Time for another newsround.
Electricity regulations
Probably the most important legal news item of the week is that the government has finally published draft electricity regulations, which we wrote about here.
There is also an excellent post on Nearly Legal.
The regulations are pursuant to the Housing & Planning Act 2016 so have been a long time coming. They are expected to come into force in April 2020.
Most landlords with pre-2018 circuitry will probably need to get some work done. Hopefully, there will be enough electricians around to do this. David Cox of Arla Propertymark, while expressing approval of the new regulations said
We did raise concerns about the number of engineers available to undertake these reports by the April 2021 deadline but have received assurances from MHCLG about capacity in the supply chain.
Fewer landlords mean higher prices
As the government were warned, it looks like many landlords are selling up and leaving the sector resulting in rents rising.
HomeLet chief executive Martin Totty said:
Despite Brexit implications remaining unknown for most of 2019, the private rental sector has continued to conform to the basic economic principle of supply and demand … the last year has seen more and more reasons for private landlords to potentially exit the market, such as increased taxation and regulatory burdens.
There has also been a constriction in the supply of private rental stock as some landlords have indeed left the market following this and other legislation changes that have negatively impacted their yields. Looking forwards, more potential disincentives are on the horizon for landlords with the promise of a tightening legal regime around no-fault evictions.
The government can’t say that they haven’t been warned about this. The exit of large numbers of landlords will only accelerate the housing crisis.
Housing Benefit
Despite the fact that the government has announced an end to the freeze on Housing Allowance rates, it looks like this is not really enough to encourage landlords to rent to benefit tenants.
Meera Chindooroy, Policy and Public Affairs Manager at the National Landlords Association (NLA), said:
While we are pleased the Government will finally end the freeze on LHA rates, an inflation-based increase is insufficient to address the shortfall between LHA levels and market rents in many areas. The financial support offered by the Government is simply not enough for many tenants to cover their rent.
“Our research shows that a decreasing proportion of landlords are letting to tenants in receipt of local housing allowance or Universal Credit, and that there is a wide variation across the country. It’s vital the Government re-aligns LHA rates with current market rents, in order to ensure vulnerable tenants continue to be able to access properties in the private rented sector.
Short term lettings may not be the answer
Landlords are being warned that moving over to short term holiday lets may not be the answer to issues with traditional lettings as Councils are starting to take action. For example in Scotland, Bristol and now in Brighton.
David Alexander joint managing director of apropos by DJ Alexander Ltd, has said:
Many landlords have felt tempted toward short term letting with its potentially higher returns at a time when margins in the private rented sector (PRS) are being squeezed.
This financial squeeze, coupled with government cuts to tax reliefs, has meant that many landlords have viewed Airbnb as an attractive option.
But the proposed changes in Scotland and Bristol to the way in which the holiday lettings market is regulated could produce more problems than traditional long term letting.
Better the devil you know …
Housing Law in Wales
An interesting post by David Smith on the Anthony Gold blog indicates that the long-delayed Welsh Renting Homes Act may be coming into force in the foreseeable future as a commitment has been made to bring it into force within the life of the current assembly, that is before May 2021. As to the standards,
In response to a written question from Darren Millar AM, the Minister has indicated that regulations will require that a property is only fit if a landlord has:
- installed working carbon monoxide and smoke alarms; and
- undertaken an electrical safety test at least every five years.
While this does not give much detail, it does indicate how the Welsh government is moving and also shows that they are working on the Act behind the scenes. In fact, the standards proposed are not so different from those in England. In England landlords must have smoke alarms and carbon monoxide alarms where they have solid fuel appliances. There is also an intention to make regulations shortly to require all landlords to have electrical safety checks every five years. So, in fact, Wales and England are likely to require fairly similar standards as to property safety over time.
Crisis in the Courts
We have reported many times on this blog about the problems in the courts, due mainly to massive cuts in funding (the Justice department suffered the most severe losses in funding during austerity) and the court closures.
The RLA is now warning that courts are failing all over the country and urgent action is needed, reporting that the average length of time from a claim from a landlord in London to a court issuing an order for a property to be repossessed for legitimate reasons is 30 weeks. This is up from 23 weeks the year before.
Evictions specialist Paul Shamplina of Landlord Action said:
These figures show how bad the court system and waiting times are getting at the moment.
We are seeing delays at Landlord Action on a daily basis by the courts – no judges, lost papers and admin errors being the most common reason for delays.
From being involved with the housing court working group, I worry that with no clear investment and the abolition of Section 21, hearings will double on Section 8 cases and there will not be enough judges to service the hearings.
We have seen recently the massive waiting times for possession cases to be heard in Scotland post the banning of their equivalent Section 21, and the English private sector market is a lot bigger.
The government have promised Court reform before introducing the section 21 change, but can they be trusted to do this properly?
New Pre-Action Protocols
Pre-Action Protocols are court rules setting out the things parties need to do before actually issuing court proceedings for certain types of court action.
As reported by Nearly Legal changes have now been made to two pre-action protocols relevant to housing
Read the Nearly Legal article for details of the changes.
Snippets
- The Property Ombudsman Katrine Sporle explains why she is stepping down
- Find out how much you would be paid on a ‘great estate’ in the country
- Agent who spent £68,000 of tenancy deposit money on her business banned as a director
- Howsy buys Upad out of liquidation and re-employs staff
- Country’s largest landlord licensing scheme, Liverpool, is axed by Government
- Merger of RLA and NLA put back several weeks
- Landlord loses defence and has to pay multiple penalties after failing to serve deposit prescribed information
- The case for designing cities around the needs of children
Newsround will be back next week.
