Written By Em

Em Morley

Diversity of landlords make communicating rules difficult

Published On: July 9, 2016 at 9:20 am

Tags: information for landlords,landlords,landlords legislation,private rental sector

A new report has suggested that the diverse nature of landlords makes it almost impossible to fully communicate new rules and legislation.

The study, entitled ‘Who are individual landlords providing private rented accommodation?’ was penned by industry expert Kate Faulkner, with assistance from the TDS Charitable Foundation. This organisation works to further education on housing rights and legal obligations.

Changing obligations

Results from the survey found that many landlords have varying professions alongside their work as an investor. Teachers, doctors, librarians and army officers were just a few roles of landlords completing the survey.

40% of respondents to the investigation said that they were ‘accidental landlords.’ Whilst trying their upmost to do right by their tenants, many of these landlords are left confused by changing legislation. Worryingly, one in five respondents were found to do no research before letting out a property.

Kate Faulkner believes that the private rental sector should work more closely to inform landlords on legislation and in turn create a safer sector.

She noted, ‘there are currently 145 lettings rules and regulations on letting. Not only do they seem to be changing all the time but they can vary from one local authority to another. It’s no wonder landlords are confused and struggle to keep up with the law, particularly if they are letting out property in another part of the country to where they live.’[1]

Diversity of landlords make communicating rules difficult

Collaboration

Faulkner has called for those in the private rental sector, such as lenders, letting agents and local authorities, to collaborate, in order to provide landlords with the tools needed to let a property legally.

‘We would like to see the private rented sector working together to promote trusted and consistent sources of information about preparing a property to let legally, about changes in the law, property maintenance and of course, where to turn for independent, qualified advice, Faulkner stated.[1]

‘However, because landlords are such a diverse group of people and with many self-managing their properties, it makes it extremely difficult to communicate with them, unless they actively seek out information for themselves . Even if they do their own research about rules and regulations, it can be still be confusing and the report suggests experienced landlords struggle too. This is why they need a clear source of information they can turn to,’ she continued.[1]

Concluding, Faulkner said, ‘in addition, to encourage best practice, we would also like to see the Government introduce incentives for landlords to stay within the law, such as tax breaks or special deals which reward those that are renting legally and safely.’[1]

[1] http://www.propertyreporter.co.uk/landlords/landlord-diversity-makes-communicating-new-rules-virtually-impossible.html

Agent in Scotland fined for breaching tenancy deposit rules

Published On: July 8, 2016 at 11:24 am

Author: Em Morley

Categories: Landlord News

Tags: deposit schemes,lettings agency,Scottish letting agency,tenancy deposits

A lettings agency in Scotland has become the first north of the border to be reprimanded for breaching legislation on tenancy deposit securement.

The ruling against Colvin Houston Ltd at Kilmarnock Sheriff Court could have wider implications for the entire lettings sector in Scotland. This decision was the first time an agency in the country has been prosecuted under the Tenancy Deposit Schemes (Scotland) Regulations 2011.

Legislation

This legislation was introduced to make sure deposits were secured in independent tenancy deposit schemes and subsequently protected by third parties until repayment date.

Initially set up to prevent tenants from losing their deposits unfairly, the scheme had never previously been used to prosecute letting agents.

Primarily, housing legislation north of the border puts the responsibility for securing tenancy deposits firmly on landlords. However, the consumer protection legislation was used in this case to make an agent responsible for the responsibilities they carried out on behalf of their landlords.

Agent in Scotland fined for breaching tenancy deposit rules

Guilty

Colvin Houston Ltd, of Largs, pleaded guilty to the charges, relating to two specific tenancy deposits. These amounted to £925, which was not placed in a statutory deposit scheme.

In addition, the company was fined £750, reduced to £500 for an early plea.

Jen Paice, chief executive of SafeDeposits Scotland, said, ‘the statutory duty to protect a deposit is on the landlord even when a letting agent is used so it’s essential to seek confirmation that this is happening and alert the authorities where it is not. We hear first-hand about the success and benefits of the scheme in providing assurance for tenants and landlords alike.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/7/letting-agency-fined-in-pioneering-law-case-concerning-tenant-deposits

Brexit has caused a mixed London rental market

Published On: July 8, 2016 at 10:21 am

Author: Em Morley

Categories: Property News

Tags: Brexit,EU referendum,London property market,rental market in London

The result of the EU referendum has created a mixed rental market in the capital, according to a new report by letting agent Benham & Reeves Residential Lettings.

