Mre news items for you on a Friday morning. First – good news for landlords:
Sucess for the section 21 crowdfunding campaign
As you should be aware by now, if you don’t serve your gas safety certificate on your tenants before they move in, you will (as the law currently stands) have lost your chance forever to use section 21 to evict your tenants.
There have been two main cases on this. The second one, the Trecarrell House case, is being appealed to the Court of Appeal, supported by the Residential Landlords Association.
To help fund the case the RLA has set up a crowdfunding site which at the time of writing is only £130 off its target of £3,000 by 20 September. So good news for those who support the case.
Still, I am sure there will be further appeals as it will cost more than £3,000 to pay for a full Court of Appeal case with solicitors and barristers and all.
You can see a clip of David Smith discussing the issue from a couple of months ago on our YouTube page.
Universal Credit – half of landlords report tenants in arrears
Nothing new in this – you won’t be surprised I am sure at new research coming out of the Residential Landlords Association saying that 54% of private landlords who have let to tenants on Universal Credit in the past 12 months have seen them fall into rent arrears.
Landlords whose benefit tenants have yet to migrate to the new system are understandably concerned at what will happen when they do.
The RLA is calling on the government to do more to help, including
- Giving all tenants from the start of a claim for Universal Credit the ability to choose to have the housing element paid directly to their landlord.
- Ending the five-week waiting period to receive the first Universal Credit payment.
- Ending the Local Housing Allowance freeze to ensure it reflects the realities of private sector rents.
David Smith, Policy Director for the RLA, said:
Today’s research shows the stark challenges the Government still has in ensuring Universal Credit works for tenants and landlords.
The system only provides extra support once tenants are in rent arrears. Instead, more should be done to prevent tenants falling behind with their in the first place.
Only then will landlords have the confidence that they need that tenants being on Universal Credit does not pose a financial risk that they are unable to shoulder. Without such changes, benefit claimants will struggle to find the homes to rent they need.
The research also showed that 36 % of landlords said that they had buy-to-let mortgage conditions which prevent them from renting to benefit claimants.
Landlords’ quest for justice against fraudulent agent
You may want to take a look at this report from Property Industry Eye on how two landlords sought justice against a fraudulent letting agent Andre Montaut.
This follows 26 landlords having had to reimburse a total of £70,000 worth of deposits to their tenants after the money vanished. Montaut at the time was running Barrington Property. Montaut actually committed the crimes between May and November 2012, but was not charged fraud in until January 2018.
Here is the sorry story in outline as reported by Eye:
No fewer than three different police officers were put in charge of the case between January 2013 and this month, working under four different senior officers, while there were three successive Thames Valley chief constables, all of whom knew of the case.
Correspondence included letters to and from MPs and the chief constables; there were three different victims’ meetings; and constant phone calls to police asking about progress.
The case was first submitted to the Crown Prosecution Service in October 2014 but, says Austen, “fizzled out”.
It was referred a second time to the CPS in February 2016, and submitted a third time in September that year.
Charging decisions were delayed repeatedly throughout 2017, and finally Montaut was charged with two counts of fraud in January 2018.
Court proceedings were delayed and rescheduled repeatedly, stretching the whole court process out for 536 days until sentencing on Tuesday this week.
It is not quite over: a proceeds of crime hearing originally scheduled for September 9 is now due on November 25.
This case shows how important it is to have proper regulation of letting agents – not just to protect tenants but to protect their landlords too. After all the tenancy deposit schemes protect the tenants, not the landlords. Landlords are expected to refund the schemes if they pay out to tenants after dishonest letting agents run off with the money.
A new report claims the housing crisis is not caused by lack of supply
This is not the first time this has been claimed. Danny Dorling has made similar claims in the past for example in this video. However, I not sure he said that there was a surplus as is (we are told) being claimed by this new report which is from the UK Collaborative Centre for Housing Evidence.
The author of the report Ian Mulheirn said
Politicians of all stripes are unanimous in seeing an increase in supply as the solution to our housing crisis.
The supply shortage story is a red herring. Building 300,000 houses per year will do very little to bring down house prices in Britain and next to nothing to raise home-ownership.
The real culprit for sky-high house prices is low global interest rates that have made it easy for home-owners and investors to take on large amounts of mortgage debt and pay ever more for houses.
The report calls for politicians to focus on reversing the erosion of social housing stock, end housing benefit cuts, and improve wage growth for young people.”
Sounds sensible. I seem to remember that when I bought my first (tiny) flat in the 1980’s (for 3x my salary at the time) the interest rate was about 11%.
I may try to find time to read this report in full, although there are so many reports out there that if I read them all I would do no work at all …
Problem with agents client accounts with Lloyds
If you are a letting agent and are not a member of ARLA or one of the other similar bodies, you may be experiencing problems with your client account, particularly if you bank with Lloyds.
As reported here, Lloyds is asking agents to close down ‘undesignated’ client accounts and open up separate client accounts for each landlord. Apparently this is in response to anti-money laundering legislation which is due to be tightened next year.
Neil Cobbold, CEO of PayProp UK, commented:
Agents may have thought that the introduction of mandatory CMP and the requirement for separate business and client bank accounts would be enough to ensure transparency and satisfy the banks.
However, after review, Lloyds Bank appears to have decided that the best way to comply with anti-money laundering regulation is to mandate that any client money must be held in one account per landlord. This approach is likely to have been influenced by current and proposed legislation and could be followed by other banks soon.
You have been warned. Note though that if agents were properly regulated and members of a regulated body (as solicitors are) banks would take a different view.
- Letting agent fined £3,000 after HMO fire safety breaches
- RICS calls on the Government to stop meddling with the private rented sector
- London Property Licensing reports confusion over Barking & Dagenham’s new property licensing scheme
- Report says half of current landlords would not go near buy to let now
- Problems with Kevin McCloud’s projects as investors face big losses
Newsround will be back next week.