Since March, all tenants – whether in private or social accommodation – can now sue their landlords if their homes have health-damaging defects. This is thanks to the Homes (Fitness for Human Habitation) Bill 2017-2019, which came into force for new tenancies from 20 March 2019 and, from now, applies
Estate and Letting Agents in the UK are being urged to check that they are signed up with an approved redress scheme that covers the full remit of their work. The warning follows a recent tribunal that penalised a business that was signed up to a redress scheme for its
Reposit, the company changing the way landlords, agents and tenants handle deposits, has announced its latest partnership with property management company Way of Life, providing all customers with an alternative to the tenancy deposit schemes. The InsurTech firm operating in the PropTech space, has also unveiled an extension of its
A brand new subscription model for the incoming tenant fee ban has been launched by online letting agency MakeUrMove. With just £12 per month on the ‘Good Landlord’ subscription, landlords will have access to a wide range of services, including Rightmove and Zoopla advertising, tenant referencing, rent collection, legal eviction services,
It takes an average of 118 days for court-appointed bailiffs to evict tenants from private landlords properties after bringing a claim to court. Landlords in London are the most likely to have to evict, while those in the South West, North East and West Midlands were least likely to
Despite the regulations the landlords must follow, there has been new research that claims that gas safety checks are slacking within the UK’s five million privately rented properties. It’s also, not just property owners that are slacking, small business energy users are also in the firing line as one in
More than 400,000 landlords (22%) who pay the basic rate of tax will be forced into a higher tax bracket from April next year as planned changes to landlord taxation come into force. The changes, once fully phased in over the next five years, will mean that landlords will no
According to the latest findings form the National Landlords Association (NLA), more than a third of landlords (35%) believe that leaving the EU will have a negative impact on their ability to attract tenants in the future. The findings also reveal that 39% believe that Brexit will not have a
Jackson-Stops & Staff, one of the UK’s leading estate agents, has released new information that suggestions as to the reform of stamp duty on second homes, may actually fail to achieve the goal of putting off buy-to-let investors. The information, in effect shows that inflation in housing prices may actually
Landlords are warned to take a closer look a t the upcoming EU Mortgage Credit Directive, the new piece of European Union legislation which, in effect puts a halt to “risky” mortgage lending. And placing an additional emphasis on landlords, the legislation also reassesses the definition of landlord mortgages as
BDC 319 : Aug 2024
Since March, all tenants – whether in private or social accommodation – can now sue their landlords if their homes have health-damaging defects. This is thanks to the Homes (Fitness for Human Habitation) Bill 2017-2019, which came into force for new tenancies from 20 March 2019 and, from now, applies to existing, historic tenancies too. “Landlords have had 12 months to consider the implications of the act”, says Hudson Lambert, managing director of Safeguard Europe – the UK’s leading specialist in damp and waterproofing, and masonry repair solutions – “and they’re running out of time to improve these properties before the law starts to bite. Our advice to any that haven’t done so is to assess properties as soon as possible and make the necessary repairs or modifications. No one should be living in homes that are damaging to health.” The Act sets out a raft of issues which, if defective, could cause harm to tenants, including proper ventilation and freedom from damp. The presence of damp and poor ventilation can both promote mould growth, and the relationship between ill health, damp and mould and the negative impact on respiratory health are well established. The English Housing Survey 2018-2019 found that 7% of private rented dwellings and 5% of social housing had some sort of damp problem. In certain sectors, that figure appears to be much higher. Research by the National Union of Students published in February 2019 found that 35% of students were living in rented accommodation with damp and mould. Previously tenants with damp and mould problems could attempt to legally address them by pursuing a statutory nuisance notice with local authority environmental health officers. However, the response to council intervention from landlords has often been to begin eviction proceedings against the tenants, which deterred tenants from complaining. Under the new regime, tenants can sue landlords, not only to force them to fix health-damaging defects, but also for compensation. The courts will decide on the timeframe for any required works, and what the level of compensation will be. For landlords and their advisors seeking expert advice on damp, Safeguard offers a CPD seminar programme on the major causes and effective treatments. The headline CPD, the RIBA-accredited Dealing with Dampness, is an overarching introduction to the problems of rising and penetrating damp that will give landlords, specifiers, builders and others enough information to help them tell the difference between the two and determine sources, while giving options on how to act to cure the problem. For details of Safeguard’s CPD programme, visithttps://www.safeguardeurope.com/training-courses/cpd-seminars