Rents were up by in excess of 4% in Chelsea, however in nearby South Kensington, rents were down by around the same figure. Similarly contradictory results were evident across the capital in the second quarter of the year.

Brexit uncertainty

In the earlier part of this year, uncertainty over the result of the EU referendum was having an impact on the prime central London rental market. Rents in the capital were falling, frustrating landlords suffering from reduced capital growth.

With rental value growth seen in outer London suburbs until recently, the report indicates that even these locations have now seen a peak. Rents in these areas have either plateaued or have risen only marginally.

The lack of any definable trends is certainly noticeable. For example, Hampstead Garden Suburb enjoyed rental growth of over 4.5% but nearby North Finchley saw rents tumble by over 10%. The eastern part of London has seen double-digit growth, thanks largely to high-value developments in the region. However, the Western part of London has seen rents slide by more than 4%.

Brexit has caused a mixed London rental market

Volatility

Marc von Grundherr, of Benham & Reeves Lettings, said, ‘there is nothing the property market hates more than uncertainty. While the referendum result may not have been what many London residents wanted, it has provided us with an answer. Our Q2 results are a reflection of what was happening in the market in the run up to the vote.’[1]

Continuing, he noted that, ‘if anything, the referendum result could be just what the market needed. The rental market always benefits in financially volatile times as people would rather rent than commit to buying a property. Demand is still strong and since the referendum, we are receiving an average of 17 applicants per property compared to the 13.9 at this time last year. Notably, many of the applicants have been from the EU.’[1]

[1] http://www.propertyreporter.co.uk/landlords/has-brexit-caused-a-mixed-rental-market.html

Estate agents concerned on Brexit impact

Published On: July 8, 2016 at 8:46 am

Author: Em Morley

Categories: Property News

Tags: Brexit,estate agents,EU referendum,residential property market

A new survey has revealed that 42% of UK estate agents feel the decision to leave the European Union has already had a detrimental impact on their business.

Further data from the report by software supplier Dezrez has revealed that one agency has recorded a 40% drop in valuations already.

Brexit falls

One-third of respondents predict that there will be between 5%-20% fewer properties on the market as a result of the Brexit vote. In addition, homeowners could see the value of their properties fall between 5%-15%.

52% of estate agents queried feel that vendors or buyers will fall out of potential sales. On the other hand, 53% said that they had seen no impact to date, with 37% believing the vote result will not have a long term effect on their business.

Interestingly, only a few estate agents have fully prepared for the ‘leave’ vote. 54% feel it is too early to devise a strategy. 16% said they had a plan, with 13% saying they are currently working on one.

Caution

Chief Executive of Dezrez, Justin Morris, observed, ‘as the economic landscape continues to shift following the UK’s vote to leave the European Union, the Bank of England Governor Mark Carney has warned prospective buyers to proceed carefully if planning to borrow money.’[1]

‘This warning and the ongoing analysis from property professionals, is unsurprising. However, until the market settles, we won’t know the exact extent the effect Brexit will have on the residential property market. What is clear is that in the short term uncertainty will lead to a dip in market confidence,’ Morris continued.[1]

Estate agents concerned on Brexit impact

Savvy success

Morris went on to note that while opportunistic buyers could look to negotiate a bargain, savvy buyers will look at the economic effect on their finances. Many estate agents feel there are still more buyers than sellers in the market. With a reduction in housing stock likely, the market could move to even out.

Concluding, Morris said, ‘the role of the estate agent will be increasingly important to vendors and buyers alike. Negotiations may become trickier and sales progression more complex, consumers will rely heavily on traditional estate agents for their experience and advice. There is no doubt that there are challenges and opportunities ahead.’[1]

[1] http://www.propertywire.com/news/europe/uk-estate-agents-brexit-2016070712117.html

New HMO licensing scheme for landlords in Barnet

Published On: July 7, 2016 at 11:31 am

Author: Em Morley

Categories: Landlord News

Tags: HMO's,HMOs licensing scheme,landlords,licensing scheme

A new property licensing scheme has been introduced for buy-to-let landlords operating in the London borough of Barnet. This follow the decision made by the council’s housing committee earlier on the year to raise more money at landlords’ expense.

