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Em Morley

£5m Rogue Landlord Fund Will Not Work if Legal System is Not Updated

Published On: January 25, 2016 at 1:07 pm

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Last week, the Housing Minister, Brandon Lewis, announced a £5m fund to help local authorities tackle rogue landlords. However, the body that represents councils believes that the funding will not work if the current legal system is not updated.

£5m Rogue Landlord Fund Will Not Work if Legal System is Not Updated

£5m Rogue Landlord Fund Will Not Work if Legal System is Not Updated

The fund will be split between 48 councils in England. It is aimed at eradicating “the cowboy operators in their area and bring an end to tenants living in miserable homes in the name of profit”. Find out if your council will receive a share here: /5m/

The new fund is part of the proposed Housing and Planning Bill, which also looks to introduce banning orders for persistent rogue landlords and letting agents.

The Local Government Association (LGA) has responded, saying that the system for prosecuting rogue landlords must be modernised.

The spokesperson for the LGA, Peter Box, states: “The private rented sector is growing and, with limited resources and competing funding pressures, councils are working hard to ensure that rogue landlords are dealt with robustly and effectively.

“However, they are too often being hamstrung by an outdated system. It can take more than a year to prosecute a rogue operator and in many cases, paltry fines are handed out to criminal landlords.”

He continues: “Proposals in the Housing and Planning Bill for banning orders for the worst operators in the private rented sector will help councils tackle this issue, as will the flexibility to issue fines to private landlords as an alternative to prosecutions.

“We will be working with the Government to ensure measures in the bill are properly resourced so councils can make full use of them.

“Our chronic housing crisis is making it easier for bad landlords to exploit tenants.”

He adds: “Councils must be given a lead role in building new affordable rented homes so that people who can’t afford to buy are not forced into the more expensive private rented sector.”1

1 http://www.local.gov.uk/media-releases/-/journal_content/56/10180/7657355/NEWS

 

 

 

Tenants’ dream features revealed in new survey

Published On: January 25, 2016 at 12:54 pm

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A good-sized garden. A garage or a driveway to park the car on. The waft of seaside air in the lungs.

These three things have been identified as some of the key features representing tenants’ dream characteristics when renting a home.

Setting

A report by Property Let By Us.com shows that one-third of tenants would like to live in rented accommodation by the sea. 25% wanted a rural setting, with 18% preferring a cul-de-sac. 7% said they wanted a nice housing estate, with 5% wanting to live in a suburban location.

When asked about domestic features, nearly two-third of respondents said that off-road parking was their main desire. However, this feature was beaten by the number of tenants wanting a property with a garage (72%). A good-sized garden (41%), shed (35%), a big kitchen (30%) and superfast broadband (28%) came next in the list of desirable amenities.

Tenants' dream features revealed in new survey

Tenants’ dream features revealed in new survey

Surprising

Jane Morris, Managing Director of PropertyLetByUS.com, noted that the survey provided some, ‘interesting findings that might surprise landlords. A property by the sea, or in a rural location, is a dream for many home owners and tenants. Landlords that own properties in these locations, or provide some of these most desired domestic appliances, will be spoilt for choice when finding new tenants.’[1]

Clearly, landlords have the opportunity to enhance their properties and boost their rental income by adding some of these dream domestic features. Superfast broadband for example is becoming widely available and many rural locations are being connected over the next two years. Storage such as sheds and garages is high on the wanted list, especially for families,’ Morris added.[1]

[1] http://www.propertyreporter.co.uk/landlords/what-would-make-a-dream-home-for-a-tenant.html

Seasonal lull in BTL ahead of expected surge

Published On: January 25, 2016 at 11:46 am

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A typical, seasonal lull occurred in the rental market during the last month, with the supply of properties falling alongside demand.

These were the findings of the latest report by ARLA, whose agents registered an average of 29 prospective new tenants in December. This was down on the 34 recorded in November, a fall of 15%.

Supply also dipped in the last month, with an average of 182 properties managed per branch, as opposed to 189 in the previous month. Potential renters in the capital however were not spoilt for choice, with an average of only 108 properties managed per branch, 43 less than the overall national average.

Rent relief

In addition to falling supply and demand, rents also slid in December, with the number of tenants experiencing rental increases dropping. Just 18% of ARLA letting agents reported an increase in rents, a drop of 5% since November. Additionally, this was the lowest total recorded in the whole of 2015.