Estate and Letting Agents in the UK are being urged to check that they are signed up with an approved redress scheme that covers the full remit of their work. The warning follows a recent tribunal that penalised a business that was signed up to a redress scheme for its letting agency work but not for its property management work. In one of the first decisions of its kind, the Upper Tribunal* upheld a fine of £3000 against the business for its failure to belong to an approved redress scheme for property management. Its membership of the Property Ombudsman Scheme covered it for residential sales and lettings, commercial sales and lettings and some property management, but not for residential leasehold management. The decision has prompted National Trading Standards to issue guidance to Estate and Letting Agents across the country, focusing on agents ensuring their redress scheme covers all areas of their work, whether it’s sales, lettings or property management work. James Munro, Head of National Trading Standards Estate and Letting Agency Team, said: “We’re urging all estate and letting agents to double-check their redress scheme to ensure it covers the full breadth of their work. If you’re already signed up to a redress scheme, you may think your business is covered, but you should check that this covers the full breadth of your company’s activities. The recent tribunal decision shows businesses that are signed up to redress schemes for one area of their work but not for others may face hefty penalties in the courts.” Failure to be a member of a redress scheme, when legally required to do so, could result in a penalty notice being issued against the business. The two approved redress schemes are: Property Redress Scheme www.theprs.co.uk The Property Ombudsman www.tpos.co.uk Sean Hooker, Head of Redress at the Property Redress Scheme, said: “Whilst PRS membership covers most agents for all the work they do, they must tell us from the outset the areas they undertake work in so we can record this under their membership. Agents must also ensure that all their branches and offices are registered separately and the appropriate fee paid. If you are in any doubt whether you are fully compliant please contact us immediately” Katrine Sporle, Property Ombudsman, said: “TPO’s online membership and website provides detailed information about the categories of work TPO provides redress for, the options available, and clarity around the need to be registered for each category. Our membership team is on hand to give support and advice for new and existing members alike, so do please contact us if there is anything you are unsure about or need guidance on.” GUIDANCE FOR ESTATE AND LETTING AGENTS Make sure that your business is signed up with an approved redress scheme for the correct line of work (Sales, Lettings or Property Management Work). Review your existing terms of agreement/membership to ensure your redress scheme covers the full activities of the business. Check the terms of agreement/membership to confirm if your business is required to pay membership for individual branches. As of 1st April 2019, Letting and Property Management Agents in the private rented sector are required to belong to a Client Money Protection (CMP) scheme if holding client money. If you’re an Agent who is required to belong to a CMP scheme, you should be displaying a certificate of your membership at your premises and online. CMP schemes should all be providing certificates. If you’re having difficulty in obtaining a certificate, please contact CMPschemes@communities.gov.uk
Reposit, the company changing the way landlords, agents and tenants handle deposits, has announced its latest partnership with property management company Way of Life, providing all customers with an alternative to the tenancy deposit schemes. The InsurTech firm operating in the PropTech space, has also unveiled an extension of its cover from six to eight weeks, covering all bases from rent arrears to cleaning and damages costs. Founded in 2015, Reposit is the creator of the growing deposit replacement sector in residential lettings, providing customers with an alternative to the standard tenancy deposit. Reposit eases cash flow problems for renters by enabling them to secure a property with just one week’s rent. Way of Life is a property management company currently managing over 550 homes in the UK, with another 300 launching this summer. Its customers enjoy a tailored service from point of enquiry, throughout their stay and until they move on to the next stage of their life. Way of Life customers are given the choice of purchasing a Reposit with just one week’s rent, plus an annual fee of £30 should they stay for more than one year in their home. Way of Life becomes a named beneficiary on the Reposit insurance policy and is protected for up to eight weeks’ rent, for anything a traditional tenancy deposit would have covered. “We want to offer an excellent level of service to our customers. Finding an alternative deposit option was always high on our agenda. After looking at the various deposit replacement offerings, we have chosen to partner up with Reposit to offer a viable option to our customers. It’s ease of integration into our services and the dedication towards compliance under FCA regulation and FSCS protection made the choice easy in the end,” said Way of Life’s Managing Director, Sowgol Zarinchang. Way of Life’s partnership with Reposit comes just before the opening of its new £37 million development in Birmingham, The Lansdowne, which comprises 206 apartments and more than 10,000 sq. ft of shared social spaces including a lounge with big-screen entertainment facilities, a quiet room, a broadband-equipped workspace, a fitness studio and a rentable private party room and kitchen. All customers are invited to choose a Reposit or traditional deposit when signing up. Reposit is also today announcing that it has increased its length of cover to eight weeks, the longest complete cover in the industry. A number unmatched by traditional deposits as government legislation for rent under £50,000 per year is capped at five weeks and six weeks for rent over £50,000. According to recent figures published by the Tenancy Deposit Scheme, the average rental deposit in England and Wales is £1,041, whilst in London, it is typically £1,750. Reposit’s market research data of 1,000 tenants, found that 91 percent of tenants have paid a deposit, with 49 percent claiming they borrowed from family, loans or even payday loans. For people moving between properties, they are expected to provide the deposit for the new contract before an old deposit has been released, causing further cash flow problems and added stress.