The scheme, which started on Tuesday 5^th July, applies across the borough and applies to some HMO’s containing four or more people that are not related.

Licensing

This additional licensing involves residential properties more than two storeys high, flats on the second floor or higher and owner occupied properties with four or more inhabitants.

What’s more, the scheme includes ‘section 257 HMO’s’, which are buildings that have been converted into self-contained flats and meet specific criteria. However, this aspect of licensing only applies to three storey buildings where the building and flats are owned by the same person.

According to Barnet Council, there are almost 6,000 HMOs in Barnet, of which almost 3,900 will need to licensed. There is strong support for the scheme, with 75% of those consulted giving their approval to the changes. However, less than 20% of this support came from landlords and letting agents, with the bulk of the support coming from tenants, residents and further organisations.

New HMO licensing scheme for landlords in Barnet

Fees

Landlords who apply for a license within three months of the scheme declaration will be eligible for a five-year term. Any applications received after this date will only be eligible for a one-year licence.

Fees will also rise, with five-year terms commanding £1,008 for five people. The same one-year licence will cost £665.

Barnet council leader Richard Cornelius noted, ‘there is no doubt that well managed HMO’s have an important role to play in helping meet our housing needs. From research we know though that people living in HMOs can be vulnerable and at increased risk of being exploited by landlords. Our recent survey of people living in HMOs was a cause for concern.’[1]

‘For these reasons we are taking action to help drive-up standards of HMOs across the private rented sector to encourage good landlords and crack down on rogue landlords who expose their tenants to unnecessary health and safety risks through substandard accommodation,’ Cornelius added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/7/new-licensing-scheme-to-cost-landlords-upwards-of-650-a-year

Study into Decline of Homeownership Expected for Release in Autumn

Published On: July 7, 2016 at 10:46 am

Author: Em Morley

Categories: Property News

Tags: Brexit,homeownership,housing crisis,housing market,Redfern Review

The Redfern Review, an independent study into the decline of homeownership, is expected for release in autumn 2016.

The report, commissioned by the former Shadow Secretary of State for Housing and Planning, John Healey MP, is undergoing an extended consultation period to take into account the consequences of the recent UK vote to leave the EU.

Study into Decline of Homeownership Expected for Release in Autumn

The Redfern Review’s main objective is to analyse the recent decline in homeownership and ways in which opportunities to boost homeownership can be improved. It is an independent review that aims to widen public debate and policy thinking.

Despite his recent resignation from the shadow cabinet, John Healey continues to work on housing and is determined to continue to encourage the delivery of the review. Alongside Peter Redfern, he remains passionate about the long-term health, sustainability and fairness of the property market. Redfern is committed to completing the work of the review, and expects it to be published in autumn.

The recent uncertainty caused by the EU referendum has put the housing market into sharp focus as a key factor in national social and economic stability, and in the security and life choices of individuals.

The panel and team have already focused on the long-term issues surrounding the market, how short-term initiatives impact in the long-term, and the balance of opportunity for all in accessing homeownership and other forms of housing tenure.

In the early autumn, the panel expects to set out a comprehensive analysis of the decline in homeownership and an overall framework within which high quality and long-term housing related decisions can be made.

However, the referendum vote of 23^rd June has caused a series of potential challenges and opportunities, and the team intends to update its report to take this change into account.

The initial submission and consultation process is now complete, but the Redfern Review will now extend its consultation deadline to 31^st July, to consider the impact of Britain’s exit from the EU. Submissions can be sent to: info@redfernreview.org.

Peter Redfern comments: “The long-term decline in homeownership in the UK towards 60% disadvantages both individuals and the health and stability of our economic and social structures. Our initial findings indicate that only long-term measures will work in addressing this critical issue in a sustainable way.

“The review will report in the autumn taking into account views on the impact that Brexit will have on homeownership. We need to continue to strive to give current and future generations a realistic opportunity to own their own home.”

John Healey MP adds: “Following the recent referendum vote, fresh thinking and new ideas in areas like housing are more needed than ever. I’ll be carrying on my work on housing, and look forward to the important contribution the Redfern Review will make to our national debate.”