Posts with tag: tenants

Councillor calls for rent caps on benefit tenants

Published On: May 6, 2016 at 11:40 am

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The leader of Southend Council has proclaimed that he is in talks with the Government about the introduction of rent caps for tenants on benefit.

Ron Woodley, an independent councillor, said that his town is being treated as a dumping ground by London borough councils.

Struggles

Local Housing Allowance and the recent introduction of the housing allowance element in Universal Credit has seen many local authorities struggle to find affordable privately rented accommodation for the homeless. This is particularly true in more affluent areas.

Mr Woodley believes that London boroughs are sending these people to Southend as rents are considerably cheaper. Many London boroughs have market rents much greater than the Local Housing Allowance maximum of £26,000.

He believes that private rental charges to tenants on benefits should be reduced to those currently charged to tenants residing in social housing.

Affordability

Woodley observed that this, ‘would save the Government something like £14bn a year in housing benefit and would make housing in cities like London more affordable, so you’d stop the London boroughs sending people out of London because it’s cheaper elsewhere.’[1]

‘In many European countries they have some sort of cap on what people can charge in rented accommodation and I think we need this to stop the private rented sector running out of control, which is what it’s currently doing,’ he added.[1]

Councillor calls for rent caps on benefit tenants

Councillor calls for rent caps on benefit tenants

Dangers

However, Richard Hair of Hair & Son estate agents, based in Southend, has warned of the dangers that interference in the market could bring.

Hair noted, ‘The Government has an appalling record of interfering in the property market and there have been suggestions not long ago by the Labour Party of capping rent. Anyone interfering in any market place does so at considerable risk to the market place.’[1]

[1] http://www.propertyindustryeye.com/call-for-rent-caps-when-properties-let-to-tenants-on-benefit/

Renting is More Expensive than Buying in Most of the UK

Published On: May 6, 2016 at 8:31 am

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The cost of renting a home is more expensive than buying a property in the majority of the UK, according to new data from Halifax.

The mortgage lender found that it takes longer to reach rental freedom day than it does to reach mortgage freedom day – this means that tenants spend more of their disposable income on housing than homeowners.

Renting is More Expensive than Buying in Most of the UK

Renting is More Expensive than Buying in Most of the UK

On average, mortgage borrowers would have earned enough to pay off their annual mortgage payments by 19th April, while renters will have only earned enough to cover their annual rent by 5th May.

The Halifax found that homeowners spend 29% of their disposable income on their mortgage, compared to 34% by tenants on their rent.

The figures were calculated by using average rent prices, house prices, net annual income and mortgage rates. The bank found that renting is more expensive than buying in all but one area.

For tenants in London, it takes more than half the year to reach rental freedom day, at 195 days. Londoners must wait until 13th July to have earned enough to cover their rent for the year. It takes homeowners in the capital until 26th June to cover the cost of their annual mortgage.

Contrastingly, renters in the North East take less than half the time to cover annual rent costs, at 96 days.

It takes 143 days to reach rental freedom day in the South West, 137 days in the South East, and 122 days in the North West.

After the North East, the regions with the shortest periods are Yorkshire and the Humber at 100 days, the East Midlands at 104, the West Midlands at 112, and 113 days in the East of England.

The Mortgage Director at Halifax, Craig McKinlay, comments: “For most homeowners, mortgage payments are the biggest outgoing every month; knowing they’ve earned enough to pay off their mortgage for another year should be a reassuring thought.

“On the other hand, those who rent will need to work a further couple of weeks to have earned enough to cover their annual rental cost.”

In Scotland and Northern Ireland, homeowners have earned enough to pay off their annual mortgage payments by 12th March, while in Wales, it is 1st April. There is no data available for rent costs in Scotland, Northern Ireland or Wales.

Rental freedom day is calculated by taking annual rent payments as a percentage of average disposable income.

Call for Rent Caps on Properties Let to Housing Benefit Tenants

Published On: May 5, 2016 at 9:35 am

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A local politician has called for rent caps to be introduced on private rental properties let to tenants on housing benefit.

The leader of Southend Council, Ron Woodley, believes London borough councils are using his town as a “dumping ground” when they cannot house homeless people.