A brand new subscription model for the incoming tenant fee ban has been launched by online letting agency MakeUrMove. With just £12 per month on the ‘Good Landlord’ subscription, landlords will have access to a wide range of services, including Rightmove and Zoopla advertising, tenant referencing, rent collection, legal eviction services, property licence checking, as well as documents and renewals. “The tenant fee bill is going to affect the whole property industry. The most innovative agents will look to technology to reduce costs. We’re at the forefront of this as the first agent to come out and support the tenant fee ban. As a tech platform, we’re constantly developing and will be adding new features as standard to our package. We want to be a landlord platform rather than a letting platform,” said Alexandra Morris, Managing Director at MakeUrMove. Moreover, the subscription offers optional bolt ons, such as guaranteed rent for up to six months in the case of a tenant failing to pay and annual gas safety certificates, for a small additional cost. MakeUrMove conducted a research that showed 25% of landlords and a staggering 85% of tenants didn’t understand the upcoming ban. “We’re confident that our new subscription model will do this, while providing peace of mind and security for landlords, knowing that they will pay a fixed cost of £12 per month with no prices increases over the term of their subscription, as well as benefiting from referencing, legal eviction cover and renewals included as standard. This whole focus behind these packages is to try and mitigate costs for landlords when it comes to having an empty property, as well as supporting them and reducing the risk of non payment of rent,” explained further Alexandra. The £12 per month subscription model will be offered alongside a basic package, which will include advertising and one downloadable tenancy agreement. There will also be a standard package offered at a one-off cost of £96, which will also include tenancy documents and deposit lodging, rent collection for 12 months and advertising with the major property portals.
It takes an average of 118 days for court-appointed bailiffs to evict tenants from private landlords properties after bringing a claim to court. Landlords in London are the most likely to have to evict, while those in the South West, North East and West Midlands were least likely to have to go all the way to court to secure their evictions. Landlords can see at a glance how their region fares here. New analysis of government figures by Simple Landlords Insurance shows it took an average of 16.9 weeks from claim to bailiff eviction in the first quarter of 2018. A total of 21,429 possession claims were brought to court last year, of which 6,260 ended in eviction by bailiff. It’s the first time that the length of time it takes for private landlords to evict through the court system has been made public – and it’s been broken down by region and population density so landlords – and tenants – can find out exactly what level of risk they face in each area of England and Wales. Tom Cooper, Director of Underwriting at Simple Landlords Insurance, says: “The good news for everyone is that in 2017 only 0.5% of landlords made a possession claim in court. And only a third of those had to go through to the bitter bailiff end. The bad news is that if it does happen to you, it can cost a lot of money – and not just the average £1,700- £2,000 in legal fees. “We wanted to get a more realistic idea of the impact of the process in terms of lost income, inconvenience, and ongoing legal fees in the worst and longest case scenarios. Just looking at lost rent, there are few landlords who can afford to lose up to 6 months’ worth – the time it takes for a tenant to go into arrears, for them to issue a Section 21 notice, and then for them wait 17 weeks to see the court process through.” Key findings The headlines for landlords include: During 2017, private landlords brought 21,439 possession claims to courts in England and Wales. 