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Em

Em Morley

Changes in homelessness rules affect landlords

Published On: October 30, 2012 at 3:40 pm

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Categories: Landlord News

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New processes affecting how the homeless must appeal for help finding property will have consequences for private landlords. From the 9th November this year, local authorities will have to adhere to fresh rules when housing these types of tenants.

Private sector strain

The new statutory requirements are likely to put more of a strain on the privately rented sector to house tenants. This will be felt particularly in places where the Local Housing Allowance is lower than local market prices.

Changes in homelessness rules affect landlords

Changes in homelessness rules affect landlords 

Homeless people searching for housing had previously been put onto social housing waiting lists. Under the new requirements, local councils are likely to give tenants private accommodation and are being encouraged to do so as opposed to putting people through the traditional homeless assessment. This is likely to be the case even in instances where tenants have been fully assessed.

Expensive

In more wealthy areas of the country, local authorities could be forced into negotiation to secure the best outcome for themselves and private landlords. One option is to assess whether landlords can drop their rent to match Local Housing Allowance rates to accept social tenants. Alternatively, they could be forced into financial difficulty if they up LHA to private rent levels.

Bankruptcy?

An expert in landlord and tenant law believes that the changes could, in extreme circumstances, leave local housing departments facing bankruptcy. Ben Reeve-Lewis said that private landlords and local authorities should work together to avoid this happening.

 

 

Universal Credit tenants helped to manage money

Published On: October 30, 2012 at 12:49 pm

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Categories: Finance News

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Claimants of the new Universal Credit will be given support in the form of new financial products, the Government has announced.

What is Universal Credit?

Universal Credit will see a number of existing benefits, such as Local Housing Allowance, merged into one.

At present, Local Housing Allowance is paid to tenants claiming benefits in private rented accommodation. This process had led to repeated concerns from landlords that tenants are struggling to manage their finances. In turn, this has led to many facing rent arrears.

Welcome

Watchdog group Consumer Focus has welcomed the announcement. Andy Burrows, head of post offices at Consumer Focus, said that the move would aid claimants to properly manage their finances. He said that, ‘our research shows significant need for budgeting bank accounts, often referred to as jam-jar accounts to help people manage what will be a major change in how benefits are paid.’[1]

He went on to say that it was crucial that assistance is given to those receiving Universal Credit, saying that, ‘people who could be badly affected by the introduction need help as those, ‘without assistance may face real problems paying rent, utility bills and other essential payments.’[1]

Universal Credit tenants helped to manage money

Universal Credit tenants helped to manage money

 

 

Affected

The introduction of Universal Credit will see the housing benefit part of the payment given directly to claimants and not landlords. All Universal Credit payments will be provided on a monthly basis.

Research from the Customer Focus group shows that 36% of Universal Credit claimants will be adversely affected by the switch to monthly payments. 30% said that they were struggle with having housing benefit being paid directly to them.[1]

Of those who claim that they could be adversely affected, 58% said they would have to change their budgetary plan. Furthermore, 35% said that they could potentially struggle to budget for basic groceries, 34% for energy bills and 16% for rent.[1]

[1] http://www.landlordtoday.co.uk/news_features/Universal-Credit-tenants-to-be-helped-to-manage-money

 

 

 

 

Why Flat Share Couples Can’t Move

Published On: October 26, 2012 at 5:02 pm

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Categories: Finance News

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Many couples cannot afford to rent or buy a house and are therefore renting out a room in shared accommodation, revealed flat and house sharing website SpareRoom.

Why Flat Share Couples Can't Move

Why Flat Share Couples Can’t Move

This is sometimes the only option available to couples that live in expensive parts of the country, for example London or the South East. In both of these parts, rents are much higher than the national average, and even salaries.

For these couples, their hopes of getting married or having a family often have to be paused. Of couples living in shared houses, 44% said that their housing situation is affecting their plans to start a family in the near future. A further 36% said that their accommodation would affect their plans soon.

14% of couples think that they will never be able to buy their own house, and 13% do not believe that they will ever manage to afford to rent their own place.

Couples living in shared houses often struggle to save enough money to buy their own house. Just 21% were capable of saving money towards a deposit, as the increase in the cost of living means that they do not have enough spare income, despite comprising by living in shared accommodation.

Matt Hutchinson, Director of SpareRoom says: “It’s an unfortunate predicament that many couples living in flat and house shares can’t even afford to rent on their own, let alone buy a home together.”1

1 http://www.justlandlords.co.uk/news/Flatshare-Couples-Unable-to-Move-1475.html

Calls for benefit tenants’ rent to be paid to landlords

Published On: October 26, 2012 at 11:07 am

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A recent move to pay housing benefits directly to landlords as opposed to tenants in Northern Ireland has provoked calls for the scheme to be extended throughout the U.K.

After lengthy discussions with U.K Minister Lord Freud, the Social Security Minister for Nothern Ireland has recently confirmed the move in a speech to the Assembly.

Important Change

In his address to members, Nelson McCausland was confident that the reforms would have a positive outcome. He said, ‘this is an important change as it will help to avoid rent arrears, with all the implications that can have for claimants and their families.’[1]

Calls for benefit tenants' rent to be paid to landlords

Calls for benefit tenants’ rent to be paid to landlords

 

 

Risk 

At present, Local Housing Allowance is deposited directly to tenants. It is also commonly expected that the new Universal Credit will also be paid to tenants. This has drawn concern from many private landlords who feel that rent may not be passed onto them. Studies have also shown the many tenants would feel more comfortable with rent being given directly to their landlord.

