Posts with tag: ARLA

12-month contracts for tenants made mandatory by Welsh Government

Published On: February 12, 2020 at 9:35 am

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It has been announced that 12-month contracts will become mandatory in Wales’ private rental sector (PRS), under the new Renting Homes (Amendment) (Wales) Bill.

This will mean that Welsh landlords can’t serve notice during the first six months of a new tenancy. The subsequent notice period will be extended from two months to six.

In the situation that a landlord wished to repossess their property, it will now take at least a year.

This new rule will only apply to ‘no-fault’ repossessions. Shorter notice periods will still be allowed for possession notices issued when a contract has been breached under current Section 8 rules.

RLA warning

The Residential Landlords Association (RLA) has warned that many landlords use the ‘no-fault’ repossession route when tenants are not paying rent, are making neighbours’ lives a misery or are wilfully damaging the property because the alternative is not fit for purpose.

Douglas Haig, RLA vice chair and director for Wales said: “While we acknowledge the minister has recognised the complete removal of Section 21 would be bad for the sector, we are disappointed with today’s proposals.

“It is absolutely essential that landlords with a legitimate reason to repossess their property are able to do so.

“If they do not many could opt to leave the market altogether – leaving renters with fewer options and potentially pushing rents up.

“The government says that those with grounds to repossess can still give the shorter notice period using Section 8.

“However, RLA research shows 83% of landlords who used Section 21 had done so because of rent arrears alone. Over half had experienced anti-social tenants. 

“This proves that despite having grounds to evict landlords are currently five times more likely to use the ‘no fault’ Section 21 notice, due to the lengthy court waiting times and expense associated with Section 8.

“Despite this, proposals do not include any plans to reform the grounds process, something we believe is vital before any change of this kind is made, to avoid a devastating cut to the supply of homes to rent in Wales at a time when demand continues to grow.”

When will the law change?

Following a consultation that took place last year, the new law has now been introduced before the Senedd by Minister for Housing and Local Government Julie James.

The Minister says this will provide greater security for tenants in the PRS, while still allowing landlords to take back their properties ‘in a timely manner’ where the tenant is at fault.

The Bill amends the Renting Homes (Wales) Act 2016. It is anticipated to come into force in the spring of 2021.

Announcing the change, the Housing Minister said: “The new Bill I am unveiling today will add further significant protections for those who rent their home in Wales to those already included in our landmark Renting Homes legislation.  

“These include, ensuring that a possession notice where there is no breach of contract cannot be served for the first six months of occupation, and where possession is sought, giving the contract holder six months’ notice. 

“This will provide valuable time for individuals and families faced with possession under section 173 and the organisations and agencies that support them, to find a new home that is right for them and make all necessary arrangements for a smooth transition to their new home.    

“I believe the Renting Homes (Wales) Act, as amended, will provide a sound basis for renting in Wales: balancing the needs and rights of both tenants and landlords and helping ensure our PRS is a well-managed option for households.” 

ARLA Propertymark comments

David Cox, Chief Executive of ARLA Propertymark, says: “Extending notice periods from two months to six months under the Renting Homes (Amendment) (Wales) Bill will cause further shockwaves for landlords and agents. The proposals will make it even more difficult for landlords to reclaim possession of their property and add further longevity to an already lengthy and expensive eviction process.

“We are concerned that landlords will have no viable option of evicting problem tenants quickly and efficiently due to current court procedures. If landlords sell up due to the perceived risk, this will shrink the sector and contribute to landlords being more selective about who they let their property to.

“The Welsh Assembly must reconsider extending the minimum notice period and take a long-term, holistic view that supports those who are providing professional and well-managed tenancies.”

Rents for new UK tenancies stable in July

Published On: August 24, 2017 at 9:35 am

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The total number of letting agents who experienced rent rises for their tenants stayed constant at 31% in July, according to the latest private rental survey from the Association of Residential Letting Agents.

This was a rise of 3% on the 28% seen in July, with the report also revealing a further increase in demand.

Demand Increases

In all, the number of properties managed per member branch rose slightly during July, up to 192 from the 190 recorded in June. This is the highest level seen since January, when agents were managing 193 on average.