27% of claims didn’t receive a court order. Many claims are rejected for failing to follow the correct eviction proceedings. The average insurance payment made for eviction support is £4,341.22, which includes legal expenses and lost rent. Landlords in London are more likely to have to evict a tenant, the figures show. Buy-to-let investors in the capital brought 195.3 claims per 100,000 households last year. Landlords in the South West of England were least likely to bring eviction proceedings to court, with 58.9 claims registered per 100,00 households, followed by the North East and West Midlands. It took longer for social housing providers to evict tenants, with an average claim-to-repossession time of 27.9 weeks vs 16.9 for private landlords. The eviction timeline The Ministry of Justice figures revealed it took an average of 6.9 weeks for a private landlord’s claim to result in the issue of an order requiring a tenant to leave the property. For those whose tenants stayed past the date given on the notice, it took an additional 3.2 weeks from the initial order to the granting of a possession warrant, and a further 6.8 weeks for a bailiff to take possession of the home if the claim went to the final stage making the total 16.9 weeks. Rent arrears and legal expenses Landlords can mitigate the risk of lost income, time and property damage if they have to bring possession proceedings to court with legal expenses insurance and rent guarantee insurance. Legal expenses insurance helps landlords navigate the evictions process, including serving an eviction notice correctly, and legal support in court. Simple Landlords Insurance’s product includes 24/7 access to advice from its legal partners and costs £39.50 per year. Rent guarantee insurance compensates landlords for the income they lose over the many months an eviction process can take, as well as the legal fees for pursuing an eviction through the court system, with premiums from £79.99 a year (based on the monthly rental income a landlord wants to cover). Tom Cooper added: “We know that rent arrears are high up on the list of landlord worries. Possession claims by private landlords have risen by 3.5% in the last two years. Over the same period we’ve seen a 61% increase in take-up of rent guarantee insurance in addition to legal expenses cover as landlords feeling the pinch from tax and regulatory changes try to mitigate the risk of repossession.” More detail on the analysis can be found here.
Despite the regulations the landlords must follow, there has been new research that claims that gas safety checks are slacking within the UK’s five million privately rented properties. It’s also, not just property owners that are slacking, small business energy users are also in the firing line as one in five are failing to have an annual gas safety check which could invalidate their insurance. It’s important that gas safety is taken serious and it’s not just about ticking the right boxes. A poorly fitted gas appliance can cause fuel leaks, fires and even explosions, as well as carbon monoxide poisoning. As a result, landlords who fail to comply with gas safety regulations can face tens of thousands of pounds in fines. With so many properties in the UK, and many lives-at stake, are the UK’s gas safety rules simply too lax? And how can landlords make sure their premises stay safe? Are we doing enough when it comes to gas safety? Currently, the gas safety regulations that impact landlords differ from place to place. Under the Landlord Licence Scheme, landlords must prove they’ve met the legal requirement for an annual gas safety check in all their properties before they can let them out. However, just 40 local authorities across the country currently operate a Landlord Licence Scheme in their area. This discrepancy has created a ‘postcode lottery’ when it comes to gas safety. It’s true that most landlords are quite aware of what’s required to keep their properties maintained and their tenants safe – yet there are still many properties being neglected by landlords who carry out suspect DIY heating repairs or skipping annual gas checks altogether. What’s more, with 7,500 unregistered gas fitters responsible for 250,000 illegal gas jobs in the UK every year, rogue traders are still very much a problem nationwide. As well as the limitations of the current rules and regulations, there’s also a lack of awareness amongst energy users to contend with. For example, a shocking number of small businesses that are using mains gas are failing to stay on top of gas safety in the workplace. In fact, a recent survey found that 23% had no idea that their gas appliances need to be checked on an annual basis – and a worrying 18% haven’t had a visit from a Gas Safe Engineer in the last year. What gas safety regulations mean for landlords With so many factors at play, the landlord’s role in keeping properties gas safe is crucial. So, how can landlords ensure their premises are fit for purpose – and keep energy users in the loop? Business gas supplier Flogas Energy gives a rundown of the steps