Tag Archives: Housing benefit

Renting to ‘Council Tenants’ Latest Articles, UK Property Forum for Buy to Let Landlords

Not strictly an accurate title but I have heard novice landlords refer to people on Housing Benefit (provided by the council) as such so many times.Renting to ‘Council Tenants’

So, should you accept tenants who claim benefits?

No one can make that decision for you – but there are some risks to consider, and precautions you can take.

Financial Security

Although it is a generalisation, many benefit claiming tenants do not have much in the way of assets or financial reserves. This can result in delayed rent, or even non payment of rent if some other financial problem arises. In the longer term, it means that if you need to pursue a claim for damages or missing rent at the end of the tenancy, there is a high chance that you will not be able to enforce the resultant court order. Linked to this, for many tenants, is an irregularity of rent payments. Most tenancy agreements reserve rent monthly in advance. Housing Benefit (LHA) is paid 4 weekly in arrears (fortnightly in some areas). This means that the dates rarely match up (monthly rent, 4 weekly LHA) and the amounts for a single payment never match up (annual rent/12, annual LHA/13). For tenants who rely solely on LHA for their rent payment this will also mean that rent is always paid late.

Example:

Rent: £500pm (£6k pa)
1st July £500 rent due £500 owed
29th July £461.54 housing benefit received £38.46 owed
1st August £500 rent due £538.46 owed
26th August £461.54 housing benefit received £76.92 owed
1st September £500 rent due £576.92 owed
23rd September £461.54 housing benefit received £115.38 owed
1st October £500 rent due £615.38 owed

Providing your tenant is entitled to sufficient housing allowance to cover their entire rent (as above) the 13 LHA payments over a 12 month period will equal the 12 rent payments.

You may be asked by your tenant to change your tenancy agreement to 13 x 4 weekly rent periods a year in an attempt to match up rent due and benefits paid. Do not do this – If you needed to evict due to unpaid rent a 4 weekly rent period would prevent you using the mandatory ground 8 in section 8 of the 1988 Housing Act.

Many providers of landlord insurance will charge an additional amount if you let to benefits claimants. If you let to benefits claimants whilst paying for non-claimants then your insurance is likely to be invalid.

Your lender may have limitations on what type of tenants you can let to.

Your tenants benefit may be stopped.

If the council decide to stop paying housing benefit to your tenant, or their situation changes and they are entitled to less, they may not be able to pay their rent. Receipt of Housing Benefit is NOT guaranteed.

What can I do to protect myself?

The first thing to do is to NOT forget to carry out full referencing and credit checks on your tenants. This is likely to show if your tenant has previously defaulted on rent, or any other recorded debt. If you do these checks yourself, it is worth questioning the ‘last but one’ landlord. The current landlord may have a vested interest in giving a good reference to get rid of non-paying tenants.

A deposit is essential in all cases. As your tenant is on benefits, they are unlikely to have a large amount available for a deposit – and yet their lack of assets is the very reason you need as large a deposit as possible. It is probably cheaper to wait for a tenant with a suitable deposit than run the risk of a tenant running up a large rent debt, and not being able to obtain a penny through the courts.

A guarantor is also highly advisable. The guarantor will be expected to cover any bills that the tenant cannot pay. In view of this, your tenants’ guarantor should be a creditworthy homeowner, preferably working full time. The guarantor should be credit checked. If the guarantor is a homeowner, they are less likely to move – making them easier to find – and they have an asset that you can place a charge on if a court order is made against them.

Guarantees are very difficult to enforce and it is important to ensure that the document is legally binding. As a rule of thumb, a guarantee that is not witnessed and executed as a deed will not be enforceable in court. This is one area where DIY or unsubstantiated internet forms are best avoided – the cost of purchasing a professionally worded deed of guarantee is minimal compared with the potential consequences of having a guarantee that cannot be enforced.

Obtain written permission from the tenant to discuss their Housing Benefit claim with the council and make sure your tenancy agreement specifically states that you can use grounds 8, 10 & 11 from schedule 2 of the 1988 Housing Act. If it doesn’t, you will not be able to gain possession before the end of the fixed term even if your tenant owes many months’ worth of rent. I would also suggest that the initial tenancy agreement is only 6 months (not 12) to give you access to section 21 earlier, and (although I dislike the idea) it may be wise to serve a section 21(1)(b) notice as soon as the deposit regulations have been complied with. Doing this means that once the tenant is in a statutory periodic tenancy you can get guaranteed possession date within around 6-8 weeks of the first hiccough in payments whereas with section 8 you ideally need to wait until the tenant owes 2 months rent and you have to give a further 14 days notice, so that means you can commence possession proceedings at least 6 weeks earlier and probably get eviction 2 months earlier.