‘As we’d expect in December, the UK saw a lull in activity, with people putting off any moves until January,’ noted David Cox, ARLA managing director. ‘It’s reassuring to see the number of agents reporting rent increases is still on the decline-some encouraging news for tenants as we start 2016’.[1]

A change is coming

Unsurprisingly, the views of ARLA members on the upcoming tax hikes mirror those of the wider sector. 62% believe that the changes will push up rents, while 65% believe the alterations will lead to some landlords leaving the sector, thus lowering supply still further.

The upcoming changes in legislation seem to be having an immediate impact on investors, with ARLA agents recording a 24% increase in investors looking to purchase before the changes come into play in April.

‘With supply, demand and the number of agents reporting rent increases all declining in December, this could well be the calm before the buy-to-let storm,’ Cox continued. ‘Buy-to-let landlords determined to complete purchases before the changes come into force in April are storming the UK housing market, meaning the lull we’d usually see is less significant.’[1]

Seasonal lull in BTL ahead of expected surge

Seasonal lull in BTL ahead of expected surge

‘Subsequently, after April, we’re very likely to see the number of buy-to-let properties on the market begin to decrease and this will most certainly have a detrimental effect on renters across the country,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/is-this-the-calm-before-the-buy-to-let-storm.html

 

 

Landlords campaigning against tax hike to contact Government

Published On: January 25, 2016 at 10:14 am

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An attempt by two buy-to-let investors to seek a judicial review of the Chancellor’s mortgage interest tax relief alterations is beginning to gather pace.

Steve Bolton and Chris Cooper have taken advice from a number of legal aids, including Cherie Blair QC, on the prospect of getting a review of section 24 of the Finance (No.2) Act 2015. They have been informed that they have a, ‘reasonable chance of success.’

Challenge

Messrs Bolton and Cooper launched their challenge shortly before Christmas and had little trouble securing £50,000 through crowdfunding to first secure legal advice and then launch the campaign.

Mr Bolton is head of Platinum Property Partners, which has £200m of residential property in its portfolio. He has teamed up with fellow buy-to-let landlord Cooper in order to launch a challenge, on behalf of nearly 250 investors in the Platinum Property Partners network.

Landlords campaigning against tax hike to contact Government

Landlords campaigning against tax hike to contact Government

On their Facebook page, the pair state, ‘the Finance Act 2015 includes Clause 24, which overturns a fundamental financial business principle, where INCOME less COSTS equals PROFIT. The current government sees fit to change this trend, tested and proven commercial formula. In simple terms, the government believe that it makes complete sense to tax property owners on that part of the rent that has been paid to the lender as mortgage interest, as that money was still in the property owners’ bank account!’[1]

‘The next step is for our lawyers, Omnia Strategy LLP, to send a letter outlining our case to the government with a view to commencing judicial review proceedings,’ the post adds.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/1/lawyers-for-anti-osborne-buy-to-let-tax-changes-to-contact-government-this-week

The Hidden Costs of Renting

Published On: January 25, 2016 at 9:48 am

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Shocking new details of charges within the lettings industry have recently emerged, indicating that tenants are increasingly being faced with hidden costs.

Some renters in London are being charged £10 whenever they have a friend to stay, while others report that they are being asked to pay whenever they cook or wash their clothes. In some cases, prospective tenants are being charged over £100 just to see a list of properties.

Letting agents are not permitted to charge tenants for registering or seeing a list of properties if they also charge the landlord. However, firms such as EasyLets UK, Spacelet or Flatland, which are relocation or appointment-making agents, find their way around the rule.

The Hidden Costs of Renting

The Hidden Costs of Renting

Instead of receiving payment from the landlords whose properties they market, they charge potential renters upfront fees. It now appears that landlords too are adding on more costs.

Gloria Orphanidou, a graduate from Cyprus, has been trying to find a room to rent in the capital since December that is within her £500 per month budget. She paid West End agent EasyLets £110 to find a property after seeing potential homes listed by the agent on Rightmove.

She was told that bills were included in the advertised rent prices, but when she approached the landlords of these properties, one informed her that she would be charged a fee every time she cooked or did laundry.

She adds: “The other two were properties living with landlords, where I was not allowed to have any visitors unless I paid them £10 every time someone came to see me.”

These strategies appear to have become commonplace in a market that is as competitive as ever and is becoming increasingly expensive.

The latest data on the private rental sector, from Your Move and Reeds Rains, shows that rent prices in England and Wales rose by an average of 3.4% in 2015, taking the cost of renting in some regions to record highs.