to take: Keep all gas appliances and systems properly maintained This means always using a Gas Safe registered engineer to service your boiler and any other gas appliances, and to maintain any gas pipework and chimneys or flues. The manufacturer’s instructions should outline how often appliances should be serviced, but if these are not available then the Gas Safe Register recommends servicing once a year. Appliances owned by tenants don’t fall within this remit, and neither do flues that connect only to tenants’ appliances. Carry out an annual gas safety check You must arrange for a full gas safety check once a year – this is carried out by a Gas Safe registered engineer and covers all gas appliances and flues. Again, you don’t need to organise checks for any of your tenants’ own appliances (or flues that connect only to appliances owned by the tenant). Keep a record of all checks (and provide copies) All gas safety checks carried out in your property must be recorded on a Landlord Gas Safety form. As well as keeping a copy for yourself (for at least two years, or until a further two checks have been carried out), you must provide your tenants with their own copy within 28 days. For new tenants, it’s at the start of the tenancy, and for any rental periods shorter than 28 days, simply display the record in a prominent place in the property. What’s new in 2018? As of April this year, new regulations have been introduced that allow landlords to arrange their annual gas safety check up to two months in advance without impacting on the expiry date of the existing certificate. You can now arrange a new check any time within 10-12 months of the last one – and when the old certificate runs out, the new one will simply run for the next year. If for any reason you need to carry out a gas safety check less than 10 months (or more than 12 months) after the last one, the expiry date will be a year from when your new certificate is issued. It’s worth noting that landlords who make use of the new rules must keep their gas safety records until two further gas safety checks have been carried out. This new ‘MOT-style’ approach allows landlords to arrange a new check in plenty of time before the old one expires (without shortening its lifespan) – instead of rushing to book a visit from a Gas Safe engineer just before the deadline. It also makes it easier to keep track of renewal dates, as these stay the same each year. Because of this, the new 2018 rules have been welcomed by landlords. They’re a way to uphold the very highest gas safety standards – whilst making the checks process more flexible and straightforward all round. To find your local Gas Safe registered engineer, visit: www.gassaferegister.co.uk.
More than 400,000 landlords (22%) who pay the basic rate of tax will be forced into a higher tax bracket from April next year as planned changes to landlord taxation come into force. The changes, once fully phased in over the next five years, will mean that landlords will no longer be able to deduct mortgage interest payments or any other finance-related costs from their turnover before declaring their taxable income. At present, mortgage interest payments are one of a number of expenses that landlords can deduct as a business cost, including insurance premiums, letting agent fees, and maintenance and property repair costs. However, while 440,000 basic-rate tax payers will be forced into a higher bracket, all landlords could be at risk of seeing their tax liability rise regardless of their existing rate of tax, with landlords in Central London (31%), the East of England (30%), and the West Midlands (28%) particularly hit. A full regional breakdown can be seen below. The amount by which landlords will be affected will depend on their personal circumstances, such as whether or not they generate income from any other sources. Landlords’ tax liability will go up depending on their existing annual mortgage interest payments, which are broken down by portfolio size below. Single property – £3,600 2-3 properties – £8,600 4-5 properties- £16,300 5-10 properties – £18,200 11-19 properties – £24,900 20+ properties – £38,000 The news comes as the National Landlord Association (NLA) met with Housing and Planning Minister Gavin Barwell to discuss the matter. The NLA also hopes to meet Financial Secretary to the Treasury, Jane Ellison, in the near future after Chancellor Phillip Hammond responded to the association’s request to discuss the forthcoming changes, and last year’s stamp duty surcharge on addition property purchases.
