Landlords with tenants in receipt of Universal Credit are struggling to set up Alternative Payment Arrangements (APAs), Caridon Landlord Solutions reports.
The online Universal Credit landlord portal is closed to new claimants, possibly due to the Department for Work and Pension (DWP) being overwhelmed by the number of new claims. Caridon Landlord Solutions reports that landlords are saying this issue is forcing them to consider serving notice on their tenants.
Last year, the DWP launched an online landlord portal system to allow social rented sector landlords to verify rent and submit managed payment requests online. This meant if a tenant was having difficulty meeting their rent payments, the landlord could request to set up an APA, meaning the housing element of the tenant’s Universal Credit payment would be paid directly to the landlord.
The landlord service provider highlights that the number of people claiming Universal Credit across the UK has risen from 2.9 million in February 2020 to 5.9 million in January 2021. They believe many will be tenants who previously signed up to private tenancies based on their income at the time, but due to COVID-19 are now facing changes to their employment status and finding that Universal Credit simply does not cover their rent.
Sherrelle Collman, Managing Director of Caridon Landlord Solutions, says: “It is an extremely difficult situation. The pressure that DWP must be under due to the rise in claimants is enormous, but when tenants are struggling to meet their rent payments, we know that APAs not only have a significant impact on limiting arrears, they also help to sustain the tenancy. The Government wants landlords to support tenants, but there has to be a middle ground.
“The landlords we are speaking to say they are going back and forth on the phone, only to be told they will be called back by a case manager, then hearing nothing. We’ve seen a 20% uplift in landlords wanting our assistance to set up APAs, and all were at the point where they were considering serving notice to their tenants because they had no other choice.”
Paul Shamplina, founder of Landlord Action, says: “Universal Credit faces heavy criticism from landlords and tenants at the best of times. If landlords are now confronted with yet another barrier to access direct payments, it is inevitable that many more landlords will be encouraged to serve notice on those tenants in receipt of Universal Credit, which goes against the Government’s intentions.
“Clearly the Government needs to provide more resources to facilitate the onboarding and management of the Universal Credit system so that landlords and tenants can work together. Many landlords with tenants who have suddenly had to start claiming Universal Credit are aware that their tenants cannot meet previous rental payments, but if a portion of it is allocated to the landlord then that provides a temporary solution for both parties, helping to sustain the tenancy for longer.”
The National Residential Landlords Association (NRLA) warns that the Chancellor needs to end the tax on new homes in the Budget or risk a supply crisis in the rental housing market.
The NRLA is calling on the Chancellor to scrap the 3% Stamp Duty levy on the purchase of homes to rent where landlords invest in properties that add to the net supply of housing. They state that this should include:
Developing new housing
Converting large properties into affordable units
Changing the use of a property from commercial to residential
Bringing one of the almost 650,000 empty homes in England back into use
This comes as the Royal Institution of Chartered Surveyors has concluded that rents will rise because of demand for properties increasing, whilst new instructions from landlords continue to “dwindle.”
The NRLA highlights that Rightmove revealed asking rents for outside of London increased in Q4 of 2020 for the first time since 2011. This led to a record average of £972 a month. Tim Bannister, Rightmove’s Director of Property Data, commented within their January Rental Trends Tracker report that outside of city centres the available stock is lower than usual for this time of year and demand is higher.
Ben Beadle, Chief Executive of the National Residential Landlords Association said: “To have a tax on developing new housing is completely nonsensical at a time when more is needed. Supporting growth in the private rental market, alongside all other housing types, would provide a significant boost to the economy in the midst of the COVID-19 pandemic. Research published last year suggests that landlords inject over £3.5 billion into local businesses across the UK.”
The NRLA also wants changes to the tax system to encourage the provision of longer-term rental property over short-term holiday lets.
The NRLA says that from April this year the final phase of reducing mortgage interest relief for landlords to the basic rate of income tax will be completed, but this does not apply to furnished holiday lets. They believe this has encouraged the removal of properties from the long-term market for use as short-term holiday lets.
Ben Beadle, comments: “To be taxing long term homes to rent less favourably than holiday lets is simply bizarre. It completely undermines efforts by the Government to encourage the provision of long term, secure housing.