Local authorities in wealthy areas are struggling to find affordable private rental housing for homeless people, as Local Housing Allowance, and now the housing benefit element of Universal Credit, is not sufficient enough to cover the high rent prices.

Woodley claims that London borough councils are sending people to Southend, as rents are cheaper.

Call for Rent Caps on Properties Let to Housing Benefit Tenants

Call for Rent Caps on Properties Let to Housing Benefit Tenants

In a number of London boroughs, private rent prices are far higher than the housing benefit cap of £26,000 per year.

Woodley believes that private rents for tenants on benefits should be capped to those charged in the social housing sector.

He says: “What I’m saying to the Government is they should be looking at the people living in the private rented sector subject to housing benefit and, over the lifetime of a parliament (five years), reduce rents down to that of social housing.

“It would save the Government something like £14 billion a year in housing benefit and would make housing in cities like London more affordable, so you’d stop the London boroughs sending people out of London because it’s cheaper elsewhere.”

He adds: “In many European countries, they have some sort of cap on what people can charge in rented accommodation and I think we need this to stop the private rented sector running out of control, which is what it’s currently doing.”1

However, Martin Ransom of Pace estate agents in Southend, warns that reducing returns for landlords could discourage them from renting to tenants on housing benefit.

Since Universal Credit began its rollout across the UK, many landlords have been concerned about changes to their tenants’ finances. There have been reports of tenants being forced into long-term debt by the waiting times between payments.

Additionally, Judith Cordoran, the Chairman of the South Essex Association of Landlords, believes introducing rent caps could exacerbate the homeless crisis in Southend, but she says she is willing to discuss the matter with Woodley.

She explains: “Landlords either take tenants on DSS or they don’t. We don’t, but if you think about the economics of a scheme like this, you will end up with only the very low quality, unrepaired houses that have belonged to landlords for 50 years, at the low price Mr. Woodley is suggesting.

“I’m a huge supporter of his, but we just need to have detailed conversations and he needs to come to the association meetings held at the council offices and understand from the people who attend those meetings the reality of the situation.”1

Do you believe that rent caps would help resolve this issue? 

1 http://www.echo-news.co.uk/news/local_news/14468208._Reform_rent_system_to_keep_Londoners_out_of_south_Essex_/

Warning after agents expelled from TPO

Published On: May 4, 2016 at 12:00 pm

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A warning has been issued by Britain’s largest property redress scheme regarding the actions of two letting agents.

Both agencies, ‘The Flat Agency & Michael Browns Ltd,’ and ‘Property Vibe,’ based in Southampton, were expelled from The Property Ombudsman for a minimum period of three years.

Complaints

The decision to remove The Flat Agency & Michael Browns Ltd’ came following complaints from local landlords and tenants. Cases brought against the agent were all similar and revolved around a delay or failure to pay monies owed. Several raised serious concerns with the Ombudsman, which moved to brandish the agents’ practices are both, ‘deceitful and dishonest.’

Having failed to pay the money owed or any compensation, the agents’ misdemeanours were referred to the scheme’s Disciplinary and Standard’s Committee (DSC). The DSC then moved to expel the agent from membership and registration of the Ombudsman.

Without registration, the two companies cannot legally trade as agents, with other redress schemes also wary of letting previously expelled agents to join. Landlords who lease their property with a letting agent that is not registered with The Property Ombudsman cannot have their dispute reviewed by the scheme.

Warning after agents expelled from TPO

Warning after agents expelled from TPO

Lack of regard

Gerry Fitzjohn, Chairman of the TPO Board, noted, ‘cases like these are extremely rare but this agent has demonstrated a complete lack of regard for its clients and failed to forward money to them which it should have been keeping in a separate clients’ money account. The firm committed several flagrant breaches of the TPO Codes of Practice for Residential Letting Agents and has been expelled as a result.’[1]

‘Both agents have failed to comply with the TPO Code of Practice by not providing any evidence to support their side of the story or demonstrate an appropriate complaints handling procedure. Their reckless management has caused avoidable aggravation, distress and inconvenience,’ Fitzjohn added.[1]