According to the latest findings form the National Landlords Association (NLA), more than a third of landlords (35%) believe that leaving the EU will have a negative impact on their ability to attract tenants in the future. The findings also reveal that 39% believe that Brexit will not have a significant impact on their business, while 21% are unsure and just 5% believe it will have a positive impact. The research comes after Prime Minister Teresa May’s announcement at the Conservative Party Conference that the process of the UK leaving the EU will be triggered by March next year. Throughout the UK, the findings indicate that more than half of landlords in central London (55%) believe Brexit will have a negative impact on their business – higher than any other region. Just over a fifth of landlords in the North East (22%) believe that Brexit will have a negative impact – the lowest proportion compared to other areas of the UK. A full regional breakdown is below. The findings also come as the NLA launches its new podcast series: Inside Property. The first 30 minute podcast, which is presented by Richard Blanco, focuses on what life after Brexit will look like for landlords, and features guests: Richard Bowser, Editor of Property Investor News Chris Norris, Head of Policy at the NLA Richard Donnell, Director of Research and Insight at Hometrack. Richard Blanco commented: “These findings clearly show that a significant proportion of landlords are concerned about what Brexit will mean for their lettings business so we wanted to try to understand and make sense of the situation. “We now know that Article 50 will be triggered soon, but landlords still have lots of questions, like what will happen to rental demand as a consequence of Brexit, will house prices fall, or should I rethink my investment strategy? The first episode of Inside Property will address all these questions and more”.
Jackson-Stops & Staff, one of the UK’s leading estate agents, has released new information that suggestions as to the reform of stamp duty on second homes, may actually fail to achieve the goal of putting off buy-to-let investors. The information, in effect shows that inflation in housing prices may actually offset the reform changes, and that the 3% surcharge placed on second homes may not yet be enough to actually deter potential investors from seeing buy-to-let investments as optimistic. And while it has been declared that there has been a surge in registrations made for buy-to-let properties up to April, it has also been highlighted that the majority of these investors will see greater returns from the inflation of property prices in the modern recovering housing market (potentially in under a year), thus positioning the 3% surcharge as nothing more than an inconvenience. In fact, Jackson-Stops & Staff has warned that those most affected by the surcharge will actually be tenants who will suffer from increased rental prices as reported previously. This, in effect, will likely deteriorate the market conditions for those looking to break onto the rental market as already previously highlighted, with landlords still seeing optimistic market conditions for at least some time. As explained by Jackson-Stops & Staff’s Chairman, Nick Leeming, the government’s attempts to even the playing field for property investors and first-time buyers, the situations does nothing to remove the spotlight which landlords should be seeing on investments into property as one of the most solid investments to this day. He added: “The idea that stamp duty tax will act as a deterrent is a fiction, as for most landlords it won’t amount to a significant figure.” Of course, with the impacts, once again, hitting the tenants of properties as opposed to the pockets of landlords, the growing debate on the depreciated affordability of rental housing stock is of even greater note. The question, however, is as to whether the government can find an alternative way to dissolve interest in buy-to-let investment in a way which won’t come down on the tenant.
Landlords are warned to take a closer look a t the upcoming EU Mortgage Credit Directive, the new piece of European Union legislation which, in effect puts a halt to “risky” mortgage lending. And placing an additional emphasis on landlords, the legislation also reassesses the definition of landlord mortgages as a former of consumer lending, thus bringing down harsher boundaries for receiving mortgages (specifically in cases where they may not be able to afford them). With new affordability checks in place, mortgage lenders will have to ensure that all borrowers can afford repayments, not today, but onto and into the future, taking into account predictions of rate increases of up to six or seven percent. And while this is something which may actually be deemed as common sense, it yet remains something which has been overlooked with regard to landlord mortgages, most specifically because of their classification as not being consumer lending; until now, that is. Additionally, the new regulation will have a particular effect on those remortgaging their properties too, where homeowners looking to consolidate and reduce their monthly payments may actually be told that the rates they would wish to remortgage to (naturally, lower than they are presently paying) are too high and unaffordable to them – a peculiar situation indeed, but one which may see a reduction in remortgaging, putting a little extra strain on those struggling to pay off their mortgages at present rates, yet also potentially encouraging people to take alternative methods of consolidating their outgoings. Most specifically, the change is expected to have a considerable effect on what are known as “accidental landlords”; those who have had no intention of renting out a property they have purchased, but, for a variety of reasons, have decided to do so – likely due to the need for extra income and asset utilisation. Yet, starting in 2017, landlords will no longer be able to claim tax relief on their mortgage repayments and, as opposed to extracting mortgage interest repayments from their taxes, will instead be charged a rate of 20% on the amount. In effect, this could result in taxes actually being paid on losses..
