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Negligence towards rogue landlords-reports

Published On: October 19, 2015 at 12:01 pm

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Categories: Landlord News

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The image of the private rental sector has been tarnished in this weekend’s press, with a number of reports on the alleged poor condition of homes to let.

Both The Guardian and The Independent published articles on a Citizens’ Advice Bureau survey which suggested that private landlords are raking in a cumulative total of £5.6bn per year in rent on homes that do not come up to required legal standards. Around one quarter of this sum is said to come from housing benefit payments.

At risk

Alarmingly, the Citizens’ Advice Bureau report suggests that as many as 740,000 families in the English private rental sector are currently living in homes that present a threat to occupants’ overall health and wellbeing.

In addition, The Times has reported on an investigation by charity group Shelter that suggests that number of people living in accommodation unfit for human habitation is larger than 250,000.

What’s more, the newspaper also reports than in excess of 25% of English councils have not prosecuted any landlords for providing inadequate accommodation during the last five years. A further half reportedly prosecuted less than two per year.

Negligence towards rogue landlords-reports

Negligence towards rogue landlords-reports

Failures

Figures in The Times report, sourced from the Residential Landlords’ Association and a Freedom of Information request, indicates that councils have prosecuted just 2,006 landlords during the last eight years. The average penalty was a fine of £1,5000.

David Smith of the RLA noted that, ‘tenants and good landlords are being let down. Councils have plenty of powers to enforce standards in private rented housing and tackle criminal landlords. It is sad that at best the record on enforcement is patchy and at worst, non-existent.’[1]

Housing Minister Brandon Lewis also added that, ‘the Government is determined to crack down on rogue landlords and the housing bill strengthens councils’ powers to tackle poor-quality privately rented homes in their area.’ He concluded by saying that, ‘our measures include blacklisting landlords who have been convicted of serious offences and seeking banning orders for the most prolific offenders.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2015/10/surveys-highlight-councils-negligence-on-tackling-rogue-landlords

 

 

 

Local Authorities Don’t Do Enough to Tackle Rogue Landlords

Published On: October 19, 2015 at 10:59 am

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Over a quarter of local authorities in England have failed to prosecute any rogue landlords in the past five years and a further half have prosecuted less than two a year.

In total, just 2,006 criminal landlords have been convicted in the last five years, with an average fine of £1,500.

Local Authorities Don't Do Enough to Tackle Rogue Landlords

Local Authorities Don’t Do Enough to Tackle Rogue Landlords

The statistics were collected after a Freedom of Information request from the Residential Landlords Association (RLA).

Policy Director of the RLA, David Smith, comments: “Tenants and good landlords are being let down.

“Councils have plenty of powers to enforce standards in private rented housing and tackle criminal landlords. It is sad that at best the record on enforcement is patchy and at worst non-existent.”

The RLA is campaigning for councils to abolish landlord licensing schemes and use existing powers to tackle criminal landlords.

It notes that the new Housing and Planning Bill, which will introduce a register of rogue landlords and letting agents, will boost these powers, as well as implementing a legal measure to ban criminal landlords and agents from the industry.

The RLA believes that the bill will make licensing schemes unnecessary, as councils will be able to request information about tenure and landlords on Council Tax forms.

Smith adds: “The Housing Bill makes clear that landlord licensing schemes are not needed and serve only as a money raising exercise by councils.

“Local authorities now have serious questions to answer. Why are they charging good landlords when they can collect the information they need to drive out criminal landlords using Council Tax registration forms for free.”1

Citizens Advice reports that criminal landlords are cheating the benefits system.

Chief Executive Gillian Guy says: “Dodgy landlords make as much as £5.6m a year from renting out homes that don’t meet legal standards and £1.3 billion of this bill is picked up by the state in the form of housing benefit.

“Tenants are having to pay soaring rents despite severe damp, rat infestations and even the risk of explosions.”1

Housing charity Shelter claims that around half a million private rental homes are in a bad condition, including damp, mould, electrical hazards and infestations.

