Tag Archives: Housing Association

Councils lose Court cases over HMO licence fees HMO's & Student Lets, Latest Articles, UK Property Forum for Buy to Let Landlords

Three cases have recently been tested in the Courts whereby Councils have charged more for HMO licensing then was reasonable.

There are rules to prevent Councils using HMO licensing to raise funds for other activities.

Hemming v Westminster City Council: The case outlines the type of costs that councils can recover through locally set licence fees and the processes councils have in place to ensure fee setting is transparent and open to scrutiny. The key issue addressed was whether the fees set by Westminster City Council complied with the requirements of the European Services Directive 2009 and the interpretation of Article 13(2) of the Directive. The Services Directive also makes it clear that licence fees covered by the Directive can only be used to recover costs and should not be used to make a profit or deter service providers from entering a market. Councils lose Court cases over HMO licence fees

Crompton v Oxford City Council: The power to charge fees in respect of HMO licensing is found in s63 of the Housing Act 2004. Importantly, this power is granted in respect of licence applications only. Oxford City Council has sought to charge a fee for the variation of an HMO licence. The Residential Property Tribunal (RPT) ruled that the fee was unlawful and that it could not be charged.

Bristol City Council v Digs (Bristol) Ltd: The defendant was the private landlord of a maisonette in multiple occupation. The council brought a prosecution for failure to obtain an HMO licence and for breaches of the HMO regulations. A District Judge at Bristol Magistrates Court tried the preliminary issue of whether the maisonette was a licensable HMO. It extended over two storeys of a building with a further entrance corridor and hallway on a lower storey. The council included the lower storey in deciding that the HMO extended to three storeys. The Judge held that having regard to Article 3 of the HMO (Prescribed Description) (England) (Order) the maisonette was not an HMO. The council had been wrong to include the lower storey. In the light of that ruling, the council offered no evidence and the defendant was acquitted.

In the wake of these rulings the NLA is asking all local authorities in England to contact any affected landlords, informing them of their right to appropriate refunds and providing details of how they may make a claim.

Richard Lambert, Chief Executive Officer at the National Landlords Association (NLA), said:

we have asked local authorities to come clean about the level of fees they have charged private-landlords, if they were entitled to make these charges, and when they will refund any money unjustly demanded.

Mr Lambert went on to add:

“In writing to all local authorities in England we’re acknowledging the good working partnership many private landlords have with town halls, but making clear they should not be absorbing the costs of overcharging to support other council functions”.


Rip Off service charges on leasehold flats Latest Articles, UK Property Forum for Buy to Let Landlords

I own 2 leasehold flats in a block of 9, there is also a separate block of 9 housing association flats, and 11 houses (houses only contribute a small figure to the service charge)

My problem is that the yearly service charge is now just under £2,000 pa not including ground rent. I have flats else where and I’m paying approx £1,000 pa service charge on average so I’m getting increasingly frustrated by this £2,000 service charge. When I question the management company they just fob me off with excuses like oh the landscaping budget has gone up or the insurance has gone up blah blah blah!!!! I have had several rows with the management company about the quality of there works so the fact that I also think I’m being ripped off is very frustrating. Getting rid of them would be ideal but I do not have the knowledge, time or patience to contact and then get together with the other residents and form a RTM etc… Is there something a bit easier and quicker I can do to get this management company in check, I’ve heard about Leasehold valuation tribunals but is that the correct route for this problem and can anyone tell me how it works? Rip Off service charges on leasehold flats

Or is there a quick way of just just simply sacking them and getting another management company in, I always thought the management company was employed by the freeholder so would that be a job of the freeholder?

Thanks in advance

Rob.


Letting agent regulation for Scotland – Scottish Government plans announced Landlord News, Latest Articles, Letting, Lettings & Management, Property Investment News, Property Market News, Property News

Scotland’s newly formed Council of Letting Agents (CLA) steering group met for the first time yesterday. Letting agent regulation for Scotland

The members of the group have been selected to represent Scottish Association of Landlords (SAL) letting agent members’ views. These members are tasked with working up the plans for this new letting agent division of the Scottish Association of Landlords.

A senior Scottish Government representative accepted our invitation to attend and he warmly welcomed the CLA as the new letting agent body for the Scottish Private Rented Sector (PRS). It was confirmed that it is the intention of the Scottish Government to regulate the letting agent industry in Scotland going forward. Letting agent regulation has been called for by SAL for some time.

