Written By Em

Em

Em Morley

Prepare for increased festive arrears as England eviction ban is extended, warns PayProp

Published On: December 14, 2020 at 9:20 am

Author:

Categories: Landlord News,Tenant News

Tags: ,,,,

Shelter calls on Government to act on repossession reform promise

PayProp has commented on the Government’s decision to extend the evictions truce over Christmas.

Neil Cobbold, Chief Sales Officer at PayProp, comments: “Since March, increasing limitations on property possession claims through the courts have made 2020 a difficult year for landlords and letting agencies to deal effectively with serious issues such as rent arrears.

“The scant supply of repossession options will continue over the coming weeks due to an extended Christmas evictions truce between December 11th and January 11th 2021, with no enforcement action allowed in England until January 25th.

“Rent arrears tend to build up during the festive period, pushing many landlords to pursue eviction through the courts. However, with their options more limited than usual, alternatives to eviction should be investigated first, and the role of letting agents as mediators will be crucial.

“Letting agencies can help by effectively and proactively managing communication between landlords and tenants, either preventing or reducing arrears through effective reminders or organising affordable repayment plans. By digitally recording all payments and automating arrears chasing and employing the services of a dedicated eviction expert, agents can better navigate the changing rules during this trying period. 

“Next year, the prospect of a successful COVID-19 vaccine rollout and the financial support provided by an extension to the furlough scheme could improve the situation and pave the way for more normal eviction avenues to resume.

“However, there will still be challenges ahead as the minimum notice period for evictions (except for the most serious cases) remains at six months until March at the earliest. Meanwhile, there will also be the renewed prospect of Section 21 being scrapped as part of the Renters’ Reform Bill, further curtailing options.

“Agencies would be well advised to sharpen up their arrears management processes and knowledge of this crucial area of agency work.”

Will student tenants be landlords’ ‘ray of hope’ in 2021?

Published On: December 8, 2020 at 9:26 am

Author:

Categories: Landlord News,Lettings News

Tags: ,,

Record number of students looking for accommodation last minute

UK rental guarantor service Housing Hand has highlighted that falling property prices, tax changes, and lower numbers of international renters will be a major stumbling block for the UK rental sector in 2021.

Jeremy Robinson, Group Managing Director of Housing Hand, says: “The only thing certain about the UK rental market following Brexit is uncertainty. Landlords face uncertain income from tenants, while tenants continue to face uncertain income due to the pandemic. Meanwhile, the number of working European tenants is likely to drop due to Brexit and COVID. All against a likely backdrop of falling property prices.

“The requirements for European tenants to travel, work and rent in the UK will change as a result of Brexit. Renting is likely to become more difficult, as the right to rent requirements will almost certainly change at some point in the not-too-distant future. Brexit’s effect on rental property, compounded by COVID, tax and legislation changes, means it is difficult to foresee many positives for landlords in 2021.”

Housing Hand points out that data from estate agent JLL indicates house prices in 2021 are likely to drop by 1.5%. Rental values are also predicted to fall by 1.0%. The guarantor service believes that factors such as lost GDP growth, rising unemployment, falling housing affordability, and the end of the furlough scheme will play a part in this.

The problem might only be made worse by a reduction in international tenants, an increase in tenants defaulting on rent, and a possible oversupply of rental accommodation. However, Housing Hand’s ray of hope is student tenants.

Terry Mason, Group Operations Director for Housing Hand, comments: “The indications are that the 2021/22 academic year is likely to be a bumper year for students, with little reaction to Brexit. 

“We have last year’s candidates who decided to take a year out rather than attending university now wanting to start. We also have a larger number of students reaching university age with fewer jobs available, meaning going to university becomes a safer option. Then there’s the fact that a larger number of international students started university in 2020 and will thus be returning for their second year.”

Poll highlights lack of knowledge about client money protection amongst landlords and tenants

Published On: December 4, 2020 at 9:41 am

Author:

Categories: Landlord News,Law News,Tenant News

Tags: ,,

client money protection

A recent poll by Client Money Protect, one of the Government’s approved client money protection (CMP) schemes, has found that 77% of landlords and tenants don’t know what CMP is.

Following the results of this poll, the scheme is urging landlords and tenants to check that their letting agent offers this level of protection, which became mandatory in April 2019. 

According to the Property Redress Scheme, in the eight months since the pandemic started (from mid-March to mid-July), there has been a 66% increase in letting agents ending their redress membership because they have ceased trading in comparison to the eight months prior to the pandemic (Jul 2019 – March 2020). This indicates that an average of more than ten letting agents a week are closing down. 

Kate Mutter-Bowen, from Client Money Protect, commented: “It is now eighteen months since it became a legal requirement for all letting agents to have client money protection. Most people know when they book a package holiday to check it is ATOL protected, meaning if the holiday firm goes bust, they do not get stranded abroad or end up out of pocket. 

“However, people often part with far greater sums of money when they let or rent a property and yet they don’t check that this money is protected. The lettings industry must work harder at educating consumers on the importance of checking their letting agents will protect their money.”

In the poll, only 35% said they checked that their letting agent had Client Money Protection. 

Simone Potter Reed, Investigator at National Trading Standards Estate and Letting Agency Team (NTSELAT) said: “It is of the utmost importance that all letting agents are members of a Client Money Protection Scheme to provide security and peace of mind for tenants and landlords. 

