Posts with tag: tenants

Islington Council aims to close council tax loophole

Published On: September 14, 2017 at 9:47 am

Tags: Council Tax,islington council,student tenants,tenants

A local authority in north London is trying to close a loophole concerning private rental property and council tax.

Islington Council is looking to stop landlords letting out student flats over summer holidays-when most students are away- to tourists and other visitors, in order to maximise income.

Students

There are over 4,000 student flats in purpose built accommodation blocks in Islington. In the past, this type of accommodation was given a full council tax exemption throughout the year, given the fact that students are not permitted to pay council tax.

However, Islington Council claims that more landlords are letting these students flats over the summer period.

As students are not living in the flats during this time, the flats are therefore liable for council tax. As an example, it states that if 1,000 of such flats are rented out for a 10-week period, council tax due amounts to £121,250.

In order to close this loophole, Islington council now requires landlords to provide tenancy and student occupancy details for every flat, in every week of the year.

Islington Council aims to close council tax loophole

Loophole

Islington is one of the first local authorities in the country to try and take action to close the loophole.

A council spokesman said: ‘At a time when Islington faces ongoing cuts to its budgets from central government, it isn’t fair that landlords have effectively been getting a tax break on renting their flats out over the summer. Closing this loophole means that the correct levels of council tax are collected, which is fairer for all our residents and helps to pay for local services in Islington and London.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/9/council-demands-info-on-tenants-for-every-week-of-the-year

Agents warned to streamline their processes ahead of fee ban

Published On: September 13, 2017 at 9:19 am

Author: Em Morley

Categories: Property News

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

A new warning from automated rental payment provider PayProp states that letting agents must be fully prepared for the upcoming ban on upfront fees charged to tenants.

The firm suggests that the way to do this is by streamlining their processes.

Ban on Fees

A ban on letting agent fees charged on tenants is widely expected to be implemented throughout England at some point in 2018. A debate on the ban took place in Westminster just last week.

In Wales, there is a similar consultation ongoing. Fees have been banned in Scotland since 2012.

It is feared that the majority of letting agents will lose a significant proportion of revenue when any such ban is introduced. As part of its consultation, the Welsh Government reports that fees charged to tenants make up around 19% of an agent’s income.

A separate study undertaken by software provider Eurolink calculated that the ban could cost a single office agency £85,000. For a multi-branch network, this could rise to £850,000.

Agents warned to streamline their processes ahead of fee ban

Neil Cobbold, Chief Operating Officer of PayProp in the UK, noted: ‘It’s clear that we could soon reach a point when upfront letting agent fees charged to tenants are banned in all corners of the UK.’

‘That’s why it’s important that agents begin to plan now for how they are going to replace lost revenue – whether through alternative revenue streams, optimisation of business processes for better efficiencies, or through low-overhead growth.’[1]

Concluding, Mr Cobbold said: ‘The ban on letting agent fees is all about a changing market and effective adaptation. The agents who plan their strategy now are likely to be most successful when a ban is finally introduced.’[1]

[1] http://www.propertyreporter.co.uk/landlords/agents-must-streamline-their-processes-in-wake-of-fee-ban.html

Rogue landlord fined heavily for allowing tenants to live in ‘atrocious conditions’

Published On: September 7, 2017 at 1:24 pm

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,property,rogue landlord,tenants

A rogue landlord who rented out flats which were in breach of council planning laws and did not meet humane living standards has been ordered to pay almost £339,000 in fines.

Mr Nihal Seneviratne, of West Hampstead, and his company, NSV Management Ltd, were convicted for illegally turning a former hotel in Harlesden into 26 squalid studio flats six years ago.

Fine

Mr Seneviratne was given the huge fine after his case was brought to Harrow Crown Court by Brent Council on Tuesday. Harrow Crown Court issued a £300,650 confiscation order to Seneviratne’s company under the Proceeds of Crime Act. In addition, he was told to pay £20,000 in fines, alongside £18, 268 in costs.

During March 2012, the rogue landlord ignored a planning enforcement notice issued to him by Brent Council. Thereafter, he went on to con over 100 vulnerable tenants out of thousands of pounds.

The minimum size requirement for a studio flat in London is 37sqm. Mr Seneviratne charged rents for poorly insulated properties measuring between 9sqm and 20sqm.

There were also issues with the maintenance of the property, alongside the fact that tenants were living in insanitary conditions.

Rogue landlord fined heavily for allowing tenants to live in ‘atrocious conditions’

Atrocious

Councillor Harbi Farah, cabinet member for housing and welfare reform, said: ‘Mr Seneviratne’s illegal behaviour resulted in many tenants enduring atrocious conditions, which were making their lives a misery.’

‘The outcome of this long case is a victory against slum landlords who exploit vulnerable residents for a profit. Brent Council will make sure that rogue landlords will not benefit in any way from their crimes.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/9/rogue-landlord-fined-339k-for-allowing-tenants-to-live-in-atrocious-conditions

Most Affordable London Boroughs for Graduate Tenants Revealed

Published On: September 7, 2017 at 9:36 am

Author: Em Morley

Categories: Property News

Tags: graduates,London,rent prices,tenants

Cash-strapped graduate tenants renting in London are spending more than 45% of their take-home pay every month on rent payments, according to the latest Landbay Rental Index, powered by MIAC.

Most Affordable London Boroughs for Graduate Tenants Revealed

As thousands of graduate tenants across the country flock to the capital to begin their first jobs this month, many will be seeking the most affordable rents possible.

Despite London’s infamously high rents, the capital is home to a quarter of all new graduates who move within six months of finishing their degrees.

Those hoping to rent alone in London face spending 73% of the average post-tax monthly income of £1,972 on £1,445 of rent. In a shared house of two graduate tenants, overall rent of £1,917 per month would eat into 49% of each tenant’s income, while those living in a three-bedroom property would each spend 45% of their monthly take-home pay on rent of £2,683.

Of all London boroughs, the most affordable average rents are found in Bexley (£1,004), Sutton (£1,506), Havering (£1,072), Croydon (£1,125) and Bromley (£1,169).

Bexley has recorded the strongest rental growth of all boroughs, with an average 1.98% rise in rents over the past year; growing demand for properties in outer London has clearly already affected these regions.

For those seeking greater proximity to the City of London, Lewisham is the most viable option. An average rent price of £1,232 per month makes it the eighth most affordable London borough, while its 15-minute train journey to the City makes it attractive to graduate tenants.

At the other end of the spectrum, the most expensive average rents are unsurprisingly found in more desirable boroughs. Kensington and Chelsea (£3,042), the City of Westminster (£2,891), Camden (£2,219), the City of London (£2,074), and Hammersmith & Fulham (£1,886) are the most expensive areas to rent, with prices being well out of reach for those on a starting salary.

It’s telling that all five locations have seen rents drop over the past year, by an average of 2.36%, 2.38%, 1.13%, 2.35% and 1.67% respectively, as prime locations have suffered a fall in demand in both the sale and rental markets.

The CEO and Founder of Landbay, John Goodall, says: “Faced with record high student debt levels and the rising cost of living, it will be little surprise to see graduates starting to look elsewhere from the traditional young professional hotspots, such as Fulham and Camden, when they come to London. Surrounding areas are clearly worth the longer commute to reduce the rent burden and give them any hope of saving for a deposit on a house of their own one day.

“There are, of course, a number of factors at play, but, as returns fall in the more central locations, landlords may look to the outer boroughs to seek more attractive yields.”

Any landlords considering letting to graduate tenants in London should consider the top locations highlighted from Landbay above, in order to achieve strong rental growth and high demand.

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.”

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