If it is too early to apply to the Courts for possession under section 21, as soon as the tenant is even a few pounds behind on their rent, serve a section 8 notice under ground 10. You don’t have to follow it through to the court process but this simple action will demonstrate to the tenant that their omission could have serious consequences and, if they have been good tenants, hopefully jolt them back on track.

And finally, as soon as the tenant misses a rent payment, notify the council of the fact and request that their payments are made directly to you in future. Some councils will do this, however all councils are obliged to do this once the tenant has a minimum of 8 weeks rent unpaid.


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


Stung by the £500pw Benefit Cap, no rent being paid – Help! Latest Articles, UK Property Forum for Buy to Let Landlords

This week I have been stung by my first experience of the benefits cap. Stung by the Benefit Cap, no rent being paid - Help

One of my tenants Housing Benefit has gone down to £30pw from £159pw.

This is the cap where the Government are limiting families to £500pw of maximum benefits and all councils will have it by Sept 2013.

My tenant now gets £310 Child Tax Credit, approx £90 Child benefit & £10 Income Support with loans taken off. With Council Tax & the £30HB, we are about £500. A lot of money I know, but when they’ve had if for years, they’re used to it.

My tenant cannot understand at all that she has to pay any rent out her own pocket – so isn’t going to – so she says.

I’ve given her notice in case things get worse, as mortgages don’t grow on trees.

I don’t want her to go and she she doesn’t want to go either!

She rang me up every week for a year to get a house off me, so we are both valued to each other.

I have contacted Shelter, MP’s, Govt, CLG, Advice Centre, the Council Housing benefit and more and none of them seem to know anything whatsoever about direct payment to a Landlord when tenant is in arrears as a result of these circumstances.

The Local Authority is now saying no provision for direct payment to Landlord when in arrears.

As we all know Universal Credit are talking about direct payment to Landlord because of the big arrears they’ve been getting in trial areas. And as we all know, direct payment when LHA was introduced in 2008 was a no no,until we all moaned enough that is. Now getting direct payment is like taking candy from a baby.

However, I’m hitting a brick wall with direct payment under this new benefit cap.

I thought I was a benefit expert until this week. I’m 99% sure they will do something eventually, when enough people get evicted and moan enough, but I and many others need something positive to happen now.

My Local Authority are not interested, they seem to think it’s  funny that supercool Landlord Mick Roberts is now only getting £30pw when he was getting £159pw and in their eyes, lapping it up.

My tenant is still allowed £159pw under 4 bed LHA rate rules, but it is the benefits cap which is limiting her housing benefit payment to £30pw. Clearly this is the first thing tenants lose when going over the £500pw threshold.

Govt needs to wake up because they haven’t got the houses for for these tenants and wherever this tenant ends up she will only get £30pw towards her rent, so will be in the same boat with any Landlord.

The big families are no longer attractive!

Jeez, I wanted this to be a quick post, but if any experts reading this know more than me and can help, it would be very much appreciated.

Regards

Mick


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


Private Rented Sector Review – Summary Landlord News, Latest Articles

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

The private rented sector has seen sustained and consistent growth in recent years. A structural change from owner occupation towards renting began a decade ago, long predating the economic downturn. The sector is home to an increasingly wide range of people—from young professionals to housing benefit claimants—and a growing number of families with children. The regulation and legislation governing the sector has, however, evolved over many years, often in response to problems that arose decades ago. Only in the 1980s did the sector begin to emerge from tight rent control and the shadow of Rachmanism and begin to develop. The market is a developing one which we need to help edge its way towards maturity. This requires a careful balancing act which does not upset the market developing naturally. It therefore requires not a single step but action across a number of different areas.

First, there has to be better, simpler regulation. The Government should have a wide-ranging look at the legislation covering the sector and put in place a much simpler, more straightforward regulatory framework. Once it does this, it should launch a campaign to publicise this new framework, to ensure that all tenants and landlords are fully aware of their rights and responsibilities.

