Posts with tag: RLA

Government should listen to suggestions of how to halt decline in rental housing

Published On: February 18, 2020 at 9:19 am

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Categories: Landlord News

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rental housing supply

The decline in the supply of rental housing remains an issue in the UK, and landlords say the Chancellor needs to use his first Budget to take immediate action.

More properties are being sold by landlords than purchased, and others are making the decision to switch to short-term holiday lets for tax reasons. Therefore, unless action is taken, tenants are going to find it increasingly hard to find the home they want.

Investment in new rental properties has been slowed by the introduction of measures such as the 2016 3% Stamp Duty levy, knocking the confidence of landlords across the country.

The drain in rental accommodation is only made worse by an incentivisation from the tax system for landlords to switch their properties to short-term lets. As a result, ARLA Propertymark is warning that almost half a million homes could be made unavailable for tents in need of long-term homes to rent.

In their submission for the Budget, the Residential Landlords Association (RLA) and the National Landlords Association (NLA) argue that the tax system entirely contradicts the Government’s housing objectives.

The RLA and the NLA are calling for a fundamental review of the way rented housing is taxed to ensure that tax policy supports, rather than contradicts, government objectives. Their proposal is for the Stamp Duty levy to be dropped where landlords add to the net supply of housing through developing new properties. This includes bringing empty homes back into use or converting large properties into smaller, more affordable units of accommodation.

The associations also propose that tenants are supported into homeownership by introducing a Capital Gains Tax exemption for when landlords sell a property to a sitting tenant.

In addition, they are calling for tax relief for landlords investing in measures to improve the energy efficiency of a rented property or those who let adapted properties long-term to tenants with accessibility needs.

David Smith, Policy Director for the RLA, comments: “The tax system for rented housing is failing. It encourages the provision of holiday homes over long-term properties to rent, it deters investment in new housing and provides no support to those wanting to make energy efficiency improvements. 

“For the sake of those living in rented housing or who are looking for accommodation, Ministers need to use the Budget to urgently change course to ensure that their tax policies are positively aligned with their wider housing objectives to encourage good landlords to provide long-term affordable housing.”

Chris Norris, Director of Policy and Practice at the NLA, said: “The tax system with which landlords must contend is no-longer fit for purpose. HM Treasury has constructed a series of barriers to investment, which make running an efficient and successful lettings business borderline impossible.

“As he prepares his first Budget, we hope that the Chancellor will take the opportunity to use taxation to encourage investment in new and existing homes alike. Mr Sunak must recognise that housing costs can only be reduced by making it easier, not harder, to provide good quality rented homes.  

“The emphasis must be on finding solutions and encouraging investment across tenures amongst a diverse range of providers.”

Government policy for rented housing is failing

Published On: February 14, 2020 at 9:10 am

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Government policy for rented housing is failing

Data released yesterday has demonstrated the failure of government policy for the private rental sector (PRS), landlords have claimed.

The Royal Institution of Chartered Surveyors (RICS) is warning that private sector rents are set to increase by 2% over the next year. This will be a result of the demand for such housing exceeding supply, as landlords start to leave the sector.

Recent tax increases, the restriction of mortgage interest relief to the basic rate of income tax, and the 3% Stamp Duty levy on the purchase of extra houses have already put pressure on many landlords.

Alongside this, the database of rogue landlords is being massively underused, with only 18 individual landlords and property agents and five companies being registered for offences committed since April 2018.

The Residential Landlords Association (RLA) points out that this means either the number of problem landlords is not as high as many have argued or local authorities are focussing too much time on licensing good landlords instead of rooting out the criminals.

On top of this, statistics published yesterday show that it now takes an average of almost six months for courts to process claims for repossession of a property.

The RLA argues that during this time tenants could be refusing to pay rent, behaving anti-socially or causing damage to the property.

John Stewart, Policy Manager for the RLA, said: “This series of statistics clearly show the negative impact of government policies. At the end of the day, it is tenants who are suffering. 

“The drop off in supply caused by good landlords who find operating in the market more difficult means it is increasingly difficult for tenants to secure somewhere to live and they are then faced with higher rents.

“Ministers need to change course and instead of attacking the private rented sector, there should be policies and taxation to encourage growth in the supply of rental accommodation to meet the ever-increasing demand.”