Mr Clive Robinson, Trading Standards Team Leader at Southampton City Council, noted, ‘Trading Standards can confirm that we have received information both from the Ombudsman and a number of landlords and tenants. Membership of an approved ombudsman scheme is a legal requirement for all letting agents as is the proper protection of tenant’s deposits and we will be working with the Ombudsman and others to address any identified breach of the law.’[1]

[1] http://www.propertyreporter.co.uk/landlords/property-ombudsman-expells-two-letting-agents.html

 

Right To Buy extension slammed

Published On: April 29, 2016 at 11:11 am

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A number of MP’s have moved to lambast plans outlined by the Government to extend the Right to Buy scheme to Housing Association tenants.

The Public Accounts Committee has released a report that questions how the policy will be funded and how replacement properties will be constructed.

Overcrowding

In addition, the MP’s argue that there is evidence that Right to Buy could actually increase overcrowding for those most in need of housing.

As an objective, the scheme is designed to allow Housing Association tenants to buy their own homes, with discounts akin to those currently enjoyed by council tenants.

The Public Accounts Committee has said that there is a danger that an increased discount for Housing Association tenants would lead to more fraud.

Speculative

Meg Hillier, chair of the Public Accounts Committee, noted that the approach to paying for the policy was speculative. She said, ‘there are no costings or workings out. We are not talking about a back of an envelope calculation-there is no envelope at all.’[1]

Previously, the policy has been criticised by the Local Government Association and the Institute for Fiscal Studies. What’s more, it has already been rejected by the Welsh and Scottish governments.

The Government has stated that the extension of Right To Buy, currently being piloted in five UK locations-will be funded by councils selling off their most valuable houses.

However, the MP’s against the move said the Government’s commitment, ‘will not ensure that these will be like-for-like replacements.’ They argue homes, ‘can be a different size and in a different area and may cost more to rent.’[1]

Right To Buy extension slammed

Right To Buy extension slammed

Difficulty

In their report, the MPs noted that it would be extremely difficult to replace homes on a one-for-one basis.

The Government however has insisted that all replacements homes will be constructed.

A spokesperson for the Department of Communities and Local Government said, ‘this Government makes no apology for helping people into homeownership. Our voluntary agreement with housing associations will mean 1.3 million tenants will have the chance to own their own home, while every home sold will be replaced with a new affordable property.’[1]

More information on the extension can be found here.

[1] http://www.bbc.co.uk/news/business-36163172

Rogue landlord jailed for fake HMO documents

Published On: April 28, 2016 at 9:20 am

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A rogue landlord from Luton has been jailed, following being found guilty of six counts of fraud.

Mr Moses Ogoe obtained properties using false documents. He then proceeded to covert these properties into HMO’s, before letting them and falsely posing as the landlord.

Claims

In total, Mr Ogoe pretended to be the landlord for seven properties, even pretending to be landlord when on court bail!

When obtaining the property, Ogoe produced fake documents, claiming his profession was a doctor, catering manager and security manager. Mr Ogoe’s actual profession was a temporary security guard.

On numerous occasions, Ogoe evicted tenants without notice if they did not pay an increase in rent immediately.

Throughout the duration of the investigation, Mr Ogoe maintained his innocence and reportedly refused to co-operate with officers. However, on the first day of the trial, he changed his plea to guilty.

Rogue landlord jailed after fake HMO document

Rogue landlord jailed after fake HMO document

Greed

Upon sentencing Ogoe, his honour Judge Kay said, ‘you saw an opportunity to rent relatively sizeable properties and sublet them to desperate individuals who needed somewhere to live. You were not providing a public service because you did this for greed. You defrauded them as you did not provide a genuine tenancy and the protection that would give.’[1]

Before this sentencing, Mr Ogoe had received a caution, relating to housing offences under the Housing Act for one of the illegally converted properties.

Ogoe was sentenced to 16 months in prison and told to pay a total of £7,500 in costs. In addition, the judge ordered the computers on which the fake documents used to obtain the property were produced to be forfeited.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/4/fake-landlord-claim-and-false-hmo-documents-lead-to-prison-term