Year-on-year, this figure rose by 4%, with July 2016 seeing agents managing 184 properties on average. Demand from new tenants rose to 70 in July from 61 in June.

Rents for new UK tenancies stable in July

Rents for new UK tenancies stable in July

David Cox, Chief Executive of ARLA, observed: ‘Landlords really are stuck between a rock and a hard place. All the tax increases they’ve incurred over the last 18 months have meant they either need to sell their properties and exit the market, or increase rent payments to plug the deficit.’

‘Neither of these outcomes benefit tenants. If landlords exit the market, supply is even more strained and matched with growing demand, rent prices will increase anyway. The Government may claim they are helping tenants but the unintended consequences of their actions on the private rental sector are now really being felt by tenants in terms of lack of homes to choose from and the feeling of being constantly priced out of the market. This needs to change,’ he added.[1]

 

[1] http://www.propertywire.com/news/uk/rents-new-tenancies-uk-stable-july-latest-agent-data-shows/

 

 

4,000 agents could lose jobs following ban on fees

Published On: March 28, 2017 at 10:08 am

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New research released by ARLA Propertymark suggests that there are 4,000 jobs at risk, should the proposed ban on agent fees come into force.

In a report presented to the organisation’s annual conference, ARLA said that the ban could cost tenants thousands of pounds.

Funds

The research reveals letting agent fees make up around one fifth of letting agent revenues and provide vital funding for imperative checks required to set up tenancy agreements.

Should fees be banned outright when the Government publishes its consultation, agents will be left with little choice but to pass the cost onto landlords in the form of higher agent fees.

ARLA’s research suggests that 41% of landlords expect that they will have to pass on some of this inflated cost to their tenants. On average, these rises will amount to £103 per year.

If landlords were to pass on the entire uplift in letting agent fees, tenants would be hit more, with typical rises of £275 per year.

In addition, there would be a huge impact on the lettings sector overall, which employs roughly 58,000 across the country.

4,000 agents could lose jobs following ban on fees

4,000 agents could lose jobs following ban on fees

Risks

The report states: ‘If letting agents take the full hit of the letting agent fee ban, 16,000 jobs will be at risk. It’s more likely however agents will pass on 75 per cent of the costs to landlords, which would result in job losses of around 4,000.’[1]

More side effects from the proposed ban include 27% of landlords choosing not to purchase any more rental properties. 20% meanwhile said that they would sell some of their portfolio.

ARLA’s report shows that in Scotland, letting agent fees were banned in 1984 and clarified in the Private Rented Housing Act of 2011.

The report goes on to say: ‘This meant that tenants were only accountable for the rent and deposit, and everything else would be charged to the landlord. However, this has resulted in many agents carrying out less of the tasks they were doing previously. Worryingly, one in four said they no longer do credit checks as standard.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/3/4-000-letting-agency-jobs-at-risk-if-fees-ban-happens-warns-arla

 

Demand for rental property surges in January

Published On: February 23, 2017 at 10:48 am

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There was a surge in demand for rental accommodation during January, according to the latest report from ARLA Propertymark.

Data from the investigation shows that there were 34 would-be tenants per ARLA membership branch last month, in comparison to the 26 seen in December. This represented a rise a 31% month-on-month.

Year-on-year, demand has risen by 10%.

Supply Increases

In addition, the number of rental properties being managed by letting agents also rose in January. Last month, there were 193 properties managed per branch, as opposed to 188 in December.

What’s more, there has been a 12% year-on-year rise.

23% of agents saw their tenants experiencing rental rises during January. However, this is less than the 30% seen in January 2016.

Demand for rental property surges in January

Demand for rental property surges in January

David Cox, Chief Executive of ARLA Propertymark, said: ‘As expected, the New Year brought with it a flurry of activity in the rental market. While supply of rental stock rose slightly, the number of prospective tenants increased by a much bigger margin. When supply and demand are out of kilter, as they have been for so long now, the market isn’t balanced and fair for tenants and rent prices will just continue to rise.’[1]

‘Worse still, should the Government decide to implement an out-right ban on letting agent fees when the consultation takes place, the situation will likely get worse for tenants. The costs of the vital services letting agent fees cover will need to be recouped, and this will get passed on to renters in inflated rental prices. This, combined with new landlords’ tax, particularly the upcoming changes to mortgage interest release, means the rental market is far from reaching equilibrium,’ Mr Cox added.[1]

[1] http://www.propertyreporter.co.uk/landlords/demand-for-rental-accommodation-sees-january-spike.html

 

ARLA issues warning over HMO licensing proposals

Published On: December 19, 2016 at 11:09 am

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The Association of Residential Letting Agents (ARLA) has issued a warning to the Government over its proposed changes to regulations governing licensing of HMOs.

