Posts with tag: rental market

Government facing legal action over Right-to-Rent

Published On: May 17, 2017 at 8:54 am

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The Government is now facing a legal challenge over the controversial Right-to-Rent scheme, which permits buy-to-let landlords to check the immigration status of would-be tenants.

Introduced in February 2016 across England, while Prime Minister Theresa May was Home Secretary, the scheme has seen landlords forced to check legal documents of possible renters before allowing them to rent their property. This is to ensure their tenants are legally allowed to rent in the UK.

Struggles

However, these checks have less foreign nationals (and Britons) without a passport struggling to rent, according to a new survey.

This report by the Joint Council for the Welfare of Immigrants (JCWI) claims that many would-be renters from ethnic minorities are being discriminated against in the rental market. This, the investigation claims, is a direct result of the Right-to-Rent scheme, designed to clamp down on regular immigration.

Government facing legal action over Right-to-Rent

Government facing legal action over Right-to-Rent

51% of landlords questioned said that the scheme would make them less likely to think about letting to foreign nationals. 42% of landlords stated they were less likely to rent to someone without a UK passport.

Mystery Shopping

A real cause for concern was highlighted through an enquiry from a British Black Minority Ethnic tenant without a passport. This tenant was turned down by 58% of landlords during a mystery shopping exercise, following the introduction of the Right-to-Rent scheme.

Existing legislation states that landlords who fail to check a potential tenant’s immigration status will face fines of up to £3,000 per tenant, with a maximum five years behind bars.

Yesterday, the JCWI wrote to the Home Office in order to call for a stop to the rollout of the scheme and for a reassessment of its effects.

Saira Grant, chief executive of the JCWI, stated: ‘In the face of clear evidence of discrimination under Right to Rent, the government must show it is not acting illegally before it presses ahead with a rollout to the rest of the UK.’[1]

‘This is a scheme that not only discriminates against BME Britons, foreign nationals and British nationals without passports- it imposes costs on landlords, agents and tenants too. In the absence of any clear plan to monitor its effects the Government must carry out a thorough review-until then, any extension to other parts of the UK would be premature, dangerous and potentially illegal,’ he added.[1]

 

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/government-threatened-with-legal-challenge-over-landlord-immigration-checks

 

Buy-to-let expert calls for sector reforms

Published On: May 10, 2017 at 9:20 am

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A leading buy-to-let property expert has called for better enforcement and streamlining of legislation within the private rental sector.

Kate Faulkner wants to see the abolishment of what she calls a ‘two-tier’ rental market, where thousands of renters are forced to settle for, ‘sub-standard, illegal or even dangerous homes.’

Reforms

Faulkner, founder of PropertyChecklists.co.uk, is urging major reforms in the sector, in a report commissioned by the TDS Charitable Foundation.

In this report, Faulkner argues that there are a number of rules and regulations in the sector that are serving only to create confusion among landlords, agents, tenants and enforcement bodies alike.

It is suggested that a typical private landlord in England now has to comply with around 150 rules and regulations. This figure increases should the landlord wish to rent out their property to someone on benefits.

‘There are 4.4 million rental properties in England alone so reforming the market would help millions of people. Legislation should be streamlined and funding should be put in place to support enforcement,’[1] Faulkner noted.

‘Legislation varies dramatically across the UK, with different rules for England, Scotland, Wales and Northern Ireland. Landlords are typically over 55, and employed full-time, so often struggle to keep up with what constantly changing legislation they need to be aware of, and what bodies are responsible for enforcing them. Trading Standards, the Home Office, the Competition and Markets Authority, and local councils all enforce elements of private rental policy, and there is no single point of guidance for landlords and agencies to make sense of where jurisdictions begin and end,’ she continued.[1]

Buy-to-let expert calls for sector reforms

Buy-to-let expert calls for sector reforms

Geographical Disparities

In addition, Faulkner highlights the fact that there are substantial geographical differences from county to county.