The steering group heard first hand about the likely shape of plans for this regulation which follows approximately two years of consultation on various levels.

The intention is to propose via a new Housing Bill to be put before the Scottish Parliament that letting agents are regulated using a system which will emulate the way the Property Factors Act works. The likelihood is that this will include:

•    Registration of all letting agents in Scotland
•    Code of practice which will ensure consistency of good standards across the industry
•    Opportunity for redress where these standards are not being met – this would be through a Housing tribunal.

As with the procedure for all new Scots legislation, the process involves several stages in the Scottish Parliament. Therefore at this point in time, nobody can predict for certain the details of the future Bill and likely resultant Housing Act.

We’ll continue to keep all SAL members posted. The CLA will represent our members agents as the details of the planned regulations are drafted.

SAL will also continue as ever to represent landlords via our place on the regulations working group. Please keep us posted with your views.

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Help me if you can I’m feeling down Latest Articles, UK Property Forum for Buy to Let Landlords

When I married in 2009 I remortaged my house onto a buy to let to raise a deposit to buy our marital home. The marital home was then completely financed by me, and we are tenants in common. Help me if you can I'm feeling down

My husband had a small house that he had mortgaged to 70% and a housing association owned rest. He had poor credit and was unable to remortgage for buy to let. I had good credit so we decided that rather than he pay for his share of our home we would purchase the entire property and remortgage that onto a buy to let as well to finance our home.

The buy to let is with Nationwide. The letting of the house carried on OK. My husband was out of work and therefore any debts were paid by me. My husband suffers from mental health issues and is prone to irrational decisions.

Recently we had decided to sell up and move to France, this was at the time that our buy to let needed new tenants. On vacating the tenants my husband informed me that he was moving his son, girlfriend and her child into our buy to let. He did this without me seeing the rental agreement or me signing the agreement. He also moved into the house, which I hoped would be temporary until he came to his senses.

His sons girlfriend had been prosecuted by DWP for benefit fraud and they have all accused me of “dobbing them in” and spread this rumour to all the family and friends. My step son is also on benefits, so I know there had to be a tenancy agreement taken to council. The rent is £1,300 monthly and some was paid after a month, and they now have another tenant in there who is yet to contribute rent. My husband has not contributed rent either.

Apart from my husband, they take drugs, work while on benefits and are not bothered about the fact that the house was in arrears with mortgage company which I personally paid off.

Although I have begged my husband to come home and see a doctor, he has not got the courage to tell them to pay up or to tell them to stop taking drugs. The police have been around already because there is a child in house but found nothing. I understand from the previous tenant that neighbours are not happy.

So there is benefit fraud, drugs overcrowding and mental illness in house and I don’t know if my name is on the landlord agreement either. Despite being the lead mortgagee on the property and I am getting no say.

The mortgage we have is for business and I have been informed by the mortgage company that the tenancy is not allowed as family, including my husband, cannot live in the house. Therefore the tenants will have to leave or we need to buy another mortgage. I presume that the mortgage company will find out through council tax records who is living there and inform the benefits department they know tenants are on benefit?

I am worried that the council will not pay an illegal tenancy, so will want their money back and the tenants will stop paying because the money they earn is for drugs.

To top it all I have paid for the house not to be repossessed out of my pocket. Some rent has recently been paid but my husband has taken it all. He will not help pay for any of the housing costs in our home. He does not know yet that the tenancy is illegal and will blame me when it all comes out. He is working but on contract and does not let the tax man know. He is prone to voilence and I am loosing an income here. I cannot afford to pay the mortgage on this house, and the bills whilst they sit in the house defamming me and text me lies.

I have been to the police who are don’t seem to be the slightest bit interested in what’s going on. I have also spoken to my GP and he has advised me not to let my husband in our home as she thinks I’m at risk. I do not want to get my husband into trouble, I just need him to come to his senses. However, he is surrounded by peopel who tell him I was brainwashing him.

What can I do?

I have no money to pay for a solicitor.

In hope on suggestions.

Anonymous


Is the section 21 notice now a risk? Latest Articles, UK Property Forum for Buy to Let Landlords

Under Section 21 of the Housing Act 1988, once an Assured Shorthold Tenancy (AST) agreement has come to an end, a landlord has the legal right to recover possession of their property should they wish. Is the section 21 notice now a risk?