ARLA says that any alterations could bring with them unintended consequences. Its warning comes in response to the Department for Communities and Local Government’s consultation on ‘Homes in Multiple Occupation and residential property licensing reforms.

Consultation

This consultation asked for views on proposals to remove the existing rule regarding storeys for HMOs. It proposes an extension to mandatory licensing for flats above and below business premises and setting a minimum room size of 6.52 sq metres.

An ARLA spokesman said: ‘We repeated our view that we don’t agree with licensing because it doesn’t work. Councils already have a wide variety of powers to prosecute for poor property conditions and bad management practices. Failure to tackle and inspect landlords without a licence is a major concern of our members and only serves to enforce our current view that licensing is not an effective solution to the correctly identified problem.’[1]

House and law. Object isolated over white

House and law. Object isolated over white

Consequences

Specifically, ARLA’s warning comes in response to the changes to room size.

‘We know that some people are happy to take small rooms to keep their costs down. If these rooms are no longer available, the supply of property to these people will be vastly reduced,’ the ARLA spokesperson continued.[1]

In addition, the association said it is very concerned that parents residing in bedsits or letting rooms with a small child or baby would contravene licensing rules under the new scheme.

‘We believe this will have an impact in areas where residential property is in high demand and force low income families to find individual flats which they may not be able to afford,’ the spokesman concluded.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/12/arla-warns-government-over-room-size-and-licensing-proposals

 

Proposed licensing scheme won’t work, claims ARLA

Published On: October 19, 2016 at 1:42 pm

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Categories: Landlord News

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Yesterday, the Government announced plans to introduce a mandatory licensing scheme for landlords of multi-let accommodation. This is in an attempt to clamp down on rogues and introduce standards in the sector.

However, the Association of Residential Letting Agents believes this scheme is destined for failure.

Rules

The new rules, to be introduced next year, were outlined in a consultation published yesterday by the Department for Communities and Local Government. They propose to apply these licensing rules to all shared properties in England with five or more people from two or more households. In addition, the rules will apply to flats attached to business premises.

According to housing and planning minister Gavin Barwell, the rules will make sure that, ‘everyone has somewhere safe and secure to live.’[1]

He continued by saying: ‘These measures will give councils the powers they need to tackle poor-quality rental homes in their area. By driving out rogue landlords that flout the rules out of business, we are raising standards and giving tenants the protection they need.’[1]

Landlords failing to comply with the licence could face potential fines or even a criminal prosecution.

Proposed licensing scheme won't work, claims ARLA

Proposed licensing scheme won’t work, claims ARLA

Lack of enforcement

However, David Cox, managing director of ARLA, said that, ‘landlord licensing doesn’t work.’

Continuing, Mr Cox said: ‘Councils already have a wide variety of powers to prosecute for poor property conditions and bad management practices; with penalties ranging from fines to seizure of property and even imprisonment. But Councils don’t have the resources to undertake effective enforcement action. Imposing more burdens on councils will not mean improved standards and better conditions for tenants; it will merely mean more laws that are not being enforced.’[1]

Responding to Mr Barwell’s comments that rules for minimum room sizes will also apply to shared properties, Cox said this could have, ‘unintended consequences.’

‘Some people are happy to take small rooms to keep their costs down. If these rooms are no longer available, where are people supposed to live? What’s more, if a small room in a property can no longer be let out, the costs of that room will be spread across the other tenants living in the property; pushing up their rents. A habitable room is essential but a one-size-fits-all policy doesn’t always work,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/10/tighter-licensing-requirements-for-hmos-wont-improve-standards-for-tenants–arla