London sees a massive difference in the number of rogue landlord prosecutions. The most recent figures indicate that Newham prosecuted 359 rogues, whereas Lambeth and Hammersmith had only 9 each.

However, Faulkner claims that local councils are not always to blame:

‘The issue needs to be tackled on a national level to ensure uniformity in enforcing laws designed to protect both tenants and landlords. Law-abiding agents and landlords are jumping through not inconsiderable hoops, and forking out to meet regulations, while the cowboys know enforcement is lax, and are cutting corners and costs.’[1]

Concluding, Faulkner said: ‘We need a coordinated national strategy on weeding out unenforceable, unclear, and confusing rules, and creating national standards, and enforcement policy. Whoever forms the next government must commit to backing an education campaign for those letting out property to inform them of the law, and how to raise complaints or issues.’[1]

‘By tightening up on implementing legislation, tenants will know what to expect, and how to bring rogue landlords to heel. By tackling the causes of the current two-tiered rental market, the quality of the UK’s rental stock will increase, providing better homes for tenants, and better standards for landlords and agents.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/reform-the-private-rented-sector-so-that-it-is-fit-for-purpose-says-expert

 

Labour propose minimum standards for sector

Published On: May 2, 2017 at 8:44 am

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The General Election campaigns are beginning to gather pace, ahead of the big vote on the 8th June.

Labour has now moved to pledge a ‘consumer rights revolution’ that will introduce legal minimum standards for all rental homes.

Proposals

These proposals, which will be introduced should Labour win the election, include a raft of new standards that would see electrical safety, sanitation and cooking facilities. This is to ensure that homes are, ‘fit for human habitation’ according to shadow housing secretary John Healey.

Landlords who fail to meet this tougher standards could face fines of up to £100,000.

Healey feels that these new measures will allow tenants to, ‘call time on bad landlords.’

In response, the Conservatives said that these standards added up to a tenants tax, that will only serve to push up rents. This has been met with scorn from Labour, given the fact that the Tories have introduced increased Stamp Duty surcharges and phased out mortgage interest tax relief.

Labour propose minimum standards for sector

Labour propose minimum standards for sector

Renter’s Rights

Mr Healey commented: ‘Our homes are at the centre of our lives, but at the moment renters too often don’t have basic consumer rights that we take for granted in other areas. In practice, you have fewer rights renting a family home than you do buying a fridge-freezer. As a result, too many are forced to put up with unacceptable, unfit and downright dangerous housing.’[1]

‘Most landlords provide decent homes that tenants are happy with, but these rogue landlords are ripping off both renters and the taxpayer by making billions from rent and housing benefit letting out sub-standard homes. After seven years of failure the Conservatives have no plan to fix the housing crisis,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/labour-unveil-plans-to-call-time-on-bad-landlords

 

40% of renters feel the marketplace is ‘ruthless and unethical’

Published On: April 26, 2017 at 9:07 am

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A new survey over 2,000 UK adults by online estate agent LetBritain has uncovered the sentiments of those in Britain’s rental market.

According to the data, 40% of UK renters, or 7.21m people, called the marketplace, ‘ruthless and unethical,’ citing unscrupulous letting agents and gazumping as their main irks.

Demand

37% said that the present rental system is unfit for purpose as it cannot meet demand and cannot adapt to the changing speeds in the market. Another 37% said that they have been misled by an estate agent with regards to the competition that they faced from rival renters.

In addition, 38% of UK renters said that they were knowingly advertised properties that were never available, while 31% feel they lost out as their estate agent preferred another tenant.

40% of renters feel the marketplace is 'ruthless and unethical'

40% of renters feel the marketplace is ‘ruthless and unethical’

Given that there are 4.3m rented households across Britain, a large number of tenants are seemingly disillusioned by the process of securing a property through a high street agent.