12-month contracts for tenants made mandatory by Welsh Government

Published On: February 12, 2020 at 9:35 am

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12-month contracts

It has been announced that 12-month contracts will become mandatory in Wales’ private rental sector (PRS), under the new Renting Homes (Amendment) (Wales) Bill.

This will mean that Welsh landlords can’t serve notice during the first six months of a new tenancy. The subsequent notice period will be extended from two months to six.

In the situation that a landlord wished to repossess their property, it will now take at least a year.

This new rule will only apply to ‘no-fault’ repossessions. Shorter notice periods will still be allowed for possession notices issued when a contract has been breached under current Section 8 rules.

RLA warning

The Residential Landlords Association (RLA) has warned that many landlords use the ‘no-fault’ repossession route when tenants are not paying rent, are making neighbours’ lives a misery or are wilfully damaging the property because the alternative is not fit for purpose.

Douglas Haig, RLA vice chair and director for Wales said: “While we acknowledge the minister has recognised the complete removal of Section 21 would be bad for the sector, we are disappointed with today’s proposals.

“It is absolutely essential that landlords with a legitimate reason to repossess their property are able to do so.

“If they do not many could opt to leave the market altogether – leaving renters with fewer options and potentially pushing rents up.

“The government says that those with grounds to repossess can still give the shorter notice period using Section 8.

“However, RLA research shows 83% of landlords who used Section 21 had done so because of rent arrears alone. Over half had experienced anti-social tenants. 

“This proves that despite having grounds to evict landlords are currently five times more likely to use the ‘no fault’ Section 21 notice, due to the lengthy court waiting times and expense associated with Section 8.

“Despite this, proposals do not include any plans to reform the grounds process, something we believe is vital before any change of this kind is made, to avoid a devastating cut to the supply of homes to rent in Wales at a time when demand continues to grow.”

When will the law change?

Following a consultation that took place last year, the new law has now been introduced before the Senedd by Minister for Housing and Local Government Julie James.

The Minister says this will provide greater security for tenants in the PRS, while still allowing landlords to take back their properties ‘in a timely manner’ where the tenant is at fault.

The Bill amends the Renting Homes (Wales) Act 2016. It is anticipated to come into force in the spring of 2021.

Announcing the change, the Housing Minister said: “The new Bill I am unveiling today will add further significant protections for those who rent their home in Wales to those already included in our landmark Renting Homes legislation.  

“These include, ensuring that a possession notice where there is no breach of contract cannot be served for the first six months of occupation, and where possession is sought, giving the contract holder six months’ notice. 

“This will provide valuable time for individuals and families faced with possession under section 173 and the organisations and agencies that support them, to find a new home that is right for them and make all necessary arrangements for a smooth transition to their new home.    

“I believe the Renting Homes (Wales) Act, as amended, will provide a sound basis for renting in Wales: balancing the needs and rights of both tenants and landlords and helping ensure our PRS is a well-managed option for households.” 

ARLA Propertymark comments

David Cox, Chief Executive of ARLA Propertymark, says: “Extending notice periods from two months to six months under the Renting Homes (Amendment) (Wales) Bill will cause further shockwaves for landlords and agents. The proposals will make it even more difficult for landlords to reclaim possession of their property and add further longevity to an already lengthy and expensive eviction process.

“We are concerned that landlords will have no viable option of evicting problem tenants quickly and efficiently due to current court procedures. If landlords sell up due to the perceived risk, this will shrink the sector and contribute to landlords being more selective about who they let their property to.

“The Welsh Assembly must reconsider extending the minimum notice period and take a long-term, holistic view that supports those who are providing professional and well-managed tenancies.”

EU citizens should have physical proof of right to rent

Published On: January 27, 2020 at 9:06 am

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Categories: Tenant News

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proof of right to rent

Proposals have been made to help prevent EU citizens with settled status from facing severe difficulties accessing healthcare, housing and employment post Brexit. 

Last week, The House of Commons voted on an amendment passed in the House of Lord to the EU Withdrawal Bill. This will require EU citizens to be given a physical status document to prove their right to rent a property and work in the UK.

The Joint Council for the Welfare of Immigrants, the3million and the Residential Landlords Association (RLA) believe that without this amendment there is a risk of landlords and employers being reluctant, without immediate physical proof of their status, to let a home or offer a job to EU citizens.