A landlord wishing to re-gain possession of a property is required to serve a Section 21 Notice to tenants. They do not have to give any reason for ending the tenancy.

There are strict rules for landlords to follow when evicting tenants. Under an AST, they must ensure that the tenancy has run for at least six months and that the initial contract term has finished. Landlords have a duty to protect deposits in a suitable holding scheme and to serve the correct notices using Section 21. There are two types of Section 21 Notice and it is important the right one is issued. If the tenancy is still within the contracted fixed term, the S.21 (1)(b) Notice should be served. Where the fixed term has ended and the tenancy has become a periodic agreement, the S.21 (4)(a) Notice is used. Landlords must give at least two months notice before evicting tenants. If the tenant does not vacate within the timescale, a court possession order can be obtained. Following this, if occupants still won’t leave, the landlord can apply again to the court for bailiffs to assist in tenant eviction.

Before going to court it is imperative that protocols have been followed properly. The appropriate notices need to have been served correctly and in a timely manner. According to the Chairman of the London Association of District Judges, a high percentage of eviction notices are being dismissed out of court due to mistakes made in their issue.

Previously, properly served Section 21 Notices have usually proved effective. Wishing to avoid the issue of going to court, tenants nearly always left within the requisite two months. However, it has recently become popular for councils to refuse a Section 21 notice as evidence of tenant eviction. They prefer to wait until the case has been brought to court and a possession order granted before re-homing individuals. As this process can take several weeks or months, it gives councils additional time to relocate tenants. However, it can be financially devastating for landlords, especially if the tenant is not paying rent.

The new Universal Credit system is also causing concern for both landlords and tenants. Previously, benefits were paid to claimants in separate instalments and rent paid directly to landlords, but tenants will now receive one payment, including housing benefit, from which they will need to pay their rent. Only a small percentage of tenants fail to pass rent on to their landlords. However, the new system could potentially see more individuals struggling to manage their finances effectively and the risk of rent arrears will increase. In addition, there is apprehension over proposals to recover arrears by reducing payments to the claimant and paying a percentage directly to the landlord. This could place tenants in an even more vulnerable position and the landlords will only recoup lost rent over very long periods of time and risk further arrears in the future.

It seems inevitable that the long-term result will be more landlords withdrawing from the social-housing sector, with the gap between supply and demand only increasing.


Bedroom Tax affecting private landlords?!!! Latest Articles, UK Property Forum for Buy to Let Landlords

As everyone knows bedroom tax is not  tax, but the above is a handy way to refer to it. Bedroom Tax affecting private landlords

Earlier this year I received a simple very clear brief about this, written by the chief housing officer of Purbeck District Council..  The essential features of the measure are:

  1. It only applies to people of working age.
  2. It only applies to people who are receiving Housing Benefit/Local Housing Allowance or whatever else it may be being called to pay their rent.
  3. It only applies to those living in social housing, i.e. Council Housing, housing provided by a Housing Association, or by some other Registered Social Landlord.
  4. It is concerned with “spare” bedrooms.  Thus for example a household of one or two parents and one child is considered to need a 2-bedroom dwelling.  If this family is living in a 3-bedroom dwelling it has a “spare” bedroom. The benefit paid will be reduced by, I think, 14%.  The same principle applies to smaller families, larger houses, etc.

The purpose of this measure is to free up  publicly funded accommodation which is under occupied for households who need larger dwellings, as we all know.

In the light of this I have been surprised to read and hear of private landlords whose tenants are having their benefit payments reduced, essentially on the grounds of under occupation.  Now it is happening to me!

This has prompted me to contact the local councillor who is Chairman of Housing at our local council who in turn asked the chief housing officer whether the rules had changed since early in the year.  The answer is that they have not.  They remain as outlined above.

What is going on?

Best wishes,

Michael Bond.


Alternatives to Landlord Licencing Schemes Latest Articles, UK Property Forum for Buy to Let Landlords

The alternatives to Landlord Licensing Schemes require joined up thinking, changes to data sharing protocols within local authorities and revised high level directives and strategies which must begin at Government level. 

Perhaps the first question to ask is what is Landlord Licensing all about? Is it really about raising standards or is it more to do with raising funds?Alternatives to Landlord Licencing Schemes

Funding

If society as a whole desires that people should not be subjected to sub standard housing conditions then society as a whole must pay to enforce this (howsoever that might be done) whether the money is raised at a local level or centrally.