“It is time for the Government to realise that its tax policies have created a shortage of rented housing. This can only mean higher rents and reduced choice for renters. This is not going to do much for the levelling up agenda.”
The January 2021 Nationwide House Price Index shows that annual house price growth has slowed for the first time in six months. This slowdown has occurred just as the end of the Stamp Duty holiday approaches.
Annual house price growth has slowed to 6.4% from 7.3% in December
Prices are down 0.3% month-on-month, after taking account of seasonal factors
Homeownership has increased for the third year running
Within the report, Robert Gardner, Nationwide’s Chief Economist, said: “To a large extent, the slowdown probably reflects a tapering of demand ahead of the end of the Stamp Duty holiday, which prompted many people considering a house move to bring forward their purchase. While the Stamp Duty Holiday is not due to expire until the end of March, activity would be expected to weaken well before that, given that the purchase process typically takes several months (note that our house price index is based on data at the mortgage approval stage).”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, has commented on the index results: “A predicted collapse in house price growth has failed to materialise. This was supposed to be the month that legions of buyers effectively threw in the towel and moderated their offers having been forced to remove the Stamp Duty tax break from the equation.
“Yet, despite everything, this market is still clinging firmly to strong annual price increases and this is further evidence that, while the Stamp Duty tax break was a catalyst for the mini-boom, it’s not the main motivator pouring fuel on this fire.
“This isn’t really that surprising. By the end of last year, the market’s gains had already eroded the tax benefit of the Chancellor’s scheme, which already suggested there was more going on. Those who benefit least are also those more likely to be older, with families and most in need of more space. These households are also more likely to have the money to make that move happen. They are responsible for the narrative that has characterised the past nine months.
“Continued talk of negative interest rates isn’t doing anything to cool demand for mortgages either and the housing market could still have a few more surprises up its sleeve this year.”
Lucy Pendleton, property expert at independent estate agents James Pendleton, comments: “Forget the mild monthly price decline, this is hardly the performance of a market in peril. The fact that most buyers agreeing purchases now will almost certainly miss out on Stamp Duty relief has barely moved the needle so there are wider factors at work here and chances are they’ve been cooking up a storm all along.
“Just look at what this market has weathered. After a year in which it has faced a stubborn pandemic, associated economic chaos and tightening borrowing criteria for first-time buyers, it has still surged beyond anyone’s expectations. Even in London, which can swing earlier and further than other regions, the pendulum is showing a reluctance to swing to the other extreme. Achieved sales prices have softened but it hasn’t been enough to send badly squeezed first-time buyers stampeding back to estate agents’ windows.
“Expect low-interest rates and vaccine optimism to continue to play a commanding role in what happens over the next few months, as all eyes turn to unemployment and the end of the furlough scheme. Those buyers who are confident in their income, however, will continue to make that felt and there are still plenty of them around.”
Adnan Shah, founder of ethical real estate investment manager Buraq London, comments: “A slight nudge southwards is a positive start to a year that had a lacklustre future written for it. January was arguably the sternest test of the residential market since the pandemic began.
“The initial shutdown last year stemmed a lot of panic, whereas last month’s statistics demonstrate that the residential market is actually much more willing to shrug off the sort of temporary economics that reach our ears daily than people give it credit for.”
Generation Rent has called on the Government to create a COVID Rent Debt Fund for clearing rent arrears to help half a million private renters keep their homes.
Generation Rent argues that government action has failed to address the underlying £360m of rent arrears. It is calling for the Chancellor to use the Budget to clear rent arrears and provide £288m to allow landlords with struggling tenants to claim up to 80% of the rent due.
The organisation highlights that in August 2020, 36% more private renters were relying on Local Housing Allowance (LHA) to pay their rent than in February 2020. It estimated that 538,000 private renter households in England were not receiving enough in LHA to cover their rent.
Generation Rent also points out that in January Citizens Advice estimated half a million private renter households were in arrears by November, owing their landlords £360m.
Under Generation Rent’s proposed COVID Rent Debt Fund, the Government would clear renters’ arrears, keeping them in their homes, while allowing landlords to apply for compensation of up to 80% of the original monthly rent.