Next, we need to give councils the flexibilities they require to enforce the law and raise standards. They need the freedom to implement approaches that meet the needs of their areas. They should be: afforded more flexibility over landlord licensing; given greater ability to generate resources; and encouraged to learn from each other. Local authorities should be able to recoup housing benefit and tenants the rent paid, when landlords have been convicted of letting substandard property.

Third, there is strong evidence of sharp practice and abuses by letting agents, making a clear case for a new approach to regulation. Letting agents should be subject to the same controls as their counterparts in the sales sector. In addition, it is time to crack down on the unreasonable and opaque fees charged not only by a few rogues but by many well-known high street agents.

Next, with the sector home to an increasing number of families, we have to ensure that the market offers longer tenancies to those who need them. To do this requires a cultural change and the removal of barriers, both real and perceived. We need action to speed up eviction processes where tenants breach the tenancy agreement, tackle the objections of lenders, and encourage letting agents to explore all options with landlords and tenants with regards to longer tenancies. Alongside longer tenancies, we should find more systematic, less arbitrary approaches to setting and increasing rents. There should also be a full review of local housing allowance to bring to an end the vicious circle whereby rents and housing benefit drive each other up.

Finally, we cannot escape the need to increase supply across all tenures of housing. Doing so will provide more choice, allowing renters to select housing on the basis of quality as well as price. The Government has to ensure that the benefits of its support for build-to-let development extend to the sector as a whole. It should also revisit the recommendations of our earlier published report on the Financing of New Housing Supply, to ensure it is doing all it can to support the building of new homes.

Taken together, these measures should lead to a more mature market and a sector that better meets the needs of those who live in it. It is important that private renting is seen as an attractive alternative to owner occupation.

parliament


Private paying tenants – How large and secure should their income be? Latest Articles

We let out properties mainly to Housing Benefit tenants. Despite the general assertions on this site, we haven’t had substantial arrears, or substantial damage to our property. We know how we can short circuit those arrears, on the whole.

Both instances of arrears we have had however, have arisen under private paying tenants just like Mark’s experience.

I wonder how other landlords calculate affordability for private tenants. We don’t have high rents – about £500 on some properties and about £550 on others. We’ve found tenants who have been able to pay on relatively low earnings. What yardstick do other readers use?

Employers references are some help, but can be manipulated or falsified. Although a credit check can assist, there are limits to that.

We find that at least we know – until any further government cuts -what housing benefit (or equivalent) will be received, although this is now complicated by the contribution to council tax now required of HB tenants.

In contrast, an employee can be fired at any time. How far do others go in enquiries of the employer?

Edwin income


Paul Shamplina and Landlord Action on BBC1 Thursday Landlord Action, Landlord News, Latest Articles

BBC1 Thursday 18th July, 10:30pm: Meet The Landlords.

This is a documentary about property in hard times with tenants in difficulty, some landlords enjoying the boom, some in trouble, and Landlord Action helping out.

We haven’t seen a preview but it sounds like it won’t be easy viewing, even for Landlord Action. This will be compulsory television for everybody in property!

 

Official Press release below:

Property Expert, Paul Shamplina, helps mop up the mess of ‘generation rent’

On 18th July, founder of tenant eviction specialists Landlord Action and leading property expert, Paul Shamplina, will be featuring in a one hour documentary, ‘Meet the Landlords’ on BBC 1, looking at the possibilities and pitfalls of being a ‘generation rent’ landlord.

Landlord Action, an organisation which has acted on more than 20,000 problem tenant cases, says the buy-to-let boom, which has lead to over 8.5 million people in the UK now living in a rented property, is the result of a cocktail of factors. These include; a lack of house building, less affordable housing, restricted funding in the mortgage market forcing more people to rent, tougher austerity measures leading to cuts on housing benefits, stagnant wages, increased cost of living and rising unemployment.

The documentary will meet the new army of private landlords who are riding the rental boom, both making and losing money as they struggle to get rid of non-paying tenants, as well as follow the tenants who are getting behind with their rent and risk losing their homes.

Few people have been involved in this business for as long as Paul Shamplina, who has been helping landlords with problem tenants for over 25 years and whose campaign was instrumental in passing the recently imposed bill to criminalise squatting. Two of the landlords featuring in the show have instructed the help of Landlord Action and Paul Shamplina can be seen helping them to reclaim possession.

