Welcome to the Friday Newsround. Most of the news items I see today are cries for help to the Chancellor, whose next budget is looming in March.
Help needed for all renters
The government has announced an extra £50 million support for students, which is great, but the NRLA is asking why student renters are being treated differently from all the others (could it be because they are more vocal in their complaints?).
Ben Beadle, chief executive of the NRLA said:
Given students are continuing to receive maintenance loans alongside this new funding, Ministers need to explain why the same support is not being provided to other renters struggling as a result of the pandemic.
Our figures suggest that seven per cent of private renters have built arrears due to coronavirus whilst the government has admitted that private renters have been hardest hit by the pandemic.
The chancellor needs urgently to develop a package to help tenants pay off arrears built since lockdown measures started last March just as is happening for students. This is the only way that tenants and landlords can sustain tenancies and ensure renters do not face the damaging consequences of their credit scores being severely impacted.
New Universal Credit hitch
For example, thousands of renters who have lost their jobs are claiming benefit but landlords are unable to set up Alternative Payment Arrangements because the UC portal is now closed to new claimants.
As a result of this, many more landlords are, it is claimed, serving notice on their tenants. Sherrelle Collman MD of Caridon Landlord Solutions said
The pressure that DWP must be under due to the rise in claimants is enormous, but when tenants are struggling to meet their rent payments, we know that APAs not only have a significant impact on limiting arrears, they also help to sustain the tenancy.
The government wants landlords to support tenants, but there has to be a middle ground. The landlords we are speaking to say they are going back and forth on the phone, only to be told they will be called back by a case manager, then hearing nothing.
We’ve seen a 20 per cent uplift in landlords wanting our assistance to set up APAs, and all were at the point where they were considering serving notice to their tenants because they had no other choice.
Chancellor urged to scrap draconian landlord taxes
There is also the problem that more and more landlords are exiting the sector, as the mortgage interest relief changes, the scrapping of the ‘wear and tear’ allowance and the introduction of the 3% stamp duty surcharge have hit their profits over the past few of years.
This has meant that the dwindling number of properties to rent in some areas has left prospective tenants with little alternative but to bid against each other, driving up rents.
Ben Beadle, chief executive of the NRLA has pointed out that supporting landlords will add to the net supply of housing – including investment in new build homes, the conversion of large properties into affordable units, changing the use of a property from commercial to residential, or bringing one of the almost 650,000 empty homes in England back into use. Saying
To have a tax on developing new housing is completely nonsensical at a time when more is needed. Supporting growth in the private rental market, alongside all other housing types, would provide a significant boost to the economy in the midst of the Covid-19 pandemic. Research published last year suggests that landlords inject over £3.5bn into local businesses across the UK
There is also the problem that the tax system as it is at the moment makes it more profitable to rent holiday accommodation rather than long term homes for families. Beadle commented
To be taxing long term homes to rent less favourably than holiday lets is simply bizarre. It completely undermines efforts by the Government to encourage the provision of long term, secure housing.
It is time for the government to realise that its tax policies have created a shortage of rented housing. This can only mean higher rents and reduced choice for renters. This is not going to do much for the levelling up agenda.
So we all await the budget with interest to see what the Chancellor does. If anything.
A growing number of claims against agents
It’s a tough time to be an agent. Leaving aside the problems that have come with the pandemic, it seems that there is a growing number of claims being made against agents, often with the assistance of ‘no win no fee’ law firms. A report from Mint Insurance Brokers says
There is no doubt we live in a society where there is an ever-increasing claims culture,’ the report adds. ‘Extensive choice coupled with advanced technology, social media, online claim centres, chat rooms, blogging, No Win No Fee law firms have all served to educate the consumer of their rights who in turn have become increasingly demanding and litigious.
They also report an increase in employee fraud and dishonesty claims and a rise in DSS discrimination claims following recent cases.
The answer to all this is surely for agents to make sure that they make fewer mistakes.
- If you do not discriminate against DSS tenants they will not be able to claim against you.
- If you protect tenants’ deposits on time and serve the prescribed information on time tenants will not be able to claim the penalty of up to 3x the deposit sum
- If you monitor your client money properly there will be fewer opportunities for dishonest employees to misappropriate it
Proper training will help. There is no excuse not to, particularly in view of the huge amount of free webinar training available – for example, our Lockdown Learning project.
- Government tells landlords – no national licensing scheme planned
- Advice for landlords on how to reduce deposit dispute risk
- Huge five-year Build To Rent lettings deal for London agency
- MPs want a better deal for landlords with break clauses for students
- Off-road, off-grid: the modern nomads wandering America’s backcountry
- Penthouses and poor doors: how Europe’s ‘biggest regeneration project’ fell flat
Newsround will be back next week. Stay safe.