Posts with tag: tenants

Our Editor Discusses Tenant Fees Act on Sky News

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

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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.

Poor Internet Connection Leaves Tenants Paying for Mobile Data Fees

Published On: June 3, 2019 at 7:57 am

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Poor internet connection in residential developments is leaving many tenants paying over the odds for mobile data fees, new research reveals.

WiredScore has launched a new report with the HomeOwners Alliance, which exposes how tenants, as well as homeowners, across the UK are paying in the region of £2.2 billion annually on unnecessary mobile data fees, to supplement their poor internet connection at home.

Some 85% of tenants and homeowners in the UK still face poor internet connection and failing services, forcing them to use an additional 2.5GB of extra mobile data each month, to compensate for issues with Wi-Fi.

Dave Butler, the Chief Executive of the UK Apartment Association, says: “High quality digital connectivity is a critical requirement of the modern-day renter. As this report highlights, they are too often let down.

“Build to rent landlords, in particular, have been setting out to fix this problem, and provide a better service and superior experience.”

The report, Poor Foundations: the state of UK residential connectivity, claims that many property developers are now taking advantage of the poor state of residential connectivity, with two-thirds reporting that they can let their well-connected properties at a higher price and possibly with a greater yield.

Two-fifths (40%) of developers have seen an increase in demand for their properties, while more than half (56%) state that they can let their properties for longer, due to the improved in-home experience.

This has lead to clear investments in full-fibre connections in new projects, with three-quarters of developers reporting at least some current projects will have fibre to the premises, which will boost the 6% of full-fibre homes in the UK.

William Newton, the President and EMEA MD at WiredScore, believes: “Connectivity is critical to almost every aspect of our lives – social, leisure and working – with most adult internet users typically spending 24 hours online each week – almost double the time spent in 2007.

“The residential development community has long shouldered the important responsibility of maintaining and improving residential digital infrastructure, in line with a rapid growth in consumer demand.”

He continues: “Our research shows their renewed commitment to supporting 5G and full-fibre connections, but it’s important that the right investments are made to assure an improved in-home experience. In addition, it’s also crucial that the residential market understands how to design and retrofit future-proofed properties, as well as communicate the investment to prospective homeowners or renters.”

Landlords, make sure you understand how important a good internet connection is for your tenants – it could benefit you in the long-term! 

Number of Disputes Handled by the Property Redress Scheme Surges

Published On: May 30, 2019 at 8:09 am

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The number of disputes handled by the Property Redress Scheme last year surged significantly year-on-year, according to the consumer redress ombudsman’s latest annual report, covering 2018.

The report shows that there was a 103% increase in final decisions in 2018 and an 82% rise in proposed decisions issued by the Property Redress Scheme, compared with figures from 2017.

The total amount of compensation awarded to consumers by the Property Redress Scheme in 2018 was almost £300,000, with an average award of £1,102.83.

Membership of the organisation has continued to grow at a rapid rate, with a further 37% increase in members in 2018. The current membership of the Property Redress Scheme is now close to 11,000 letting agent offices.

The report details not only an overall rise in complaints, but increases in different types of complaints, too. In 2018, the following issues recorded more complaints than in the previous year: fees and charges; general communication; poor service and complaint handling; and rent collection.

Sean Hooker, the Head of Redress at the Property Redress Scheme, comments: “2018 was a fundamental year for the Property Redress Scheme, and this was mirrored in the wider sector, as further developments in the Government’s project to reform the housing market started to take shape.”

It will be interesting to see how complaints within the private rental sector change following the upcoming tenant fees ban, which will prohibit landlords and letting agents from charging upfront fees to tenants. 

The Government’s plans are designed to make renting cheaper and more secure for tenants. However, concerns have been raised over whether the changes will be successful – will rent prices increase as a result, thus pushing housing costs up for tenants? 

The effectiveness of the ban will also rely on landlords and agents complying with the law – read up on your responsibilities here: https://www.landlordnews.co.uk/category/tenant-fees-ban/

All Parties must do their Research on Deposit Replacement Schemes, Proptech Provider Urges

Published On: May 28, 2019 at 9:40 am

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As alternatives to the traditional deposit protection schemes continue to gain popularity, it’s important for landlords, letting agents and tenants to fully understand how these systems work, before committing to using them, PayProp insists.

Deposit replacement schemes, sometimes referred to as zero deposit schemes, require tenants to pay a non-refundable fee of around one week’s rent, instead of the more traditional upfront, refundable security deposit (which will be capped at five weeks’ rent under the Tenant Fees Act).

The tenant’s fee is used as an insurance guarantee, which landlords can claim compensation for in the event the tenant is responsible for damage to the property. After compensating the landlord, the deposit replacement scheme will then recover the costs from the tenant directly.

Recent research from Your Move suggests that tenants are increasingly interested in alternatives to traditional upfront deposits.

Some 50% of almost 4,000 adults surveyed said that they were interested in alternative or insurance-backed schemes, while 70% said that having the choice to pay an upfront deposit scheme would influence their decision on whether to rent a specific property.

Over half of those taking part in the study were aged between 25-44-years-old with children at home, or private tenants aged 45+.