Financial responsibility

Despite the concerns, Ministers from the Department of Work and Pensions argue that giving payments to tenants helps to improve their financial responsibility.

However, Chris Town, vice-chairman of the Residential Landlords Association, feels that the moves in Northern Ireland should be replicated in the rest of the U.K. Town said that, ‘With 9.1% of all rent in the private rental sector being in arrears, this is a situation which is simply not sustainable for either tenant or landlord.’

‘Both parties in the Coalition before the general election pledged to introduce direct payments to landlords. Organisations working with tenants including Shelter, Citizens Advice and the Money Advice Trust all support tenants having the choice to have their rent paid directly to landlords.’

‘The Government should get out of the way and trust tenants to know what is best for them.’

’If it’s good enough for Northern Ireland it should be good enough for the rest of the country.’[1]

Registers

The Northern Ireland Assembly has also given the green light to rules that give councils the opportunity to build registers of landlords and in their operational areas. Head of Policy and Public Affairs at the Chartered Institute of Housing Northern Ireland Jennifer Donald, welcomed the move. Donald said, ‘The private rented sector has grown really rapidly here. It is now bigger than the social rented sector by 2% to 3%.’

‘These regulations are important, primarily to help us get a better sense of the private rented sector.’[1]

[1] http://old.lettingagenttoday.co.uk/news_features/Housing-benefit-tenants-rents-to-be-paid-to-landlords-in-jus-one-part-of-UK

 

 

 

Private Tenants Sign On for Housing Benefit

Published On: October 25, 2012 at 10:21 am

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A worrying new report from the National Housing Federation shows that more families are signing on for housing benefit each month.

The report, entitled Home Truths 2012, suggests that in excess of 10,000 new families per month are signing up for housing benefit, in order to assist with rental costs. The report also offers a damning assessment on the current housing market, describing it as unsustainable. It also suggests that not enough new homes are being built, which in turning is dangerously limiting supply and driving up prices.

Rise

Private Tenants Sign On for Housing Benefit

Private Tenants Sign On for Housing Benefit 

Home Truths 2012 reports that 86% more working people are receiving housing benefit than three years ago. This adds up to over 900,000 working claimants.[1]

Chief Executive of the National Housing Federation, David Orr, said: “We now have millions of families struggling to keep on top of their rents, priced out of the housing market, and nearly 10,000 more working families every month are now reliant on housing benefit to help pay their private rent.”[1]

Orr describes these people as the “strivers” that the Government is trying to assist, but says at present, “their future is looking bleak.”[1]

Costs

More interesting statistics from the report include the cost of renting, which has risen by 37% over the last 5 years. Predictions are that rents will soar by a further 35% in the next six years.[1] With rents rising at a quicker rate than house prices, fears are that the taxpayer will be hit in the pocket as a result.

Orr suggested that the situation is bleak, saying: “The housing market is at the point of no return, with rising house prices, rising rents and millions of families really struggling to afford their home.

“It’s no surprise that one in 12 families in England is on the waiting list for social housing. Sadly, the future is looking even bleaker.

“Successive governments have failed to tackle the under-supply of housing and time is now running out. If we don’t urgently fix the housing market we will have a generation who are priced out of renting a home, let alone buying one.”[1]

The National Housing Federation has urged not only the Government, but the housing industry as a whole, to come together to help solve the housing market problems. Housing minister Mark Prisk acknowledged the severity of the situation. Speaking on Radio 4’s Today programme, Prisk said that the Government is not “complacent about the challenge.”[1]

[1] http://old.lettingagenttoday.co.uk/news_features/Thousands-more-private-tenants-sign-on-for-housing-benefit

 

 

Unlawful landlords give decent majority a bad name

Published On: October 25, 2012 at 10:09 am

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Categories: Landlord News

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The chairman of the Residential Landlords Association was recently critical of unlawful landlords giving the majority of fit and proper owners a bad name.

Speaking at a conference organised by the National Approved Letting Scheme, Alan Ward projected his disgust at the term, ‘rogue landlords’ being used in the media. Ward thinks that this term illustrates something mischievous rather than dangerous or illegal.

As an alternative, Ward suggests the use of the term, ‘criminal.’ This, he believes will go some way to both prevent the rest of industry gaining a bad name, alongside bringing more prosecutions.

Other issues

Mr Ward spoke about various other issues that were detrimental to buy-to-let investors, such as over-priced mortgages and selective licensing schemes. He suggests that the former is a major problem in the midst of recession and that prices are, ‘four or five times what they were a few years ago.’[1]

Unlawful landlords give decent majority a bad name

Unlawful landlords give decent majority a bad name

 

 

Optimism

Despite Ward’s comments, the Landlord Centre recently released figures suggesting that buy-to-let finance is still readily available at a competitive rate. Further optimism comes from figures obtained by the Financial Times earlier on in 2012. The figures show that the average fixed rate for a rental property feel to 4.82% in the first quarter of 2012, down from 4.93% during the final quarter of 2011.[1]

Andrew Young of the Landlord Centre, said these figures, ‘reflects the resilience of the buy to let mortgage market.’[1]

Local authorities and the Health and Safety Executive have promised tighter observations on landlords who do not follow letting guidelines. These observations will become especially tight when it is suspected that tenants lives are in danger.

[1] http://www.landlordexpert.co.uk/2012/10/25/unlawful-landlords-give-the-decent-majority-a-bad-name/