Posts with tag: landlord law

Tenants to Save £192m a Year Thanks to Lettings Fee Ban

Published On: June 6, 2019 at 9:29 am

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Categories: Tenant Fees Ban,Tenant News

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Private tenants in England look set to save a total of £192m a year thanks to the recently-introduced lettings fee ban, which came into force on 1st June 2019.

A new study, undertaken by property app Bunk, has assessed the cost saving for tenants as a result of the Tenant Fees Act.

Bunk analysed the number of rental transactions within the private rental sector in England, along with the average tenant fee paid prior to the ban, to ascertain just how much the nation’s renters will be saving now that fees are prohibited.

According to the latest Government statistics on churn in the private rental sector, some 860,000 rental transactions are recorded per year.

Data from the English Housing Survey 2017/18 shows that the average tenant was charged £223 in fees alone.

Based on these statistics, a total sum of £191.8m will be saved per year thanks to the ban.

The Government believes that the Tenant Fees Act will make renting properties in England fairer and more affordable for renters, by reducing the costs they have to pay at the outset of a tenancy, at the same time as improving transparency and competition in the private rental sector.

Our Editor, Rose Jinks, spoke to Sky News Sunrise on the day the ban was introduced, to give her thoughts – take a look here. 

Landlords and letting agents in Wales will be banned from charging fees to tenants from 1st September 2019.

Tom Woollard, the Co-Founder and CEO of Bunk, comments: “For far too long, letting agents have essentially been writing their own rules when it comes to the fees they charge tenants for all manner of things, and, as a result, it has left a very sour taste in the mouths of many in the rental sector.

“The ban on tenant fees is undoubtedly a step in the right direction, as we now have a clear piece of legislation that letting agents, landlords and tenants can all adhere to, with a good level of accountability when this isn’t the case.” 

He continues: “Until this point, the majority of letting agents have essentially been taking extra money above and beyond any justified fees for no additional work, and so the thought that they might try and recoup this lost revenue through rental hikes or any other means is quite laughable. 

“Only time will tell if this does happen, and there will no doubt be a knee-jerk reaction of some sort by the industry. Hopefully, it will act as a catalyst for the sector to stand up and show it can provide a good service for a reasonable fee, and that letting agents still hold some value in a world where technology and innovation will undoubtedly render them obsolete.”

Our Editor Discusses Tenant Fees Act on Sky News

Published On: June 5, 2019 at 9:52 am

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Categories: Tenant Fees Ban

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Did anybody catch our Editor and Spokesperson of Just Landlords, Rose Jinks, on Sky News at the weekend? She was on the Sunrise show speaking to Stephen Dixon and Gillian Joseph about the Tenant Fees Act.

On Saturday 1st June 2019, the long-awaited Tenant Fees Act came into force across England. It has banned landlords and letting agents from charging upfront fees to tenants, as well as capping security deposits at five weeks’ rent and holding deposits at one week’s rent. 

Rose was invited to speak to the Sunrise team about the effects of the Act on the private rental sector. 

The Government has introduced the ban to save tenants money, as well as make the private rental sector a fairer, more transparent place to live. It could potentially save tenants hundreds of pounds, as they will no longer have to pay for tasks such as looking around a property, setting up a tenancy or check-out.

Landlords and letting agents caught charging the fees after 1st June will be fined up to £5,000 for a first offence, facing £30,000 fines or prosecution for another offence within five years.

Rose agreed that tenant fees could be unfair: “The average fee across the country is £400, but it can vary massively across the regions, so tenants can face extremely high costs when it comes to moving into a new property or moving within the private rental sector.”

Our Editor Discusses Tenant Fees Act on Sky News

So, why haven’t landlords controlled fees before this point?

Rose explained: “Often, it’s a letting agent that’s managing the property, so the letting agent has their own set of fees, they charge those to their tenants, they also charge their landlord customers, so it may be that the landlord who owns the property isn’t even aware of how much their tenant’s being charged, but, again, they do charge themselves, so now the Government’s stepping in and saying ‘we want to save tenants money, let’s put a ban on this’.”

With that in mind, it seems that the ban will naturally save tenants money. However, Rose is worried that the Act may not result in this.

“We’ve seen a lot of concern in the industry that it may not positively affect the tenants in the long-term, because the landlords may put the rent prices up instead, or they may leave the sector, which would reduce housing stock for tenants,” she claimed. “So I believe it’s a positive move by the Government to try and save the tenants money, but what we’re hearing is concern that that may not be effective in the long-term.”

However, Dixon argued that perhaps small increases in the monthly rent would be more manageable for renters.

Rose agreed: “Tenants can often face difficulties with moving house, and the private rental sector is designed to be flexible; you can move freely within it, but sometimes they’re facing barriers with extremely high costs that mean they can’t move house, because they have to pay all of these fees for these admin tasks, so hopefully now, yes, they will be able to move more fluidly.”

So, could this be beneficial to landlords as well?