Alicia Kennedy, Director of Generation Rent, said: “The Government’s measures to increase support through the benefits system have failed to prevent half a million households racking up rent arrears, which will be impossible to pay back even when the economy recovers. While most are not at immediate risk of eviction, they are still being forced to pay the price of the pandemic and face the prospect of homelessness without further action. To get these people back on their feet, we need Rishi Sunak to step in and clear these arrears with a COVID Rent Debt Fund.”
Research from ClearItWaste, the London waste collection service, analysed landlord reviews to create a points-based index revealing which city has the best landlords.
Collating landlord ratings from Yell, Google, and website Marks Out of Tenancy, the company has ranked UK cities.
ClearItwaste says that they looked at 20 of the most populated cities in the UK. All ratings were transformed into a score out of 100 points, which was then averaged per city. The company also used Google Ads to find the average monthly search volumes per city for terms such as ‘landlord issue(s)’ and ‘landlord problem(s)’.
The scores from the four criteria were then added together to calculate an overall score out of 400 points.
The top five best scoring cities were Sheffield (358/400 points), Bristol (295/400 points), Birmingham (295/400 points), London (284/400 points), and Glasgow (232/400 points).
The joint-worst scoring cities were Derby and Kingston upon Hull, each scoring 58/400 points.
The following article is a guest post from OpenPath on why remote security management is a smart investment for landlords during COVID and beyond.
Openpath, a leading provider of mobile and cloud-based access control solutions, shares how “access from anywhere” is shifting the rental mindset post-COVID.
Every landlord understands how vital security is to managing a property. Especially in multi-family residential buildings, where there are potentially hundreds of people coming and going every day, keeping the community safe is always top of mind. Not only is security important for asset protection, it’s actually an amenity renters seek out when looking for a new home.
Landlords can’t be at their properties 24/7, and round-the-clock security staffing can be difficult to manage. However, with new developments in security and safety technology, managing a property’s security system can now be done entirely remotely. This is especially helpful for maintaining security while coping with COVID-related restrictions at residential properties. Remote capabilities improve physical security at residential rental communities, without sacrificing convenience or safety, both for residents and staff.
And now, while the rental market is just starting to recover from a rough year, a more modern security system can attract new renters, and it can also help make properties safer, even when you’re not there.
Track and manage occupancy for community spaces
With social distancing required at many popular gathering spaces, including within residential communities and apartment complexes, being able to limit and control capacity is key to ensuring resident safety during COVID. In order to control occupancy in community spaces, such as pools, gyms, mailrooms, and lounges or multi-purpose spaces, landlords can utilise web and app-based tenant portals and remote-managed access control systems:
Set capacity limits on community spaces within the access control system’s dashboard. Once the specified zone is at capacity, no additional residents will be able to enter until somebody leaves.
Require residents to pre-register for community access for pools, gyms, and lounges via an online portal. With the tenant portal linked to access credentials, only approved residents will have access to the space. This minimises the work needed for on-site staff as well, eliminating cumbersome lists and manually programming credentials.
Permissions can be easily adjusted for residents or staff with a cloud-based access control system to accommodate special access requests or schedule changes.
With remote access to the entire security system, it’s easier for security teams and property managers to make adjustments at any time, whether they need to close the space entirely, change the capacity limit, or unlock the door remotely for a resident. Remote management also gives landlords and security teams visibility into occupancy in real-time, plus detailed reporting to track usage over time. This is helpful for noticing trends in peak occupancy, and determining when to best schedule maintenance around the property, and can also aid in contact tracing.
Improve issue response time
Often, one of the biggest challenges for any multi-family residential property is being able to respond to security issues quickly and efficiently. While remote management may seem like a deterrent in this goal, the opposite holds true. Empowering property administrators with remote access to the entire security system means 24/7 monitoring capabilities from anywhere. Plus, with cloud-based systems that run on open architecture, there’s the possibility of automating processes to reduce the manual work required to provide an efficient, timely response. In the case of an unauthorised entry attempt, here’s how that might look:
If the access control system receives a repeat attempt at accessing the lobby door after-hours with an unauthorised credential, the nighttime security team will receive texts alerting them to the issue, and an email notification goes out to all building staff automatically. The attempts are also recorded into the system’s activity log.