The greatest increase over the last year was in the East of England, where rents grew by 7.8% to an average of £831 a month. Meanwhile, the 6.3% rise in London took the average to £1,251.

Demand for private rental accommodation has been fuelled by the number of hopeful first time buyers struggling to get onto the property ladder. In prime central London, estate agents have reported an increase in the amount of wealthy households looking to rent rather than buy, due to Stamp Duty rises.

Over the weekend, we uncovered a flat that was named the cheapest in London. It was sold for £79,000 despite being just 75 square feet. Take a look: /is-this-the-cheapest-flat-in-london/

Orphanidou complained to EasyLets that the homes she was shown were inappropriate, but the company refused to refund the £110 fee.

“I felt so stupid and angry at myself,” she comments. “I am broke enough as it is, with just enough money to pay rent for a cheap room, and I had wasted £110 on an agent who clearly doesn’t care and won’t help me find a house.”1 

The Observer inquired into the case, to which EasyLets forwarded 16 text messages from satisfied clients who had found a room through the agent.

The Director of EasyLets UK, David Funaro, told the Observer: “Please mention in your article the few people who text me and thank me for my help. I did find a place for Gloria with permission to have her boyfriend over on the weekend and pay £10 for the night he would stay to the landlord and she even liked the room.”1

Giles Peaker, a housing lawyer at Anthony Gold Solicitors, called the £10 fee “dreadful”1 and says the contract term could be deemed unfair and therefore unenforceable.

The Policy Officer at Generation Rent, Dan Wilson Craw, adds: “Paying an upfront fee before seeing a single property, let alone agreeing a tenancy, is full of risk. To learn that you might then be asked to pay extra for everyday behaviour like having a partner stay over or cooking a meal is shocking.”1 

Have you faced any similar charges yourself? Or perhaps you’ve imposed fees like this to your tenants? Either way, do you agree with the costs?

1 http://www.theguardian.com/money/2016/jan/23/hidden-costs-facing-generation-rent

Many landlords still not prepared for Right to Rent

Published On: January 24, 2016 at 11:49 am

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A concerning new report has indicated that only half of UK landlords are ready for the Right to Rent rollout, which is set to come into effect in less than 2 weeks (February 1st).

Urban.co.uk conducted a survey of 5,000 landlords and found that 20% wrongly believed that they had until April 2017 to prepare for the changes. 3% thought they had until 2018!

Knowledge

These alarming findings were part of Urban.co.uk’s Landlord Knowledge Survey Report, which questioned landlords on issues relating to the leasing market.

With a number of new legislations coming into play in 2016 and landlords’ responsibilities growing, the investigation provided cause for concern.

Key findings from the report include:

  • just 10% of landlords provide the correct information to their tenants at the start of a new tenancy
  • 90% of landlords could not articulate the characteristics of a HMO
  • 16% did not put a valid contact address on their tenancy agreements, something which could deem contracts being null and void

‘There has been an influx of new legislation relating to the rental market made in recent years and we know that UK landlords are struggling to keep on top of these changes,’ noted Adam Male, Co-Founder or Urban.co.uk. ‘Despite knowing many of the basics, many find it difficult to navigate the minefield of changing renting rights and wrongs and this is particularly so for accidental landlords.’[1]

Many landlords still not prepared for Right to Rent

Many landlords still not prepared for Right to Rent

Reassuring

Despite this perceived lack of understanding in some areas, thankfully, most landlords were found to be knowledgeable of most other rental issues. 77% were aware of the up-to-date Energy Performance Certificate requirements, with 95% of landlords able to identify their gas safety responsibilities.

76% of respondents knew their smoke alarm requirements, with 7% saying they put one in every room.

According to the research, the most knowledgeable landlords are located in Southampton, with the least located in Newcastle-under-Lyme.

Male went on to say, ‘it’s great to hear that knowledge about things such as gas safety is widely understood and implemented landlord legislation, however there is still a long way to go in educating landlords about the varying aspects of renting. New regulations such as the Right to Rent have the potential to stop back door lettings and create a better environment for all, however this will only happen if the scheme is communicated to landlords properly. We as an organisation want to do our bit to clean up the industry and help landlords protect themselves from significant financial risk.’[1]

[1] http://www.propertyreporter.co.uk/landlords/are-landlords-prepared-for-%C3%A3%C2%A2%C3%AB%C5%93right-to-rent%C3%A3%C2%A2%C3%A2%E2%80%9E%C2%A2.html