It is both unacceptable and wholly undemocratic that landlords should be singled out by Government, Councils and Local Authorities to pay stealth taxes badged as licensing fees on the pretence that the money will be used to fund enforcement related initiatives.

Costs associated with licensing schemes imposed on landlords are funded through increased rents. Neither landlords nor tenants want this, particularly as there is clear evidence (demonstrated in this article) that landlord licensing schemes have proven not to be an effective solution to problems in the Private Rented Sector.

Recycling of Court awarded penalties

The high costs associated with prosecuting criminal landlords is borne by Local Authorities, however, fines and penalties go to the treasury. If these funds were to be redirected to the prosecuting authorities this would assist funding of additional prosecutions and create incentives to bring more criminal landlords to task. Continue reading Alternatives to Landlord Licencing Schemes


Affordable housing – buy to let trap Latest Articles, UK Property Forum for Buy to Let Landlords

My partner and I are living in a part rent/part buy affordable housing 1 bed flat. Affordable housing - buy to let trap

We would like to move house so we can start a family.

We have enough money for the deposit on a new property and have been looking at bigger places to live.

Our 1 bed flat has been up for sale for almost 6 months and we have only had one viewing from someone who thought the property was at another site!

The block of flats we are in consists of 5 council rented flats and 3 part rent part buy affordable housing schemes.

A number of the tenants in the council rented flats have caused nothing but problems ever since the property was built in 2007. The police have raided neighbours flats for drugs on numerous occasions, we had 3 years of noise disturbances from one tenant who eventually was evicted, constant damage to the communal areas and people leaving unwanted furniture in hallways and outside the property.

Sadly the block of flats, we think now has a bad reputation and this is why nobody has viewed to buy.

We have tried to get permission to let the flat so we can move but because we are part of a shared ownership scheme we cannot get permission from the mortgage people as we would need to prove that we would be moving back into the property after 2 years, which we won’t be!

We have spoken to the housing association that own the other half of the property and have asked for them to buy back our share as we feel we are stuck due to all the going ons with the other tenants. Our local MP has also written to them and asked the same question, but they said they would only be willing to buy back the property if we were in danger of repossession, but we are not in that situation!

What could we do, so that we could either sell the property, obtain permission to let or have the housing association buy back our share?

Thanks

Stephen


Rent to Rent Success Stories Advice, Landlord News, Landlords Stories, Latest Articles, Letting, Lettings & Management, Property Investment News, Property Investment Strategies, Property Market News, Property News, UK Property Forum for Buy to Let Landlords

There have been some real horror stories of Rent to Rent hitting the press of late and that’s not necessarily a bad thing as it raises awareness of the strategy.

However, what I’m looking for now are some success stories from property owners, investors and tenants.

I know for sure that the “Guaranteed Rent” business model, badged “Rent to Rent”, “rent2rent” or “r2r” for short over recent years has been operated for decades by some major operators.

Some examples which immediately spring to mind are Northwoods Letting agents which operate a Guaranteed Rent model on an agency basis.

Housing Associations and councils also offer fully repairing leases to property owners and then sublet the properties and that also fits within the rent 2 rent business model. Generally these schemes are utilised to increase the availability of housing stock required to accommodate vulnerable tenants.

Group 4 security are another major player in the sector. They typically offer landlords 5 year FRI leases with permission to sublet too. G4 then utilise properties they are leasing for rehabilitation purposes.

For some property owners I can see the attraction, although it’s not a business model which appeals to me personally.

The allure of guaranteed rent, albeit below the market rental value, sometimes significantly, has to be one of the main features of attraction. For property owners who don’t see themselves as landlords, the ability to offload everything related to regulation must also be attractive.

My research has uncovered two business models to date. The first is the commercial lease model. This is where the investor leases a property from the owner and takes on the responsibility for all compliance as well as returning the property to the owner after an agreed period in the same state of repair. The contract terms for these arrangements tend to be for 5 years or less. This is so that notice can be served to enable the property owner to contract out of the provision of the Landlord and Tenant Act so that the owner does not become obliged to extend the lease. The responsibilities relating to being a landlord are transferred from the property owner (the lessor) to the investor (the lessee) in much the same way as when a leasehold flat is purchased. For example, if the property is sublet without a Gas Safety Certificate and subsequently explodes in the middle of the night killing all occupants, it would be the lessee who would be responsible, not the freeholder/owner/lessor of the property.