Campbell Robb, Shelter’s Chief Executive, insists: “The Government must do more to protect renters from the rogue landlords who let out these shoddy properties, so that every renter can feel safe in their own home.”1 

1 http://www.propertyindustryeye.com/local-councils-slammed-for-not-going-after-criminal-landlords/

 

Buy-to-let investment yields 10% per year

Published On: October 19, 2015 at 10:49 am

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There has been encouragement for buy-to-let investors with the news that there were average returns of almost 10% in England and Wales over the last twelve months.

The latest Buy-to-Let Index from Your Move and Reeds Rains shows that landlords saw gross yields rise to 5.2%, while spiralling property prices increased total average yields to 9.4%.[1]

Record Rents

Additionally, the Index shows that rents rocketed to an all-time high of £816 per month in September, in comparison to £768 at the same period last year.

What’s more, rents in London, the South-East, South-West. East and West Midlands also soared to regional records. On average, rents rose by 6.3% during the last twelve months, despite consumer price inflation becoming negative. [1]

Rents in the capital are rising at the highest rate, up by 11.6% over the year to stand at a new record of £1,301 per month.[1]

Real terms

Cumulatively, the different with inflation is much sharper. Rents are now 24.4% greater than in January 2010, with the index of CPI inflation just 14.1% higher. In real terms, rents have risen by 10.3% since the beginning of the decade.[1]

Buy-to-let investment yields 10% per year

Buy-to-let investment yields 10% per year

In addition, despite rising rents, tenant finances have also grown, with rent arrears dropping to 8.6% of all rent due.

Adrian Gill, director of Reeds Rains and Your Move, noted that,’ rents are rising strongly in real terms due to the recent acceleration in wages and the much deeper and longer-term shortage of available properties across the UK.’[1]

‘Meanwhile, as the price of everyday essentials plateaus and even falls, rents are no longer following the same broad trends,’ Gill continued. ‘The cost of a place to live has now uncoupled from the cost of living.’[1]

Gill continued by stating, ‘as long as this supply and demand imbalance keeps up, it is hard to see any reversal in the speed of rent rises.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2015/10/buy-to-let-investors-earn-near-10-a-year

 

The Rise of the 50+ Renter

Published On: October 18, 2015 at 11:35 am

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We’re all aware of the housing crisis, that it is affecting Londoners the most, and that generation rent is still struggling to get onto the property ladder. But how many are aware that those over 50-years-old are also suffering?

A quarter of those aged between 50-64 live in rental accommodation, according to the latest Office for National Statistics (ONS) report on homeownership and renting in England and Wales.

The Rise of the 50+ Renter

The Rise of the 50+ Renter

Furthermore, flatsharing website SpareRoom.co.uk has found that in the last five years, the amount of 55-64-year-olds living in flatshares has increased by 343%. In the over 65s category, there has been a surge of 600%.

The site revealed that around one in ten flatsharers using the service are over 45, taking the average user age to almost 29-years-old.

Director of SpareRoom, Matt Hutchinson, says this trend is becoming increasingly common: “Whether we like it or not, we’re being forced to rethink our aspirations of homeownership as Britain moves towards becoming a nation of renters.

“Property prices are already out of reach for many first time buyers and increasingly, we’re seeing older renters opt for house and flatshares over renting solo in one-bed flats.”1

And things don’t appear to be getting any better. Around 45% of people who are currently renting fear that they will never be able to afford their own home, according to data from the Post Office. One in four revealed that they don’t think they will be able to save for a deposit on their current wage, while a further 17% believe they won’t be able to meet monthly mortgage repayments.

As a consequence, the average first time buyer age is rising.

Head of Mortgages at Post Office Money, John Willcock says that the market is moving further out of reach for hopeful first time buyers: “The average age at which non-homeowners expect to get a foot on the property ladder has increased to 36 over the past year, which is a worrying trend.

“It is clear that there is still a long way to go to inspire confidence in the first time buyers’ market, with nine million feeling they won’t ever be able to buy their own property.”

As private tenants spend around 50% of their monthly income on rent, Willcock adds that saving a deposit is the “biggest hurdle”1 for prospective buyers.

Housing crisis commentators believe that student loans are a growing problem, stating that it is not fair or feasible to expect graduates to save for a home while paying off their debt.