All Parties must do their Research on Deposit Replacement Schemes, Proptech Provider Urges

Neil Cobbold, the Chief Operating Officer of PayProp, says: “It’s clear that tenants’ awareness of deposit alternatives is growing, and many are interested in how the system could work for them and they could soon become a key piece of criteria for some movers.

“This means now is a good time for letting agents and landlords to carefully consider the options available to them, including the range of different providers and product variations now on the market.”

With more providers offering deposit alternatives and an increasing number of letting agents promoting these products to consumers, it’s important that agents who haven’t yet entered the market get to grips with what they’d be offering landlords and tenants, and how the system works.

Cobbold explains: “Some of the key things agents need to look out for is the product’s level of cover and who the insurance policy is underwritten by.

“It’s also vital to consider how deposit alternatives fit into the tenancy process and how the system will work at the end of a tenancy if the landlord wants to charge the tenant for damage or missing items.”

Providing more choice is a necessary step in catering to a growing, increasingly diverse population of private tenants.

“Upfront deposits may not be as much of an obstacle for the higher number of older tenants and family renters living in the private rental sector, who may also prefer to put aside a larger sum of money for the duration of their tenancy, which they can get back at a later date,” says Cobbold. “That said, for those who find sourcing funds for a traditional deposit a moving deterrent, alternative products are a welcome addition to the marketplace.”

He continues: “It’s also very important for tenants to do their research and think about what is best for their circumstances.

“A small upfront fee and subsequent insurance policy may seem more appealing, but it might not always be the best option in the long-term.”

Cobbold concludes: “Whether you’re an agent, landlord or tenant, it’s essential to do your research to make sure your aware of the benefits and drawbacks to deposit alternatives. The new choices available can only be a good thing if everyone involved fully understands what they are agreeing to.”

Increasing Numbers of Deposit Disputes Resolved Without Adjudication

Published On: May 22, 2019 at 9:00 am

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Increasing numbers of tenancy deposit disputes are being resolved through mediation, rather than the adjudication process, according to figures from the Tenancy Deposit Scheme (TDS).

The research found that the number of deposit disputes between landlords and tenants that are resolved before going to adjudication has risen by 31% in England and Wales, 18% in Scotland and 56% in Northern Ireland over the past 12 months.

The TDS, which offers an early resolution process to help landlords and tenants reach an amicable settlement through its deposit protection schemes, says that less than 1% of the tenancy deposits that it protects in England and Wales end in a dispute.

While 17,628 dispute cases were recorded between April 2018 and March 2019, of that figure, 23% were resolved in the pre-adjudication stages.

Alison MacDougall, the Director of Dispute Operations at the TDS, says: “Resolving disputes over how the tenancy deposit should be divided quickly is beneficial for both the landlord and the tenant.

“That’s why we actively open a dialogue between the parties, to secure a swift and amicable agreement.”

She feels that mediation works best: “Disputes can be tense for parties involved in a tenancy, but we find that, by facilitating a negotiation, we can help defuse situations, and settle disagreements quickly and fairly.

“The parties all benefit from keeping control of the decision, rather than asking a third party to make a decision for them.”

Landlords, don’t forget that you are legally obliged to protect your tenant’s deposit in one of three Government-approved schemes – the TDS being one of them. Our guide to following the law correctly can be found here: https://www.landlordnews.co.uk/guides/a-landlords-guide-to-tenancy-deposits-2/

You are also reminded that security deposits will be capped at five weeks’ rent from 1st June 2019, under the new Tenant Fees Act – more information can be found here: https://www.landlordnews.co.uk/category/tenant-fees-ban/

Scottish Labour Proposes Bill to Control Rent Prices

Published On: May 22, 2019 at 8:00 am

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The Scottish Labour Party has proposed a bill that would control rent prices north of the border.

The Fair Rents (Scotland) Bill, proposed by Pauline McNeill MSP, seeks to enforce fair rent prices, by introducing a points-based system.

The law would link rent prices to average wages, to ensure affordability, while giving tenants the powers to challenge rents and seek reductions.

Rules on restricting rent price rises to once every 12 months are already in force in Scotland, through the Private Housing (Tenancies) (Scotland) Act 2016, but the new bill would further control rent prices. Labour claims that it would ensure that no one is “forced to rent a home that pushes them into poverty”.

The bill honours Scottish campaigner and socialist Mary Barbour, who organised rent strikes and actively opposed evictions.

At First Minister’s Questions, the Scottish Labour Leader, Richard Leonard, said: “We have seen the return of private landlord-ism and rents have soared whilst wages have stagnated.

“According to the Scottish Government’s own figures, over 40% of all children living in the private rented sector are now living in poverty. That is 60,000 children.”

He added: “We think that private rent rises should be capped and controlled. So, Nicola Sturgeon has a choice, will she take the side of rogue landlords and a broken housing market? Or she can back Labour’s plans and back our Mary Barbour Bill.”

A consultation on the bill can be found here. 

South of the border, the Housing Secretary, James Brokenshire MP, has rejected rent controls, but the Labour Party supports them.

In recent years, private rental legislation in Scotland has set a precedent for legal changes in England and Wales, notably the tenant fees ban and proposed abolition of Section 21 notices.

What are your thoughts on Scottish Labour’s plans to control rent prices?