Can you trust your letting agent?
Yet another case of landlord bashing here. A landlord discovered too late that her letting agent had failed to protect her tenat's rent.
The tenant caused a lot of damage and the landlord quite rightly witheld his security deposit. Then he found out that the letting agency had taken 6 months to protect the deposit so he tried to sue the hapless landlord for about £5000. The judge disallowed this outrageous claim but still said the landlord had to hand back her £1600 deposit to the tenant!
The agent went bust shortly afterwards and thus the landlord could reclaim nothing. I would always prefer to let a property myself directly. But of course you can only do that if the property is local to where you live.
Shopping centre developer to build flats instead of shops
I have long predicted the conversion of high streets to residential use. And now, shopping centre giant, Hammerson has decided to redevelop a former Debenhams site in Leicester into rental apartments. Given that it is to be a build-to-rent only also goes to show? the success of this government’s campaign against small private landlords.
The announcement comes just five days after Hammerson posted its largest annual loss ever of £1.7 billion.
Mark Bourgois, Hammerson’s UK and Ireland boss says the landmark development follows huge changes to the shopping landscape as online shopping and Covid have impacted consumer behaviour.
Hammerson has announced that it has applied to Leicester City Council for change of use permission for the former retail store at High Cross, St Peter’s Lane.
“While the structural shift in retail and changing consumer shopping habits have meant that destinations such as Highcross need to adapt their offer and mix of uses, well-connected city centre locations such as this will always be places where people want to be,” Hammerson says.
Hammerson is working with a build-to-rent developer and management specialist which already operates some 2,000 units across the UK to prepare its planning proposals (see main pic) and redevelop the site.
The Leicester site is to hold 300 apartments all of which will be rented out and follows a consultation with local residents which saw 80% support the new approach for the site.
Landlords angry at being forced to obtain EPCs despite the pandemic
Some landlord groups have expressed their frustration at being expected to obtain Energy Performance Certificates (EPC) during the pandemic.
New government advice for landlords and letting agents reiterates the need to arrange for an accredited assessor when selling or letting a property, despite it not being essential safety work.
Guidance for England and Wales states that if they can’t arrange an energy assessment, it should be rescheduled, adding: “If all reasonable efforts have been made to obtain a valid EPC but this has not been possible, a further 21 days are allowed as a grace period. After this period, enforcement action can be taken.”
The National Residential Landlords Association (NRA) has called for delays or an extension to the expiry date of non-urgent inspections, just as the government has allowed for vehicle MOTs.
John Stewart, deputy policy director, said “The impact of extending EPC renewals would affect relatively small numbers as they are valid for 10 years, and at worst this would mean a few non-compliant properties will be let for a short period.”
Warning to landlords of increased future rent arrears
Coronavirus has meant that average tenant in arrears owed almost a fifth more in May than they did in January this year, according to a leading rental payment automation platform.
The report warns that as we approach the end of the furlough scheme at the end of October, landlords should prepare themselves for further increases in rent arrears as redundancies rise.
From TODAY, 1st August, employers will be once again required to make National Insurance and pension payments for furloughed workers, which may well result in a spike of redundancies if bosses are unable to afford these additional costs.
From 1st September, employers will have to contribute 10% of the wages of furloughed staff, rising to 20% in October before the scheme is wrapped up at the end of October.
In addition, some employees may already be feeling the pinch as commuting costs re-emerge and the option to spend in pubs and restaurants is an option once again.
As the Government support gradually reduces, landlords will have to prepare for more tenants being unable to pay their rents.
What are tenants asking Google?
The most common questions tenants asked Google in April were:
‘Can landlords increase rent’ – 3,200 Google searches
‘Can landlord evict me’ – 1,880 Google searches
‘Responsibilities as a tenant’ – 1,600 Google searches
‘Can letting agents charge fees’ – 760 Google searches
‘Can landlord keep deposit’ – 550 Google searches
‘What are tenancy fees’ – 250 Google searches
‘Can you paint a rented house’ – 220 Google searches
‘Does landlord have to fix boiler’ – 130 Google searches
‘What is landlord responsible to repair’ – 110 Google searches
Given that there are about 4.5 million renters in the UK this does not represent a high proportion of in-the-dark tenants but the results do point to rent increases and evictions being of some concern.