“We always say to landlords that, if you get a good tenant in your property who looks after it, treats it like a home, pays their rent on time, that’s beneficial to you, you should be supporting your tenants to actually be comfortable in their own homes,” she added.

Replacement Repossession System must Instil Landlord Confidence

Published On: June 4, 2019 at 9:06 am

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Groups within the private rental sector (PRS) are warning that Section 21 repossessions should be kept as an option unless and until a new system is in place.

Such a system should provide landlords with the same level of confidence about repossessing properties in legitimate circumstances.

These groups have spoken out on behalf of landlords and letting agents, forming a ‘Fair Possessions Coalition’. They have united to spread the warning that plans to abolish Section 21 repossessions without a replacement would undermine investment in the sector at a time when private landlords are needed to provide homes to one in five households in England.

A statement from the Coalition has noted that whilst landlords much prefer to let to good tenants on a long-term basis, they also need to feel certain that in circumstances such as rent arrears or anti-social behaviour, they will be able to easily and swiftly regain possession of their properties. 

The Section 8 process will still be in place, but it is argued that it is not fit for purpose. Currently, landlords can repossess properties based on a number of grounds using this process, but it does not provide the level of certainty offered by Section 21. The current judicial process for dealing with possession cases is not only confusing for tenants but can take on average over five months from a landlord applying to the courts to the repossession actually taking place.

The Coalition believes that, instead of tinkering with the system, a comprehensive overhaul of the regulations and processes enabling landlords to gain repossession of their properties should take place. Clear grounds for repossession that cannot be exploited by criminal landlords or unreliable tenants are needed.

A new dedicated and fully funded housing court should be established as part of the reform. The Coalition believes that it should make better use of mediation, taking into account models in use abroad. Meetings should be held in local venues, such as schools and community centres, in order to make the process less intimidating and easier for landlords and tenants to obtain the swift and accessible justice they need if the relationship is to work effectively.

Finally, the Coalition argues that such reforms must be part of a wider package of measures, including welfare reforms, to provide better support for vulnerable tenants and smart taxation to encourage the development of new homes for private rent.

The Fair Possessions Coalition is made up of:

  • ARLA Propertymark;
  • Cornwall Residential Landlords Association;
  • Country Land and Business Association; 
  • East Midlands Property Owners; 
  • Eastern Landlords Association; 
  • Guild of Residential Landlords; 
  • Humber Landlords Association; 
  • iHowz; 
  • Landlord Action; 
  • Leeds Property Association; 
  • National Landlords Alliance; 
  • National Landlords Association; 
  • North West Landlords Association; 
  • Portsmouth and District Private Landlords’ Association; 
  • Residential Landlords Association; 
  • Safe Agent; 
  • South West Landlords Association; and 
  • Theresa Wallace (Chair, The Lettings Industry Council)

Letting Agents Breaking Existing Laws on Tenant Fees

Published On: May 29, 2019 at 9:55 am

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Categories: Lettings News,Tenant Fees Ban

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Tenant lobby group Generation Rent has found 21 letting agents around the country that are breaking existing laws on tenant fees.

The campaigners found that many letting agents are currently flouting the Consumer Rights Act, four years after it came into force, which raises concerns about the effectiveness of the upcoming tenant fees ban.

The Consumer Rights Act requires letting agents to display the fees that they charge in their branches and on their websites. The penalty for failing to comply is £5,000. 

In 2017, Generation Rent research of 1,088 agents found that 131 were failing to display their fees.

With the Tenant Fees Act coming into effect on 1st June 2019, Generation Rent has been assessing how well letting agents comply with existing laws, inviting supporters to report unlawful behaviour on its Report an Agent page.

A group of Generation Rent volunteers, nicknaming themselves the Letting Fees Detectives, have been mystery shoppers online, checking agents’ websites and making phone calls. The research has revealed 21 agents that are still misleading tenants by failing to publish their fees.

The Report an Agent page has received reports of agent attempts to avoid the tenant fees ban, including:

  • Pressuring new tenants to sign up to expensive no-deposit schemes
  • Asking existing tenants to renew their contracts before 1st June, allowing the agent to lock in renewal and check-out fees for the next year
  • One agent told a tenant that the fee ban is “like Brexit” – it is being delayed and probably won’t happen

The Tenant Fees Act received royal assent in February and will come into force on 1st June in England.

Georgie Laming, a Campaigner at Generation Rent, says: “The scale of malpractice from the lettings industry is shocking. Failing to display fees is in breach of the Consumer Rights Act 2015, and it’s ripping off tenants who can’t make an informed choice. Whilst the Tenant Fees Act is a brilliant victory for renters, it is clear that we need better enforcement of the law if it is to work properly.

“That’s why Generation Rent supporters have started a Letting Agent Detective team. These are ordinary renters, taking matters into their own hands by mystery shopping letting agents across England to expose them. We’ve found letting agents across the country disregarding the law or deliberately misleading tenants.”

They add: “Probably one of the most shocking examples was a letting agent who told a tenant that the letting fees ban was ‘like Brexit’in that it was constantly being delayed and probably wouldn’t happen, so she should sign a contract now.”