The second business model is a management contract which is the model used more traditionally by letting agents offering Guaranteed Rent. In this instance the landlord remains ultimately responsible for the laws governing landlords but could sue his agents for negligence if necessary. This arrangements, is therefore, inherently more risky for nproperty owners. They should do their due diligence such as checking contracts to be clear on who is responsible for what and to ensure that the investor/management company they are working with are adequately insured for professional negligence under their professional indemnity insurance policy.

Clearly there is huge demand for rent to rent, otherwise we would never have seen the likes of Northwoods having built such a successful business on the back of it, neither would we have councils, FTSE 250 companies and Housing associations offering varying for of rent to rent deals.

As for the privateers, well there will always be good and bad ones and without any form of regulation it really is a case of caveat emptor.

So, to end I have two requests:-

1) Please share any rent to rent success stories you are aware of

2) Please share the questions you would ask as part of your “due diligence” if you were considering rent 2 rent, either as a property owner, investor/manager or a tenant.

If you want to share cautionary tales regarding rent 2 rent please see THIS THREAD as any comments which are not relevant to this particular thread will be deleted. 

Details of how to get hold of professionally drafted Rent to Rent contacts can be found via THIS LINK.

I look forward to reading your comments.

Regards

Mark Rent to Rent Success Stories


Private Rented Sector Review – Conclusions and recommendations Landlord News, Latest Articles

The Private Rented Sector Review conclusions and recommendations published by the Communities and Local Government Committee:

Simplifying regulation

1.  We recommend that the Government conduct a wide-ranging review to consolidate legislation covering the private rented sector, with the aim of producing a much simpler and more straightforward set of regulations that landlords and tenants can easily understand. As part of this review, the Government should work with groups representing tenants, landlords and agents to bring forward a standard, plain language tenancy agreement on which all agreements should be based. There should be a requirement to include landlords’ contact details in tenancy agreements. (Paragraph 13)

2.  We recommend that the Government consult on the future of the housing health and safety rating system and the introduction of a simpler, more straightforward set of quality standards for housing in the sector. The Government should also ensure that planning and building regulations are consistent with standards for the quality and safety of private rented housing. (Paragraph 18)

Increasing awareness

3.  We recommend that, once the review of the legislative framework we have called for is completed, the Government, working with tenants’, landlords’ and agents’ groups, establish and help to fund a publicity campaign to promote awareness of tenants’ and landlords’ respective rights and responsibilities. Our recommendation for a wholesale review of the regulation in the sector provides the obvious platform on which to base a publicity campaign. (Paragraph 24)

4.  We recommend that the Government bring forward proposals for the introduction of easy-to-read key fact sheets for landlords and tenants, and consult on the information these sheets should contain. The sheets could include links to further information available online. As a minimum, the sheets should set out each party’s key rights and obligations, and give details of local organisations to whom they could go for further advice and information. This fact sheet should be included within the standard tenancy agreement we propose earlier in this chapter. (Paragraph 25)

Raising standards

5.  Some local authorities are doing excellent work to raise standards in the private rented sector, but there appears to be more scope for sharing this good practice, so that all councils are performing to a high standard. The Local Government Association should, as part of its sector-led improvement role, make sure that mechanisms are in place to ensure all councils learn from the good practice and take effective steps to improve standards of property and management in the private rented sector. (Paragraph 30)

6.  We are concerned about reports of reductions in staff who have responsibility for enforcement and tenancy relations and who have an important role in making approaches to raising standards successful. Given the financial constraints that councils face, it is important to identify approaches to raising standards that will not use up scarce resources. One approach is to ensure that enforcement arrangements pay for themselves and help to fund wider improvement activity. Therefore, where possible, the burden of payment should be placed upon those landlords who flout their responsibilities. (Paragraph 31)

7.  We recommend that the Government consult on proposals to empower councils to impose a penalty charge without recourse to court action where minor housing condition breaches are not remedied within a fixed period of time, though an aggrieved landlord would have the right of appeal to a court. (Paragraph 33)

8.  We recommend that, where landlords are convicted of letting property below legal standards, local authorities be given the power to recoup from a landlord an amount equivalent to that paid out to the tenant in housing benefit (or, in future, universal credit). We hope that such a measure will help to prevent unscrupulous landlords from profiting from public money. Local authorities should be able to retain the money recouped to fund their work to raise standards. To ensure a consistent approach, those tenants who have paid rent with their own resources should also have the right to reclaim this rent when their landlord has been convicted of letting a substandard property. (Paragraph 37)