New Government online system for landlords to receive tenant benefit payments
The Government’s Department of Work and Pensions (DWP) has announced an online system to replace the paper-based method for landlords and lettings agents applying to receive direct payments from tenants on Universal Credit.
Previously, landlords and lettings agents who wish to apply for an Alternative Payment Arrangement (APA) to have the housing element of Universal Credit paid directly to them, have to download and complete the UC47 form from GOV.UK.
But following a trial last year run by Caridon Landlord Solutions, an online system has been launched that promises to reduce the processing time down from in excess of three weeks to just two hours in some cases.
One commentator said: “This is excellent news for landlords and tenants, as well as all those new claimants who have recently been forced to sign up to Universal Credit due to Covid-19.
“For those struggling to manage their finances, it provides a much simpler route for tenants and landlords to request that the housing element of Universal Credit is paid directly to their landlord.
“The old paper forms, which required landlords to fill out, scan and email or post back, were not only time consuming but also took weeks process, sometimes getting lost along the way with rent arrears simultaneously mounting up.
“Given how stretched DWP’s resources are as a result of the pandemic, it is fantastic that they have managed to launch this important improvement to the system which will help those struggling to manage their finances.”
NRLA releases templates to help landlords during coronavirus
The National Residential Landlords Association has developed a range of templates that can be used to contact tenants about coronavirus-related issues.
They show how landlords can approach tenants to check if they are okay, or are facing any issues with work, or are self-isolating.
The other templates, all of which are only available to members, cover scenarios such as if a tenant has requested a rent break or has fallen into arrears.
There are also documents for landlords who want to offer a rent holiday, request inspections for gas and electrical safety and to cover where university students are requesting an early surrender of their tenancy.
The documents only relate to England and Wales.
Templates for members of NRLA
Government confirms maintenance can still be carried out on rental homes
The Government has confirm that maintenance on rental homes can still be carried out.
The guidance, issued yesterday, says “Work carried out in people’s homes, for example by tradespeople carrying out repairs and maintenance, can continue, provided that the tradesperson is well and has no symptoms. It will be important to ensure that Public Health England guidelines, including maintaining a two metre distance from any household occupants, are followed to ensure everyone’s safety."
“No work should be carried out in any household which is isolating or where an individual is being shielded, unless it is to remedy a direct risk to the safety of the household, such as emergency plumbing or repairs, and where the tradesperson is willing to do so."
“In such cases, Public Health England can provide advice to tradespeople and households."
“No work should be carried out by a tradesperson who has coronavirus symptoms, however mild.”
Four year high property sales in February before the coronavirus outbreak
The highest number of property completions was recorded by HMRC for February since 2016. aThis was a snapshot of the property market in the run-up to the coronavirus outbreak in the UK.
The taxman’s UK property transactions statistics for February suggests seasonally adjusted sales were up 6% annually last month and 4.5% since January to 103,870.
This is the highest figure for the month for four years when there was a rush of sales before the introduction of the additional Stamp Duty rate.
Sales increased across England, Scotland, Northern Ireland and Wales.
On a non-seasonally adjusted basis, sales were up 8.4% annually and increased 14.1% since January to 86,980.
But much has changed in the market since February as the coronavirus outbreak hit the UK.
The UK is now in lockdown – albeit not as strict as other countries – which could mean completions are delayed and offers fall through in the coming months.
Housing Market hit by Coronavirus
The Daily Telegraph claimed yesterday that the housing market recovery is being “killed off” by the coronavirus outbreak with viewings down 50%.
The story quotes Mark Hayward, CEO of the NAEA, as saying that there has been a “marked reduction” in viewings over the last ten days.
He says of estate agents: “Cash flow is critical. If they have been experiencing a tough time and times toughen even further, there may well be some casualties.”