Under the EU Settlement Scheme, the Government plans only to give EU citizens a digital code to prove their residency for landlords and employers to look up online.

Joint Council for the Welfare of Immigrants previously undertook research on the Government’s Right to Rent policy. 150 mystery shopping enquiries from prospective tenants asked landlords to conduct an online status check. 85% received no response and only three responses explicitly stated that the landlord was willing to conduct an online check.

It also found that landlords were far happier to respond positively when the tenant could provide a clear physical document proving their status.

A report published by the3million last week also week found that 89% of EU citizens are unhappy about the lack of a physical document.

Calls for EU citizens to be given such a document have been made also by the Exiting the European Union Select Committee, the Home Affairs Select Committee and the House of Lords EU Justice sub-committee which warned to the “parallel with the lack of documents contributing to the Windrush scandal.” 

In a joint statement, the Joint Council for the Welfare of Immigrants, the3million and the RLA, said: “MPs should back what is a pragmatic and common-sense proposal.  

“It should not be controversial that EU citizens who have played such a positive role to the life of the UK should be able to easily prove their rights with a physical document. A digital-only status will massively disadvantage EU citizens against British nationals with a passport, and anyone else who can quickly and conveniently prove their status with a simple official document.”

Upcoming change to housing allowance not enough to help tenants

Published On: January 14, 2020 at 9:35 am

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Categories: Tenant News

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Upcoming change to housing allowance not enough to help tenants

Last year we shared the news that the Government plans to end the freeze on housing benefits. However, there is concern that this may not be enough to help tenants.

The Residential Landlords Association (RLA) believes that many tenants might still be left unable to afford their rent.

This concern follows the announcement that from April the Local Housing Allowance (LHA) will increase by inflation, as measured by the Consumer Price Index. The RLA points out that the Allowance has been frozen since 2026. Therefore, this rise of around 1.5% is bound to leave tenants considerably out of pocket.

The LHA was introduced in 2008 in order to calculate housing benefit for those living in private rented accommodation. Prior to 2016, the LHA was based on enabling a tenant to afford to rent a home in their area. It was calculated that 30% of homes available should be cheaper and 70% more expensive. 

We’ve all seen how rents have moved in different areas over the years. Some have had steeper increases than others, instead of a flat rate increase. Because of this, the RLA is calling for the LHA to again be based on this 30th percentile level.

John Stewart, Policy Manager for the RLA, has commented: “The benefit level needs to reflect the realities of the level of rents locally. Given rents have risen by an average of 5%, and in some areas more than that over the last 4 years, a rise of 1.5% in the benefit level is not going to be much help to a tenant struggling to afford the rent in those areas and many others.

“If it really wants to help tenants, the Government should restore the direct link between rent levels and the LHA instead of a paltry flat rate increase.”

Funding to tackle criminal landlords welcomed but nowhere near enough

Published On: January 6, 2020 at 10:06 am

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Funding to tackle criminal landlords

The provision of Government funding to root out criminal landlords may be welcome but is it enough to tackle the scale of the problem? The Residential Landlords Association (RLA) does not think so.

With ministers confirming yesterday that more than 100 local authorities in England will share £4 million in new funding, the Government is expecting this to help “crackdown on criminal landlords”.

This focus on rooting them out has been welcomed by the RLA, but the organisation warns that the amount is nowhere near enough to tackle the crooks.

For some time now it has been raised to Ministers by the RLA that proper, multi-year funding needs to be provided for councils. This will enable them to plan long-term strategies to permanently root out criminal landlords who are bringing the sector into disrepute. This must involve sufficient funds to boost the number and skills of Environmental Health Officers.

David Smith, Policy Director for the Residential Landlords Association, has commented: “We welcome the Government’s focus on rooting out criminal landlords. 

“For too long the debate has been driven by ideological calls for more regulation of the sector. What is needed is better enforcement of the powers already available to tackle the minority who bring the sector into disrepute.

“Today’s (Thursday 2nd January 2020) funding though is nowhere near enough. Instead of offering inadequate and sporadic pots of money, it is critical that the Government provides proper, multi-year funding to enable councils to plan and prepare workable strategies to find the criminal landlords. 

“This should be supported by councils having the political will to prioritise enforcement against the crooks rather than tying good landlords up in licensing schemes which do nothing to protect tenants.”