Fareed Nabir, founder and CEO of LetBritain, noted: ‘Today’s research delivers some revealing insights into the opinions of generation rent. It is obvious that renters up and down the country feel let down by their estate agent – from luring them in with properties that aren’t available to misleading potential tenants about the competition they face, the country’s rental population is suffering at the hands of questionable practices. Clearly a faster, fairer and more transparent system is required to alleviate the time and stress involved in securing a rental property.’[1]

[1] http://www.propertyreporter.co.uk/landlords/uk-renter-sentiment-revealed-in-new-survey.html

 

 

Will ban on agents’ fees be scrapped due to the election?

Published On: April 25, 2017 at 9:05 am

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The Residential Landlords Association has moved to suggest that the upcoming General Election on June 8th could see the proposed ban on letting agents’ fees being shelved.

It is predicted that the Government could be left with new priorities on the back of the election result, which could see the ban abandoned.

Consultation

Just last week, the Department of Communities and Local Government abandoned the workshops with letting agents-which were previously at the heart of the formal consultation process.

Despite the consultation itself continuing, the abandonment of the workshop has prompted questions in the industry.

Policy Director of the Residential Landlords Association, David Smith, wrote on the organisation’s website: ‘There is now a possibility that the entire policy will be lost if a new Housing Minister has other things which capture his attention more strongly.’[1]

Will ban on agents' fees be scrapped due to the election?

Will ban on agents’ fees be scrapped due to the election?

Delayed

Mr Smith’s warning comes alongside a warning highlighting other issues which could be delayed or scrapped depending on the election result.

One of these is the Homelessness Reduction Bill, which has been passed by Parliament but has yet not received Royal Assent required to become law. What’s more, there are regulations that need to be put in place to set up a database of rogue landlords and banning orders.

Smith said: ‘Regulations were expected shortly to start the process of making this happen and the IT project that underpins the database was also in progress. Again these are now trapped without a Minister to push them forward for the next month…The October deadline must now be in doubt.’[1]

In addition, the Housing and Planning Act included provisions about Client Money Protection becoming mandatory for letting agents.

Concluding, Smith noted: ‘There were no further consultations expected in these areas but there were working group reports which needed approving and regulations were again to be drafted to implement the reforms. Yet again this will be at risk of delay.[1]

 

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/4/fees-ban-whole-policy-may-be-lost-thanks-to-election-warns-trade-body

 

It’s a Tenant’s Market in the Home Counties, Reports Knight Frank

Published On: April 21, 2017 at 9:39 am

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With significantly more rental properties to choose from, it’s a tenant’s market in the Home Counties, as reflected by a drop in rent prices so far this year, reports Knight Frank.

It's a Tenant's Market in the Home Counties, Reports Knight Frank

It’s a Tenant’s Market in the Home Counties, Reports Knight Frank

Despite a 23% annual rise in the volume of new tenancies agreed in the first three months of the year, prime rental values dropped by 2.3% across the Home Counties, following a 1.8% decline in the previous quarter.

The estate agent was instructed to let 33% more properties in the first quarter (Q1) of 2017 compared with the previous year, while the number of market appraisals – a good indicator of future stock levels – rose by 39% year-on-year, placing downward pressure on rent prices in the Home Counties.

The volume of new prospective tenants increased by 15% over the year, with demand highest in the sub-£2,000 per month price bracket.

Around 60% of new tenants in Q1 were from the UK, followed by those from North America, the data shows.

Corporate enquiries from individuals relocating to the Home Counties for work were fairly robust over the quarter, up by 17% on the same period last year. Indications suggest that interest from corporate tenants will rise further over the summer months, ahead of the start of new school terms.

A Partner at Knight Frank’s Home Counties lettings team, Jemma Scott, says: “The figures very much reflect the feedback that we have been getting and the general sentiment within the market.

“After a challenging summer last year, we saw a surge in rental deal volumes at the beginning of 2017, which, coupled with the heightened level of enquiries from prospective tenants, means we head into the traditionally busy spring and summer market with great optimism.”

Do you let properties in the Home Counties? If so, have you seen conditions shift towards being a tenant’s market?