Illegal eviction

9.  We do not agree that a statutory duty to have to take steps to tackle illegal eviction should be placed on local authorities, as it would be inconsistent with a localist approach. Nevertheless, it is again important that local authorities learn from each other and share best practice on tackling illegal eviction. The Local Government Association should ensure that lessons on illegal eviction are learnt and disseminated. (Paragraph 38)

10.  We are concerned that the police are sometimes unaware of their responsibilities in dealing with reports of illegal eviction. We recommend that the Department for Communities and Local Government work with the Home Office on guidance that sets out clearly the role of the police in enforcement of the Prevention from Eviction Act 1977. (Paragraph 39)

Licensing and accreditation

11.  The idea of national licensing has some merit, and such a scheme could bring a number of benefits, particularly if introduced alongside an effective system of redress. It is clear, however, that the Government has not been convinced by these arguments, and we have some sympathy with the Minister’s assertion that a national scheme could be very rigid. Having tailored local schemes may bring its own costs, especially for landlords operating across several areas, but on balance we would prefer to see local authorities develop their own approaches to licensing or accreditation in accordance with local needs. The Government’s focus should be on giving local authorities greater flexibility and encouraging the use of existing powers. (Paragraph 43)

12.  We recommend that the Government bring forward proposals for a reformed approach to selective licensing, which gives councils greater freedom over when licensing schemes can be introduced and more flexibility over how they are implemented. Councils should ensure that the cost of a licence is not set so high as to discourage investment in the sector. (Paragraph 49)

13.  We recommend that the Government give local authorities a power to require landlords to be members of an accreditation scheme run either by the council itself or by a recognised landlords association. (Paragraph 53)

14.  It is important that local authorities have options and tools to raise standards in their areas. Three particular options are: (1) greater use of landlord licensing schemes; (2) compulsory accreditation; and (3) taking a proactive neighbourhood approach to raising standards. In each of these cases, given resource constraints, the schemes have to pay for themselves, and, as far as possible, place the burden of payment on the unscrupulous landlords, with financial deterrents for non-compliance. Councils should be given the powers to impose heavy penalties on those who do not register for licensing or compulsory accreditation after appropriate notification. Neighbourhood approaches could be funded by local authorities recouping costs from landlords whose properties fail to meet minimum standards. We further recommend that the Government initiate a review of the fines imposed by the courts for letting substandard properties, to ensure they act as a sufficient deterrent. (Paragraph 55)

Houses in multiple occupation (HMOs)

15.  We recommend that the Government conduct a review of the mandatory licensing of houses in multiple occupation. This review should consider, amongst other things, evidence of the effectiveness of mandatory licensing, how well it is enforced, and whether the definition of a prescribed HMO should be modified. (Paragraph 58)

16.  Where there are community concerns about high concentrations of houses in multiple occupation, councils should have the ability to control the spread of HMOs. Such issues should be a matter for local determination. We therefore consider it appropriate that councils continue to have the option to use Article 4 directions to remove permitted development rights allowing change of use to HMO. (Paragraph 63)

17.  Universities have a responsibility to ensure that student housing does not have a detrimental impact upon local communities. They should be working with local authorities and student groups to ensure that there is sufficient housing in appropriate areas and that students act as responsible householders and members of the community. (Paragraph 64)

Safety standards

18.  We recommend that the Government work with the electrical industry to develop an electrical safety certificate for private rented properties. To obtain such a certificate, properties should be required to have a full wiring check every five years and a visual wiring check on change of tenancy. Landlords should be aware of the legal requirement to provide safe installations and appliances. (Paragraph 66)

19.  We recommend that the Government introduce a requirement for all private rented properties to be fitted with a working smoke alarm and, wherever a relevant heating appliance is installed, an audible, wired-up EN 50291 compliant carbon monoxide alarm. (Paragraph 67)

Regulation of letting agents

20.  We recommend that, as part of its consultation on the redress scheme, the Government seek views on how best to publicise such a scheme and what penalties should be in place for those agents who do not comply. The Government should also explore how the redress scheme fits alongside existing arrangements for deposit protection. We further recommend that the redress scheme is accompanied by a robust code of practice that sets out clear standards with which agents are required to comply. (Paragraph 74)