“NTSELAT recognises that the pandemic has caused letting agents to face challenging times, however, the cost of joining any CMP scheme is financially much less than the monetary penalty amount of up to £30,000 for failing to be a member of a CMP scheme, which are issued by enforcement officers. This is a hefty price to pay for failing to become a member of a scheme at the outset. 

“NTSELAT advise that tenants and landlords check if their agent is registered with one of the six approved CMP schemes before entering into business with them.  Take the time to make those checks to avoid financial detriment.”

NRLA calls for landlord and tenant conciliation service

Published On: December 2, 2020 at 10:19 am

Author:

Categories: Landlord News,Tenant News

Tags: ,

NRLA calls for landlord and tenant conciliation service

Private landlords are calling on the Government to establish a new landlord and tenant conciliation service as part of its planned changes to the private rented sector.

The National Residential Landlords Association (NRLA) is making this call as the Government prepares to publish its proposals for the Renters’ Reform Bill.

With the Government committed to abolishing Section 21 ‘no fault’ evictions, the NRLA wants fundamental reforms to the rights of re-possession that are fair to both tenants and landlords.

Where possession notices are challenged, the NRLA is calling for the creation of a new, publicly funded conciliation service, similar to the employment dispute body, ACAS. This would seek to resolve disagreements between landlords and tenants without the stress and costs associated with going to court.

Whilst more serious cases, such as those related to criminal activity by a tenant, would need to go straight to court, most could be considered by the conciliation service. The NRLA believes this would help the tenant and landlord to reach an agreement to keep the tenancy going or bring the tenancy to an end in a way that works for both parties. Both tenants and landlords would be able to access the advice and support they needed to make their case.

Where landlords failed to abide by the terms of the agreement, they would be banned from being able to repossess the property using the same ground for six months. Where renters did so, the case would be fast-tracked through the courts.

Ben Beadle, Chief Executive of the NRLA, said: “As the Government prepares this important Bill, it needs to enjoy the full confidence of both landlords and tenants. Our proposals are for a fundamental reform of re-possession rights which strike the balance between the needs of both. The over-riding aim is to sustain tenancies wherever possible or bring them to an end in a collaborative way. 

“We hope that ministers will accept our proposals and act on them soon.”

Number of households having benefits capped more than doubles during pandemic

Published On: November 30, 2020 at 9:35 am

Author:

Categories: Tenant News

Tags: ,,

The Department for Work and Pensions (DWP) has released the latest experimental statistics on how many households had their benefits capped between April 2013 and August 2020.

The key findings from the release are:

  • As of August 2020, 170,000 households had their benefits capped, this is an 8% increase from the previous quarter
  • Since the start of the pandemic, the number of households capped has risen from 79,000 in February 2020 to 170,000 in August 2020
  • 59,000 households had their benefits capped for the first time this quarter
  • On average households are capped by £57 per week

You can read the full Government report here.

Commenting on the statistics Jon Sparkes, Crisis Chief Executive, said: “With the full extent of the economic impact of the pandemic coming to light and the country facing a steep climb to recovery, these figures show just how dire the situation is for people who’ve lost their job and are now battling to pay their rent. 

“Despite assurances that the nine-month grace period would protect people who’ve just lost their jobs from having their benefits capped, we know that for thousands of people this much-needed respite will be coming to an end right before Christmas, leaving many worrying about how they’re going to keep a roof over their head or put food on the table. 

“With the jobs market showing little sign of improvement, we urgently need the government to extend the grace period so that families don’t start the new year with the very real threat of eviction. We also need to see people rough sleeping exempt from the cap so that councils can move people out of expensive emergency accommodation quickly, and into safe and secure homes they can afford.”

Government announces new housing benefit cap for next year

Published On: November 27, 2020 at 9:03 am

Author:

Categories: Tenant News

Tags: ,

Over 100,000 renters on Universal Credit at risk of eviction due to government cut

The amount that tenants can claim from the Government to support rent payments will be cut, as a new benefits cap has been announced.

According to a report by the Office for Budget Responsibility, published alongside the Spending Review this week, the Local Housing Allowance (LHA) will be frozen in cash terms from next year. This means that the rate will fall below the current level which is set to cover the lowest 30% of rents in any given area.

The National Residential Landlords Association (NRLA) is warning that the announcement represents a kick in the teeth for both renters and landlords struggling with the consequence of rent arrears through no fault of their own.

The association highlights that the current rate was set in April to help renters whose incomes had been affected by the pandemic to meet the cost of their rent. A recent analysis by the Joseph Rowntree Foundation suggests that 5% (200,000) households in the private rented sector are in arrears. 30% of all private rented households are worried about paying their rent in the next three months, compared to 19% immediately before COVID-19.

The NRLA says that the vast majority of private landlords have done everything they can to support struggling tenants. However, given that most landlords are individuals and not property tycoons it will become increasingly difficult to keep affected tenancies going without adequate financial support to pay off rent arrears.

Ben Beadle, Chief Executive of the NRLA, said: “Many renters and landlords are struggling with the consequence of rent arrears through no fault of their own yet the Government is failing to take the action needed to address this.

“Whilst the Chancellor has spoken about the need to support those who find themselves homeless, it would be much better for all concerned to provide the funds needed to sustain tenancies in the first place.”