Only the Best Letting Agents will be Valued by Landlords Post-Fees Ban

Published On: May 29, 2019 at 8:54 am

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Categories: Lettings News,Tenant Fees Ban

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Letting Agents could Benefit from Build to Rent

Following the introduction of the Tenant Fees Act next month, landlords and tenants will increasingly focus on the level of service provided by the country’s best letting agents, believes Tenant Shop.

The utility management service says that, due to the financial pressures that the ban on fees will put on letting agents, only the best equipped will succeed, as we move through the second half of 2019 and into 2020.

In a post-fees market, letting agents that take a traditional approach, with a focus on high levels of customer service, will be of huge value to landlords, Tenant Shop claims.

With tenants no longer paying upfront fees from 1st June 2019, it will be essential that agents help landlords to properly vet prospective tenants and ensure that all aspects of the move-in/move-out process – including notifying local councils and utility companies about tenancy changeovers, and dealing with stray bills – are handled professionally and efficiently.

Glenn Seddington, the Managing Director of Tenant Shop, says: “The introduction of the Tenant Fees Act is the most significant change to the private rental sector in recent years, and landlords will need full service traditional letting agents they can rely on.

“Having the right tenant referencing, contractual and deposit systems in place will become even more important, as will remaining compliant with the new legislation.”

He continues: “Letting agents can also prove their worth to consumers by providing a comprehensive, knowledgeable and personal service at a time of huge industry change, when people will need reassurance and expert advice.”

As many landlords consider their options following management fee increases brought about by the fees ban, agents can make their offerings stand out, by clearly showing the range of expert services that they provide for their fees.

“It’s this kind of approach with an emphasis on full service and demonstrating the value for money available to landlords, which will see the very best traditional agents take centre stage once the fees ban becomes law,” Seddington explains.

He adds that while, in some cases, management fee increases may be justified, agents don’t necessarily need to hike their fees to remain profitable from June onwards.

“It’s about finding a balance between charging a fair fee for what you offer, while remaining transparent and cost-effective,” Seddington says. “Many agents have also been looking to build additional revenue streams to replace lost fee income.”

He concludes: “Working with the best suppliers can help agents to earn referral fees and, subsequently, keep clients’ costs down. Meanwhile, providing access to leading utilities services, such as Virgin, Sky and Scottish Power, can also help to keep tenants happy, encourage them to stay for longer and, therefore, reduce void periods for landlords.”

Half of Landlords and Agents More Likely to Leave Sector under Government Plans

Published On: May 23, 2019 at 8:00 am

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Categories: Lettings News

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Almost half (46%) of landlords and letting agents are more likely to remove some or all of their investments in the private rental sector as a result of the Government’s plans to abolish Section 21 notices.

The findings come from a new survey by the Residential Landlords Association (RLA) of around 6,500 landlords and letting agents – its greatest ever response. 

The study also found that more than 40% of landlords are waiting for other planned changes by the Government to become clearer, before they make decisions on their ability to provide homes to rent.

These figures arrive just weeks after the Royal Institution of Chartered Surveyors (RICS) warned of private rent prices increasing by an average of 3% per year over the next five years, as a result of landlords being less prepared to let properties, while demand from prospective tenants rises.

In April, the Government announced plans to end Section 21 evictions, alongside proposals on improving the Section 8 process, under which landlords can repossess their properties on grounds such as rent arrears or anti-social behaviour. This procedure requires landlords to apply and be granted permission to repossess via the courts, yet official data shows that it takes over five months on average from application to repossession.

Half of Landlords and Agents More Likely to Leave Sector under Government Plans

According to the RLA’s survey, of those landlords with experience of such repossessions, 79% did not consider the courts to be reliable. Almost 91% of landlords supported the establishment of a specific housing court, bringing together all housing disputes under a single body.

With concerns that landlords selling property will usually require tenants to be evicted, the RLA’s research revealed that 48% of respondents would be encouraged to purchase a rental property with a tenant in situ, if they could reclaim the 3% Stamp Duty surcharge on additional homes, on the condition that the tenants can remain in the property for a year or more.

The survey also found widespread support for new grounds to be established upon which landlords could regain possession of a property. This included, to sell a property and to ensure that tenancies can best meet the needs of certain groups, such as students, who do not require the indefinite style tenancies being proposed by the Government.

David Smith, the Policy Director of the RLA, says: “Security of tenure means nothing unless the homes to rent are there in the first place. With the demand for private rented housing showing no signs of slowing down, it is vital that landlords are confident that they can quickly and easily get back their property in legitimate circumstances.  

“Whilst the system should clearly be fair to tenants, it needs also to support and encourage good landlords. Our survey shows how complex it will be to ensure that the grounds on which landlords can repossess properties are both clear and comprehensive. This needs to be underpinned by a court system that is fit for purpose and properly resourced. At present it is neither.”

He adds: “It is vital that the Government’s planned reforms are carefully considered, to avoid finding ourselves needing to reopen this whole issue later down the line.”