And despite schemes that support homeownership, such as Help to Buy, most have a maximum age limit, meaning many affected by the housing crisis are still stuck in flatshares.

1 http://www.telegraph.co.uk/goodlife/11896033/Living-in-a-flatshare-in-your-50s.html

London Tenants Must Pay £25,000 Deposit Premium for Having a Pet

Published On: October 17, 2015 at 10:57 am

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A lack of rental properties that permit pets has caused a huge price premium on deposits, according to recent research from a leading letting agent.

Prime central London agent EJ Harris conducted a Pets & Pads survey. It revealed that over the last five years, the amount of tenants with dogs in the capital has risen substantially. Additionally, a lack of supply of flats that allow pets is causing huge price premiums on deposits.

London Tenants Must Pay £25,000 Deposit Premium for Having a Pet

London Tenants Must Pay £25,000 Deposit Premium for Having a Pet

EJ Harris has experienced a significant increase in enquiries from dog-owning tenants. A decade ago, none of its tenants had dogs in London. Five years ago, 2% owned dogs. Three years ago, this was up to 5%, and doubled to 10% in 2013. Last year, it had grown to 20% and this year, 30% of all tenants looking for a rental home in the capital are dog owners.

EJ Harris states that rental accommodation supply is not keeping up with the growing demand for pet-friendly property. The firm found that 40% of all prime central London flats do not allow dogs, a condition that is written into the head lease.

The imbalance between demand and supply of pet-friendly homes has led to huge price premiums being demanded on deposits of flats that allow pets. The higher deposits are required to cover any damage caused by the pets.

EJ Harris revealed that on a one-bedroom flat in central London with a rent of £500 per week, the average deposit for a non-pet owning tenant is £3,000, compared to £5,000 for a tenant that has a dog.

On a two-bed apartment let for £1,000 a week, the typical deposit is £5,000, compared with £10,000 for a dog-owning tenant.

For a three-bed flat costing £2,500 per week, the deposit is £15,000 for an ordinary tenant, and £25,000 for a pet owner.

Furthermore, EJ Harris found that most London landlords that allow pets also include a professional cleaning clause in the tenancy agreement, which requires pet-owner tenants to make an additional, non-refundable payment at the start of the tenancy to cover the costs of sanitation and professional cleaning when they move out.

Managing Director of EJ Harris, Elizabeth Harris, explains the data: “We have seen a significant rise in the number of dog-owning tenants looking for private rental accommodation in central London.

“These tenants want luxury pads situated close to Hyde Park or the Regent’s Park, where they can regularly take their pets for walks.

“Despite the stigma surrounding tenancies with pets, in our experience, tenants who own dogs make for reliable and responsible tenants who take good care of the property and keep their pets pampered and well trained. We always advise dog-owning tenants to create a pet CV that provides a detailed description of the pet and outlines key facts regarding behaviour, health and grooming, which can help alleviate the landlord’s concerns.”1

Do you rent property to pet owners? If so, are there any conditions you require?

1 https://www.landlordtoday.co.uk/breaking-news/2015/10/25k-premium-for-a-pad-with-a-pet

Baby Dies After Family is Evicted Over Rent Arrears

Published On: October 16, 2015 at 4:51 pm

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Baby Dies After Family is Evicted Over Rent Arrears

Baby Dies After Family is Evicted Over Rent Arrears

A premature baby died the night his family was evicted from their home by agencies that were not aware of the potential consequences of their actions, a serious case review reveals.

The ten-week-old baby was forced to leave his home with his parents and one-year-old sister after the family fell into rent arrears.

He slept with a parent on his grandparents’ sofa that night, but by the next morning, he had died. A coroner recorded an open verdict over the death, and the serious case review confirmed there was no mistreatment.

However, Warwickshire County Council discovered that agencies, including social services and NHS workers, could have done more during the September 2013 eviction.

Joanna Nicolas, author of the report, states: “Agencies had not fully understood the issues and could have done more to mitigate the impact of the eviction.”1

If your tenants are struggling, here’s some advice on how you can help: /landlords-and-tenants-should-work-to-cut-rent-arrears/ 

1 Tahir, T. (2015) ‘Baby dies after his family are evicted’, Metro, 15 October, p.14