21.  We recommend that the Government make letting and managing agents subject to the same regulation that currently governs sales agents. This includes giving the Office of Fair Trading the power to ban agents who act improperly, and making client money protection and professional indemnity insurance mandatory. (Paragraph 78)

22.  Any proposal to require sales agents to meet minimum professional standards before they begin trading should also be applied to letting and managing agents. In addition, if at any point a requirement for sales agents to be registered with an accredited industry body is to be introduced, this should be part of a wider framework also covering letting and managing agents. We recommend that the Government review these arrangements in two years’ time. (Paragraph 78)

Agents’ fees and charges

23.  We recommend that the code of practice accompanying the new redress scheme include a requirement that agents publish a full breakdown of fees which are to be charged to the tenant alongside any property listing or advertisement, be it on a website, in a window or in print. This breakdown should not be “small print”, but displayed in such a way as to be immediately obvious to the potential tenant. The code should also require agents to explain their fees and charges to tenants before showing them around any property. Furthermore, the code should forbid double charging, and there should be a requirement that landlords are informed of any fees being charged to tenants. If agents do not meet these requirements, the fees should be illegal. Finally, the professional bodies should make a commitment to full, up front transparency on fees and charges a requirement of membership. (Paragraph 83)

24.  We intend to gather further information on the impact in Scotland of the decision to make fees to tenants illegal, and to return to this issue in 2014. (Paragraph 86)

Longer tenancies

25.  The demographics within the private rented sector are changing. No longer can it be seen as a tenure mainly for those looking for short-term, flexible forms of housing. While some renters still require flexibility, there is also an increasing number, including families with children, looking for longer-term security. The market, therefore, needs to be flexible, and to offer people the type of housing they need. The flexibility of assured shorthold tenancies should be better exploited, and the option of using assured tenancies should also be considered where these meet the needs of landlords and tenants. That we are beginning to see some institutions and housing associations offering longer tenancies under the current law suggests that we do not need legislative changes to achieve them. Rather, we need to change the culture, and to find ways to overcome the barriers to longer tenancies being offered. (Paragraph 94)

26.  We recommend that the Government convene a working party from all parts of the industry, to examine proposals to speed up the process of evicting during a tenancy tenants who do not pay rent promptly or fail to meet other contractual obligations. The ability to secure eviction more quickly for non payment of rent will encourage landlords to make properties available on longer tenancies. The Government should also set out a quicker means for landlords to gain possession if they can provide proof that they intend to sell the property. (Paragraph 97)

27.  Some landlords are not able to offer longer tenancies because they are prevented from doing so by conditions in their mortgage. We are pleased that lenders are considering how such conditions can be removed, and that Nationwide Building Society is to begin allowing its borrowers to offer longer term contracts. We urge the Council of Mortgage Lenders to work with other lenders to ensure that they quickly follow suit. Lenders should only include restrictions on tenancy length in mortgage conditions if there is a clear and transparent reason. (Paragraph 100)

28.  We recommend that the Government include in the code of conduct for letting agents a requirement both to make tenants aware of the full range of tenancy options available, and, where appropriate, to broker discussions about tenancy length between landlords and tenants. (Paragraph 102)

‘Retaliatory eviction’

29.  There is a perception amongst some tenants that if they speak out it could result in their losing their home. Tenants should be able to make requests or complain without fear that doing so will lead the landlord to seek possession. We are not convinced, however, that a legislative approach is the best or even an effective solution. Changing the law to limit the issuing of section 21 notices might be counter-productive and stunt the market. Rather, if we move towards a culture where longer tenancies become the norm, tenants will have greater security and also more confidence to ask for improvements and maintenance and, when necessary, to complain about their landlord. Moreover, if local authorities take a more proactive approach to enforcement, they will be able to address problems as they occur rather than waiting for tenants to report them. (Paragraph 105)

Rents and affordability

30.  Problems with the affordability of rents are particularly acute in London and the South East. Although in other parts of the country average rents and yields are relatively stable, we are still concerned that some families are struggling to meet the costs of their rent. We do not, however, support rent control which would serve only to reduce investment in the sector at a time when it is most needed. We agree that the most effective way to make rents more affordable would be to increase supply, particularly in those areas where demand is highest. (Paragraph 110)

