Written By Em

Em Morley

Government Should Enforce Lettings Fee Laws it Already has, Insists RLA

Published On: September 6, 2017 at 8:02 am

Author: Em Morley

Categories: Property News

Tags: letting agent fee ban,letting agents,lettings fees,tenants

Government Should Enforce Lettings Fee Laws it Already has, Insists RLA

The Government must do more to enforce the lettings fee laws it already has, which were designed to improve transparency around letting agent fees, before looking to ban them outright, insists the Residential Landlords Association (RLA).

MPs are debating plans to ban letting agents charging fees to tenants today.

Since May 2015, lettings fee laws have compelled letting agents to publish details of the fees they charge. Agents breaking this law can be fined up to £5,000.

Figures published earlier this year by the National Approved Letting Scheme (NALS) found that, after two years of the lettings fee laws coming into effect, 93% of councils had failed to issue a single financial penalty to a letting agent for breaching the rules. Only three penalty notices had been served across England for failure to display all relevant landlord and tenant fees.

Almost 60% (59%) of councils admitted that they do not consider the displaying of lettings fees to be a high priority for the allocation of resources within Trading Standards, while 45% said they only undertake reactive enforcement activity.

Instead of banning letting agents from charging fees to tenants, the RLA is calling for immediate action to better enforce the lettings fee laws that are currently in place. This includes the Government using powers it has so far failed to use to force agents to display the fees they charge in prominent positions and specify them in much greater detail.

The organisation is also calling for letting agents found guilty of breaking the transparency rules to be fined much more than they are at present. The RLA suggests that fines should be up to £30,000.

David Smith, the Policy Director of the RLA, insists: “Laws without proper enforcement serve only to let tenants and good landlords down.

“Rather than pressing ahead with plans for more legislation in the sector to ban letting agent fees at an unknown time in the future, ministers could achieve greater and earlier impact by using the powers they already have to improve transparency and introduce far tougher penalties for agents found to be breaching the law.”

He adds: “This would send a clear message that enforcing bodies will not tolerate any letting agents flouting the law.”

Could reviewing rent collection process recoup thousands on unpaid rent?

Published On: September 5, 2017 at 2:08 pm

Author: Em Morley

Categories: Landlord News

Tags: landlord,letting agents,rent arrears

Letting agents could be able to claim back thousands in unpaid rent for their landlord clients, simply by reviewing their rent collection procedures.

Automated rental platform PayProp made the statement, suggesting that manual reconciliation and reactive, ad hoc management of arrears could be costing agents and landlords vast sums in unpaid rent every year.

Rent Arrears

Research from the Residential Landlords Association indicates that 28% of landlords have experienced rent arrears during the last year. A separate study earlier this year from Your Move discovered that nearly 9% of tenants in England and Wales were in rent arrears.

PayProp has described the process of reconciling payments manually, still a process carried out by many agents, is: ‘labour intensive and open to human error.’

As a result, the firm is advising agents to review their rent collection procedures and to employ automation in order to remind tenants that their rent is due and if they miss a payment.

Neil Cobbold, Chief Operating Officer of PayProp in the UK, noted: ‘Sending letters to chase unpaid rent is an outdated and largely ineffective process. It’s easy for tenants to ignore letters and it’s also a waste of paper – particularly if this approach garners few results.’[1]

Could reviewing rent collection process recoup thousands on unpaid rent?

SMS Success

In contrast, Mr Cobbold said that SMS reminders are the most efficient and successful method of chasing rent arrears.

Figures released from PayProp indicate that 61% of customers in arrears either settle or arrange payment within 48 hours of being reminded by SMS.