However, housing analyst Henry Pryor threw off the gloom in a tweet yesterday, saying: “I’ve not witnessed this nor have I heard estate agents mention it. I viewed 19 properties last week. Looks to me like a most unhelpful sort of self-fulfilling prophecy.”
He added: “50% collapse in property viewings apparently . . . I’ve not seen anything like this, have any other agents witnessed this kind of drop off?”
But one agent said that viewings are indeed a concern.
Rhys Williams said: “It’s absolutely relevant and has been mentioned at least once a day to our office.
“It’s entirely irresponsible to assume tenants and vendors are happy with random applicants [traipsing] through their homes. Duty of care.”
Some agents are utilising virtual tour technology. For example, RedDoor Homes in Kent has produced a video tour per property: individual viewings are bookable per time slot just as though they are ‘real’ viewings, with a member of the sales team ‘attending’ each one.
Martin Roberts Homes Under The Hammer show shut down by tenants' union
Homes Under The Hammer star, Martin Roberts in Scotland has had a property seminar shut down by protesters.
The country’s tenants’ union Living Rent surrounded the entrance to the Making Money from Property event at Edinburgh’s Hilton Hotel, which aimed to show attendees how to maximise profits, calling for rent controls.
One of a series of events organised by Martin Roberts from BBC’s Homes Under the Hammer, it was called off after 50 protestors gathered outside and challenged organisers.
A spokeswoman for Asset Academy, which runs the events, said “We appreciate that high rents in city centres are causing issues, and have sympathy with the concerns of tenants in these places and any groups representing them. ?However, the property training courses that Martin Roberts has co-developed with Asset Academy are designed to show people how to do things correctly. We teach how to be a proper, professional landlord, who abides by regulations and offers quality properties in the much-needed private rental sector.”
Although Roberts himself wasn’t at the Edinburgh event, aspiring landlords were expecting tips about how to acquire finance, beat the competition, and calculate their maximum price – complete with training videos and e-books.
Despite the setback, the Martin Roberts roadshow continues its journey around the UK, hitting Luton and Taunton on Wednesday and Northampton and Exeter on Thursday, with more locations planned throughout March. The free two-hour sessions are a taster of the presenter’s three-day property training workshops which will set you back £997.
Living Rent says these seminars underline the need for the Scottish Government to introduce rent controls, so that tenants aren’t forced into poverty by high rents. Living Rent member Claire Thomson says: “The fortunes these people promise don’t come out of nowhere, they come from tenants who are already desperately struggling to make ends meet. It has to stop.”
Some letting agents flouting tenant fees and excessive deposit ban
Some letting agents could be breaching the tenant fees ban with charges and excessive deposits.
Publication the ‘i’ says that regulator the National Trading Standards Estate and Letting Agency Team is aware of 18 cases.
If the agents are found to have breached the legislation, they could be penalised a total of £45,000.
The piece also quotes the experiences of tenants, including Georgie Laming and Sorana Vieru who were charged a £170 check-out fee by Winkworth.
Vieru said that although some fees listed in the original agreement no longer applied, Winkworth still tried to insist they paid for a check-out inventory.
Vieru claimed that after Winkworth threatened to take the money out of their tenancy deposit, they reported Winkworth to Trading Standards.
Veiru claimed: “I stuck to my guns and insisted on communicating by email, knowing I might need evidence in the future if I had to complain to a redress scheme.
“I wrote a complaint letter to the director and reported them to Trading Standards.
“In the end, the agency’s director replied, backing down and blaming ARLA for advice they received.”
A spokesperson for the Winkworth office in Harringay said: “The check-out fee has to be paid to the inventory clerk for providing the check-out service for the landlord and tenant.
“In this case, under new legislation, it was for the landlord to pay and not the tenant because there had been a renewal of the tenancy.
“We are sorry for any confusion caused to the tenants.”
Edinburgh authorities crack down on Airbnb lets
Four flats within one Edinburgh block were served with orders stopping them being rented out via short-lets platforms.