When integrated with cloud-based security cameras and VMS, the security teams can check the video footage of the incident remotely. This provides visual verification of who is at the door, and helps security teams determine next steps.
With the ability to remotely unlock the door, security teams can let the resident in, and fix any issues with the credential without having to set foot on the property. The resident isn’t left locked out for long periods of time, and the building’s security was never compromised.
If the event is more dire, such as a forced entry or door left ajar, it’s easy to make important, split-second decisions such as locking down the community, alerting residents to an intruder, or notifying local authorities.
In the event of an emergency, building managers need to act fast. With access control systems that feature remote lockdown capabilities, every door can be locked in a matter of seconds, with just a few taps on any internet-connected device. With the right automations in place, an activated alarm in the complex can trigger an alert sent to admins, who can check the status of the alarm and building remotely, activate a system-wide lockdown, and automatically notify emergency responders of the incident.
With all access events and footage logged in the system, it’s also easier to audit security problems, and provide the necessary information to authorities in case of a break-in or property damage.
Centralising management for multiple buildings
Many residential landlords operate multiple complexes, which presents its own set of management challenges. Remote security management is an excellent way to protect every building in a portfolio. Because each building has unique characteristics that need to be addressed separately, it’s smart to invest in a robust security system that has flexible configurations and an easy-to-navigate interface. With a cloud-based solution, landlords can manage every building on one secure, convenient platform, from anywhere in the world.
Rather than using disparate systems for each building, a cloud-based option that consolidates the entire security platform onto one interface gives better awareness of what’s happening at all of the properties at one time. Easy search filters make it quick and efficient to find specific information, and detailed reporting can give a unique picture of each building separately, or the entire portfolio.
One, centralised security platform minimises the need for additional on-site security staff, and creates a more unified team. This is especially helpful when adhering to COVID-related occupancy restrictions in on-site office spaces. A remote access control system and security platform allows for a more dispersed team, and makes it easier to accommodate flexible scheduling and staggered shifts.
When door schedules need to be changed, or permissions adjusted, it’s all easily configurable from any device. Even issuing and revoking credentials is instant over the cloud, with site-specific permissions available to cater to each building’s staff and residents.
How remote technology improves ROI
While the benefits of a remote security management system during COVID are clear, it’s important to consider how these investments will hold up over time. Technology that is adaptable provides more flexibility. For example, updating cloud-based software solutions doesn’t require any in-person maintenance or technicians on the property—it’s all done over-the-air, minimising system downtime. It’s more convenient, often more cost-effective, and improves building security by providing the most up-to-date features and capabilities instantly.
Occupancy tracking and remote capabilities are also powerful tools in space optimisation, well after social distancing guidelines begin to relax. Analysing occupancy for community spaces over time can inform decisions about what equipment or furniture is needed, how often to clean, and if any changes to staffing are needed, all down to the hour. All of this equates to residential communities that are safer, more efficient, and more sustainable with less investment.
Key takeaways for landlords: increased safety and peace of mind
While the rental sector was not immune to the effects of COVID-19, there is still hope for improvement over the next few years. In their 2020 report, CBRE cites an estimated £40bn in multifamily equity investment last year as a sign of stability in that sector. A strong multifamily sector, however, means competition for landlords, who will need to show good faith that they are acting on behalf of residents’ safety and wellbeing. Both prospective and current residents appreciate modern physical security upgrades, especially when it doesn’t interfere with their day-to-day. Features like touchless elevators and entry via their mobile phones, capacity limits for amenities, and 24/7 controlled access help residents (and often staff!) feel like the building is a healthier, safer space.
In order for landlords to take full advantage of this upswing, they need to invest in the right safety and security technology. Even as concerns begin to shift away from COVID, remote security management is a tool that helps future-proof residential and apartment communities, while providing all-important peace of mind for both renters and landlords.
About the Author
marketing@openpath.com
Andi Hendrickson is the Marketing Copywriter for Openpath Security, a leading provider of cloud-based and mobile access control solutions for commercial property, enterprise, and small businesses around the world.