Concluding concludes: ‘When it comes to payments we’re of the viewpoint that many agents’ current method of collection and reconciliation is outdated and inefficient. We passionately believe that an automated rental payments process can save agents money and time, while also helping them to generate more revenue and grow their lettings book.’[1]

[1] http://www.propertyreporter.co.uk/landlords/rent-collection-review-could-return-thousands-in-unpaid-rent.html

RLA offers online fire safety course for landlords

Published On: September 5, 2017 at 11:46 am

Author: Em Morley

Categories: Landlord News

Tags: fire,fire safety,fire safety for landlords,RLA

Buy-to-let landlords looking for fire safety guidance following the Grenfell Tower tragedy can access an online fire safety course, launched by the Residential Landlords Association.

This new course will cover different regulation relating to fire safety, including HMO Manager regulations and Smoke and Carbon Monoxide Alarm (England) regulations 2015.

Property Types

The course covers different building and property types and all types of legislation that apply, alongside a practical guide to conducting fire risk assessments to protect both tenants and property from fire.

Prices are available from £16 for RLA members and £20 for non-members.

RLA offers online fire safety course for landlords

RLA trainer Carrie Kus, noted: ‘The horrific loss of life following the Grenfell Tower disaster has left the whole nation in shock and landlords from all tenures are now asking if they are doing enough. The legislation relating to fire safety in the private sector is complex and varies depending on the type of building and how it is leased out.’

‘This course takes this complex area and breaks it down making it easy for the average landlord and managing agent to disseminate what they need to do to keep their tenants and their properties safe from fire,’ she continued.[1]

Landlords should also source our free comprehensive guide to Fire Safety, available in our Guides section.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/9/new-online-fire-safety-course-for-landlords

Letting Agent Excluded from TPO for Four More Years

Published On: September 5, 2017 at 10:01 am

Author: Em Morley

Categories: Property News

Tags: letting agents,redress scheme,rogue letting agents

Letting Agent Excluded from TPO for Four More Years

The Property Ombudsman (TPO) has extended its exclusion of a letting agent by an additional four years, after seven more landlords raised disputes against the firm.

Premier Property Management (PPM), based in Truro, Cornwall, was originally expelled by the redress scheme in November last year, after it was discovered that the agency had failed to pass on rent payments and delayed handing over deposits to a landlord.

PPM was initially excluded from TPO for a period of two years, but the expulsion has now been extended following additional complaints by landlords, which resulted in awards totalling £20,566.23.

The punishment means that PPM can no longer trade legally, although it appears that the company is no longer trading and the website is no longer active.

The Chairman of TPO’s board, Gerry Fitzjohn, says: “While it is believed that the firm is no longer trading, we have taken action to ensure the firm’s expulsion is extended so they are unable to trade if they attempt to register with any redress scheme.

“We have also alerted the relevant authorities concerning their conduct. We urge consumers to always check their sales or letting agent is registered with TPO and following the scheme’s Codes of Practice, which offer additional safeguards to protect consumers from unfair practices.”

In coming to a judgement on each case, TPO considered the evidence presented by landlords, which included emails and bank statements, and the standards set out in TPO’s Code of Practice.

TPO, Katrine Sporle, also comments: “This agent’s behaviour fell well below the standards expected, and their systematic failure to pass on rental payments and deposits received has affected the lives of several landlords.

“Cases like these are fortunately extremely rare, but do highlight the importance of consumers keeping their own written records, so I can review emails, bank statements and correspondence as part of my investigation to determine if the agent has acted fairly.”

Landlords, remember to always check whether your letting agent is registered as part of an approved redress scheme, such as TPO.

Landlords Given Power to Report Late Rent and Avoid Problem Tenants

Published On: September 5, 2017 at 9:37 am

Author: Em Morley

Categories: Landlord News

Tags: credit rating,rent payments,tenants

Landlords have been given the power to access more in-depth credit information about potential tenants and report late rent payments to credit reference agencies, with the help of a new online tool.

Landlords Given Power to Report Late Rent and Avoid Problem Tenants

The credit check service, which has been launched by Landlord Secure, will give landlords a far more comprehensive overview of a new applicant tenant’s credit history, by revealing if the applicant is in arrears with loans or credit cards, and even how much of their credit they are using.