31.  There is no perfect way to set rent, but, where longer tenancies are being established, linking increases to inflation or average earnings, or voluntarily agreeing a fixed uplift each year merit consideration and could provide tenants and landlords with a degree of stability, though over time mechanisms may emerge as, for example, in the commercial property sector. Tenants’, landlords’ and agents’ groups should encourage their members to discuss these options at the outset of a tenancy. Existing arrangements for setting and increasing rent are often arbitrary and uneven, and reflect the immaturity of the market. (Paragraph 113)

Placement of homeless households in the private rented sector

32.  We welcome the Government’s use of secondary legislation to clarify when accommodation is unsuitable for homeless households. We expect councils to pay full regard to this order and to ensure that homeless households are only placed in suitable accommodation. Given that many of these households will be vulnerable, councils have a particular responsibility to ensure that the properties they are placed in are free from serious health and safety hazards. We recommend that, as a matter of good practice, local authorities should inspect properties before using them for the placement of homeless households. (Paragraph 117)

33.  All agree that, wherever possible, councils should be placing homeless households within their local area (unless there are particular circumstances that mean it is not in the households’ interests). It nevertheless appears inevitable that councils in areas with high rents, London in particular, will place homeless households outside the area, including in coastal towns. Before any placement, there should be a full discussion with the receiving authority and the prospective tenant and information about the household and its ongoing needs should be shared. The Government should consider making this a statutory duty. (Paragraph 121)

34.  We were pleased to hear of positive examples of work to support homeless households in the private rented sector, including the establishment of social letting agencies and the development of private rented sector access schemes. We encourage the Government to work with local government, the charity sector and industry bodies to ensure best practice is shared and lessons learned. (Paragraph 122)

Local housing allowance

35.  We recommend that the Government take immediate steps to allow councils to apply for a variation of broad rental market area boundaries where anomalies occur. (Paragraph 125)

36.  We recommend that the Government conduct a wide-ranging review of local housing allowance (LHA). This review should assess whether there is greater scope for local flexibility over the setting of LHA rates and the boundaries of broad rental market areas. Local authorities could be incentivised to reduce the housing benefit bill by being allowed to retain any savings for investment in affordable housing. (Paragraph 125)

Data quality

37.  We recommend that the Government establish a small task group of key organisations and academics to consider how data relating to the private rented sector can be improved and made more readily available. In addition, we encourage the National Audit Office to contribute to an effective evidence base about the sector and to draw upon our recommendations when developing studies on housing related topics. (Paragraph 128)

Tax

38.  We recommend that the Government, in reviewing the regulation covering the private rented sector, set out proposals for greater co-ordination between the tax authorities and those regulating the private rented sector. (Paragraph 131)

Increasing supply

39.  We welcome the introduction and expansion of the Build to Rent Fund. The Government should take steps to ensure that the fund makes a net addition to new housing, as well as speeding up the delivery of those homes already in the pipeline. (Paragraph 138)

40.  It remains to be seen how much impact the guarantee scheme for the private rented sector will have in delivering additional new homes. The policy may be well-intentioned in its aim to encourage organisations to have more confidence to invest in the sector, but the Government needs to measure results. We invite the Government in its response to our report to update us on the number of applications it has received for the private rented sector guarantee scheme, and to provide an estimate for the number of additional homes it expects the scheme to deliver. If there is any doubt that the scheme is going to deliver the homes required, we recommend that the Government rapidly explore other options for the use of the resources identified. (Paragraph 142)

41.  We welcome the establishment of the task force to promote and broker investment in build-to-let development, and are pleased that the task force is already in operation. It is important that this task force does not become another quango but quickly delivers on its objectives. We invite the Government, in its response, to set out the progress made by the task force in its first few months of operation. This update should quantify the amount of additional investment brokered, and the number of additional homes it would deliver. (Paragraph 144)

42.  Efforts to promote high-quality build-to-let development have commanded significant amounts of government attention and resources. One of the main arguments in favour of this approach is that it will lead to improved choice, quality and affordability across the whole of the private rented sector. It is too early to assess the impact, but a key part of the evaluation of these measures must be the impact they have on the sector as a whole. If, in a year’s time, there is no evidence of this broader effect, the Government must reconsider its strategy and look to other measures to boost supply across the sector as a whole. (Paragraph 148)

43.  There is an urgent need to boost supply across all tenures of housing. We recommend that the Government revisit the Committee’s report on the Financing of New Housing Supply, and set out proposals to implement those recommendations it initially rejected. (Paragraph 150)commons logo


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