible for both health and housing policy in the post-war Labour Government.

The Healthy Homes Zones look to focus on areas with the poorest quality housing, and use new funding in an attempt to improve such conditions for renters. There would also be a requirement for a healthy housing strategy for every local area.

This plan has been revealed by Labour, following new research revealing that current arrangements in place for reducing housing related health inequalities are failing.

An exclusive analysis from the Labour Party reveals this current lack of focus in improving the situation of housing and homelessness by Health and Wellbeing Boards. 31% of these boards do not have a specific section on housing or homelessness in their current Health and Wellbeing Strategy. There are also five areas that do not mention housing at all within their strategies. 77 out of 152 do not mention homelessness.

 

Labour’s plan

A consultation will soon be released by the Labour Party, including the proposal for setting up ‘Healthy Homes Zones’.  There will also be a proposal to make funding available from a new £50m Housing and Health Inequalities Fund. The party also wish to elect a national “tsar” in order to report on progress. By introducing a clearer healthy homes standard, they expect a rise in confidence from residents in the standards they should expect. A dedicated health and housing strategy is also to be proposed as a requirement for all local areas, which would be implemented within the first year of a Labour Government.

Jonathan Ashworth MP, Labour’s Shadow Health Secretary, said: “As part of our determination to narrow health inequalities and tackle the wider social determinants of poor health, we must again more closely align health and housing policy.

“Housing related health problems are costing the NHS an estimated £1.4 billion a year and poor housing can ruin people’s lives, so, for Labour in Government, in the spirit of Bevan’s original vision, it will be a priority to combat housing related illness and ensure nobody’s poor home damages their health.”

John Healey, Labour’s Shadow Housing Secretary, said: “Housing and health were joined after the second world war because widespread slum private housing meant unsanitary conditions and poor health for millions. This was Beveridge’s evil of ‘squalor’.

“We’re at risk of recreating this problem today. More people live in private rented housing now than at any time since the 1950s and hundreds of thousands of these homes are unfit to live in. The next Labour Government will act decisively to change this.”