Previously, credit reference agencies were only able to provide identity verification, residential history and publicly available information on a tenant, such as County Court Judgments (CCJs) or bankruptcies, rather than giving an insight into their current credit status.

The new tool will allow landlords to view how many active accounts an applicant has and which are being paid on time, the total balance of unsecured accounts in the previous month, and the worst status of any active accounts for a minimum timeframe of three months before an application was made. This will help to assess affordability and mitigate risk.

Landlord Secure has also recently launched another free tool, LateRent, which allows landlords to report payment history to credit reference agencies, enabling them to conduct robust affordability assessments on potential tenants.

The move comes after the Residential Landlords Association (RLA) called for credit reference agencies to include rent payment history, to aid in the calculation of credit worthiness and affordability of renters.

LateRent will report a registered tenant’s monthly payment status, and this will show up on any future credit searches carried out by financial institutions.

The system also allows tenants who pay their rent on time to build up a good credit history, which could assist them with future mortgage or credit applications.

The Managing Director of Landlord Secure, Steve Burrows, says that the new tools will be a benefit to good tenants, while improving the lettings process for landlords: “Chasing late rent payments can be an all too familiar issue for landlords to find themselves in. Tenant vetting checks and referencing services are meant to help them avoid these problems, but most are not comprehensive enough and the information they gather doesn’t present an accurate picture of an applicant’s current credit status.

“This new credit check service, coupled with the LateRent platform, will make it much easier for landlords to select the appropriate tenant. It will also enable tenants who pay their rent on time to build up a better credit history, which may help later if they apply for other credit or financial products.”

Landlords, remember that the best way to protect your pocket against tenant rent arrears is with Rent Guarantee Insurance: https://www.justlandlords.co.uk/rentguaranteeinsurance

Buy-to-let alterations could result in stock surge

Published On: September 5, 2017 at 9:10 am

Author: Em Morley

Categories: Finance News

Tags: Buy-to-Let,landlords,rental properties,rents

Alterations to buy-to-let lending criteria being introduced at the end of September are set to entice a surge of rental stock, with landlords looking to offload properties that are not giving them substantial yields.

From 30^th September, the Bank of England’s Prudential Regulation Authority is set to tighten lending criteria still further, following the introduction of stress tests earlier in 2017.

Scrutiny

Mark Lawrinson, regional director of London agency Portico, believes that landlords will have their entire portfolio scrutinised when applying for additional buy-to-let funding.

‘If you have six properties and four are generating enough rental income to cover mortgage payments and then some, but the other two are not, your new mortgage application may not be approved by some lenders,’ Mr Lawrinson explained.

Lawrinson said this could signal the start of a period of rental properties coming to the market, with landlords looking to offload those generating the lowest returns.

‘The new rules could also have a knock-on effect on rental prices, as landlords look to cover any shortfalls or carry out works to a property to both increase the capital value and the rent, in turn improving the yield and the return,’ he continued.

Buy-to-let alterations could result in stock surge

Re-mortgaging

Richard Blanco, representative of the National Landlords Association, feels it could already be too late for landlords looking to remortgage before the new criteria comes into effect.

Mr Blanco observed: ‘Many lenders will unfairly assess landlords’ existing mortgages through a 145% x 5.5% prism even though they originally got their mortgages on looser criteria years ago. This could create mortgage prisoners: borrowers who are unable to switch lenders. This is a reminder that if you do remortgage to another lender, always choose one that has a good track record in switching customers to competitive follow on rates once the initial product has expired.’[1]

Concluding, Mr Lawrinson said: ‘We have certainly seen less professional landlords adding to their portfolio this year, but there is still money to be made in buy-to-let if you invest smartly.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/9/buy-to-let-lending-changes-could-result-in-rental-stock-surge