Paul says “Over the years, our experience of professional bad tenants has been plentiful, often evicting the same tenant from more than one property. Whilst they are the minority, this type of tenant has the intention of preying on vulnerable landlords in order to live for free. They will seek out someone new to the market who is self-managing a property and who, out of financial desperation to avoid a void period, will accept a tenant with minimum referencing. However, more and more, we are also seeing situations where tenants have fallen on tough times and remain in properties out of desperation. The show seeks to underline this plethora of scenarios that ‘generation rent’ is creating by following landlords, both professional and amateur, in very different situations.”

Paul wants to help highlight possible problems to landlords, enable them to recognise the tell-tale signs of a problem tenant, or just one that has run into financial difficulty, and offer advice on the best approach to take in order to resolve the issue as painlessly and cost effectively as possible.

Mr Shamplina will also be featuring on BBCs ‘Rip Off Britain’ in September, in a feature which highlights the growing problems surrounding illegal sub-letting.

Photo Paul Shamplina

If you need the Assistance of Landlord Action evicting a tenant please CLICK HERE


Readers account of an ongoing eviction by their agents Latest Articles

We have a tenant who is a single mum and she has been in the property since December 2011. One month after her starting the tenancy with the letting agent we use she started missing payments and paying minimal amounts like £5 per month.

We served her section 21 notice on Oct 25th 2012 and have had real issues with evicting this tenant. We have the following discussion with the letting agent, please see below. Any readers advice will be gratefully received.

1) Please provide the details of the solicitors who are dealing with this issues as we would like to get an understanding from them on the complications of this case- ?
The solicitors are based in Northampton they have informed me Monday that we currently have a court date of the 28th August 2013 so we are literally waiting for this date as we speak before going forward and settling this once and for all

2) How much rent arrears are due?
– so far the tenant owed £1680 until the 7th July- I am in daily contact with the guarantor to negotiate payment plans etc

3) Why has the guarantor not been pursued for the monies, to us what is the point of the having a guarantor of there is nothing to enforce them to pay the monies due. Can you please also explain what option we have legally to pursue the monies from the guarantor ?
The guarantor is aware we will penalise them for the lack of payment and the court will deem them secondly liable for this money- They can even be ordered to pay this on behalf of the tenant (In some cases)

3) We know she mentioned she would empty the property out on the 7th July which we have always been dubious about. Why would she voluntarily evict herself when she as you mentioned to me is fully aware would not be re-housed by the council under that circumstance?
The tenant decided to leave the property due to being able to live with her brother for the time being before being re-homed, unfortunately the brother is in hospital and is therefore unable to stay with him until he is back she has also been informed by the council/ accommodation concern & others not to move as they will not re-home her again.

4) What exactly are the delays with evicting her legally and through the courts?
– generally going to court can take a while they estimate 6-8 weeks on getting a date, because the courts are so full they have to prioritise putting a lot on the backlog unfortunately I have known cases to be delayed for as long as 11 months.

5) We have had several other tenants who have been problematic and within 3-4 months they were evicted after a section 21 notice. Its been 9 months since we gave her section 21 notice (October 2012) and yet we have not made any progress, why is this and what makes this so unique.?
Basically because the tenant is on housing benefits ( I am currently trying to re-home her as we speak) she is now not attempting (from the best of my knowledge) to move, find another property. She is requesting the accounts to be re-looked at- ( I have previously had a meeting with her to discuss this further but she simply and will not believe she owes so much despite going through this thoroughly)

6) We have duly paid rent and legal insurance. Why exactly is the rent arrears in this case not covered by the insurance and what other options do we have to recover cost ?
– The court will determine if the tenant can AFFORD to pay back the arrears- chances as she is not working she will not be able to pay this back unless this is the minimal amount (£5 a week I am estimating!) therefore this is where the guarantor comes into place- this will all be determined in court where they will go from here to obtain this money for you

7) Can you please specify what benefits she is on and under what pretext is she a tenant on the property. From the best of my knowledge the tenant is currently just on Housing benefits?
– she has a savings account from her late husband which she uses to “top” up the shortfall with

8) What options do we have to evict the tenant and recover the rent arrears?
– From my experience the courts will not allow her to stay in the property due to the arrears- therefore will give her 14 days to leave on- the new tenant lined up is more than happy to wait and is being updated on a fortnightly basis by myself- generally a money order from the court can be given but again this depends on the tenants earnings

Jiten ongoing eviction


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