Edinburgh’s crackdown on Airbnb rentals has started in earnest as four flats in one city tenement block have been served enforcement notices.
It follows a report out this week that reveals Edinburgh Old Town has the highest incidence of Airbnbs in the UK, with 29 active listings for every 100 properties, according to data gathering firm Inside Airbnb. Last month, Housing Minister Kevin Stewart announced measures to let local authorities start licensing schemes for short-term lets from spring 2021. These aim to regulate the sector which is being blamed for helping to create a housing crisis in the region’s cities.
Councillor Neil Gardiner, Planning Convener, said 'It’s really encouraging to see the existing powers we have through enforcement are working. This is resource intensive though and we’re continuing to work with the Scottish Government to introduce a licensing regime which will give us far greater control over the sector in the future.'
The four city-centre flats, at 68B Grassmarket, all received their orders to stop operating as short-term lets on 28 January, but the notices have only been public now. The council says it took the measure to protect quality of life for other residents in the building.
The number of Airbnb guests, two per flat, and high level of turnover, also led to the enforcement notice with planners stating the use 'is causing disturbance to the established residential character of the building'.
Christopher Pincher is this week’s Housing Minister
The revolving door of housing ministers continued yesterday with Johnson sacking Esther McVey after just seven months in the role and the appointment of her successor, Christopher Pincher - who becomes this week's Housing Minister.
He'll be the 11th housing minister in ten years, the tenth since the Tories came to power in 2010, the seventh since the EU referendum, and the 19th since 1997.
McVey, a former TV presenter, was appointed last July and will be little remembered from her short stint setting up an expert council to support technological innovation in the property sector, extending Help to Buy mortgages from 25 to 35 years and providing funding for the development of carbon-free homes in Yorkshire.
Landlord faced with £73000 rent arrears bill from Embassy
This diplomatic incident over unpaid rent at the Romanian embassy makes most landlords’ rent arrears seem trivial.
The Romanian government is refusing to pay a staggering £73,270 in outstanding rent on a former ambassadorial residence in Hyde Park, The Times reports.
Diplomats insist they are not liable for the last six months of the lease on the £12,000-a-month tenancy due to a “gentleman’s agreement”, despite a High Court order made in December.
When Romania refused to pay, The Foreign and Commonwealth Office (FCO) intervened on behalf of landlord Christopher Christos, who took the embassy to court where it was ordered to pay the rent owed, along with £3,660 in legal fees.
The embassy says a “gentleman’s agreement” had been set up by the property owner and the new Romanian ambassador, Dan Mihalache, who had recently moved into the property. Officials say they were told that they could terminate the tenancy agreement six months early.
Mr Christos, who bought the five-bedroomed property in 2007 for £2.8 million, argues that the agreement was made on the basis that he could find another tenant, which he was unable to do. He adds that the Romanian ambassador remained until the formal end of the tenancy in April 2019.
Off plan investors given more protection following Andrew Lloyd Webber case
Investors scored a victory when the First-tier Tribunal (Tax) ruled in favour of Andrew Lloyd Webber against HMRC for his capital gains tax rebate claim, over the development of a luxury beachside mansion in Barbados which was never completed.
Following this ruling, off plan property buyers now have more confidence to invest in potentially risky developments after a tribunal ruled they can claim tax relief on losses if their investment fails.
Lord Lloyd-Webber and his wife won their legal battle after the tax authority said they could not offset £6.25m they had lost, for tax purposes.
Lord and Lady Lloyd-Webber invested in the Clearwater Bay property development project in 2007, entering into contracts to buy two plots of land and two villas, due to be part of a large holiday homes complex.
But the couple’s planned £14.3m venture failed in February 2009 when property developer Cinnamon 88 suspended construction during the financial crisis.
They had claimed the sums paid as capital losses, which they’d tried to offset against other capital gains realised by them, but this was rejected by HMRC.
The Tribunal subsequently ruled that the £6.25m had been paid by the Lloyd-Webbers for the acquisition of their rights under the 2007 Contracts.