Welcome back to our weekly Newsround. What have we for you this week?
An Update on Right to Rent Check rules
Recent government guidance has confirmed that landlords and lettings agents can continue the process of right to rent checks online by video call.
This practice was scheduled to end at the start of July, however it has been extended until the end of August. These short term changes were allowed due to the pandemic making it increasingly more difficult for landlords & letting agents to carry out the checks.
There is also a delay in the implementation of new right to rent checks concerning EU, EEA & Swiss citizens.
As reported in Landlord Newsround #199, landlords and letting agents will now have to check the immigration status of prospective tenants rather than just their national identification card. This provision has also been delayed until the end of August.
New Government Guidance for English Landlords and Tenants
A new updated guidance document for landlords and tenants has been released by the Government. The guidance covers issues that may arise during the existing pandemic including what to do if a tenant is struggling with rent as well as the current health and safety obligations. This document is advisory and informs people in two major areas:
- Rent, mortgage payments and possession proceedings
- Health and safety obligations, repairs and inspections in the context of coronavirus
This document also details the roadmap of notice periods, which is important for landlords. Note that this is only the case in England. From the 1st of August, the notice period for cases where there are less than 4 months of unpaid rent, will be reduced to 2 months’ notice.
The government guidance can be found here
A new service for tenants
Estate agency owner Ajay Jagota who formerly ran an alternative deposits service, has now set up a dispute resolution service for tenants, called Veriwise. Saying
Most tenants have no idea of their rights and even fewer know how to go about getting help when things do go wrong,
Many don’t want to get into one-on-one disputes with their landlord or letting agent because it could make their tenancy less secure, so Verisure offers a third-party service that works on their behalf to sort out disputes.
The business is based on the fact that most landlords and agents won’t want to go to court and so will be more likely to settle than many tenants realise.
There is no up front charge to tenants but Veriwise will take 25% of any compensation they are able to obtain.
Landlord pair to pay tenants £34,000 after rent to rent deal goes wrong
A landlord pair (James and Catherine Doig) have been ordered to pay more than £34,000 in back rent to six tenants after sub-letting their unsafe, unlicensed HMO via a rent-to-rent deal.
The landlords had rent out their property to two people who subsequently sublet the property to other tenants in order to make a profit, with nine tenants living within the property using shared facilities. After the tenancy, the tenants claimed a rent repayment order as the property had no HMO license.
James and Catherine claimed innocence on two counts, firstly that they were unaware of the HMO licensing rules and secondly that they were also unaware that the property was being sublet. However, on the second point they had admitted to doing a property inspection and noticing more people living there then on the tenancy agreement. The Doig couple also suggested that the two original tenants should be the ones receiving the fine as they should have applied for the HMO license.
In addition to having an unlicensed property, the council also uncovered numerous safety issues within the property, such as obstructed fair escapes, untested fair alarms and smoke detectors that didn’t work.
This all culminated in the landlord couple receiving a fine for £34,800.
This case in part deals with who (between the landlord and the subletters) pays a rent repayment order, you can read more about this issue in our earlier post here.
Note that Landlord Law provides training on ‘rent to rent’ which you can read about here
New Report into letting practices at the lower end of the private rented sector with a focus on landlord intent and property supply.
A new report by Julie Rugg and Alison Wallace has been published this week identifying issues within the private rented sector & tenants on modest incomes as well as those who are in receipt of benefits.
The report also explores why some landlords might express a ‘No DSS’ preference whilst others actively target that market.
The report found that some landlords do target the benefits market because payments are guaranteed income (when Local Housing Allowance and Universal Credit payments for rent go straight to the landlord rather than through the tenant).
In addition, even during the pandemic, less than five per cent of tenants in receipt of housing benefit were behind with their rent payment. This, especially at a time when covid has caused such drastic monetary losses within the private rented sector, should be seen as a positive for benefit tenants and something landlords should take into consideration.
The report also identifies five factors that have caused landlords to exit the market recently, they are:
- Universal Credit: many landlords with extended experience of Local Housing Allowance were extremely unhappy with the operation of Universal credits currently and looking to reduce their Housing benefits lettings.
- Demography: many landlords were ‘baby boomer’ landlords who had built their holdings during the prime ‘by-to-let’ years and were now beyond retirement age
- ‘Regulatory burden’: the increased burden of regulation was felt to be problematic for some landlords. None had issues relating to the need to regulate property quality and management, but some felt that compliance timescales – for example, for energy efficiency – could be unrealistic
- Hassle: for a number of respondents, the financial returns from letting property were not commensurate with the level of ‘hassle’.
- Risk: landlords were of the view that the market now presented a harsh environment for small landlords, such as for example the impending abolishment of s21.
The Report can be found here.
Lloyds Bank’s life as a landlord is about to start
Lloyds which has previously expressed an intention to invest in the private rented sector, is it seems, on the point of acquiring a block of flats in Peterborough and could be renting them out in a few weeks.
The project, codenamed ‘Project Generation’ aims to bring in more income for Lloyds – as normal bank income is lower than previously due to the very low interest rates. It will also give them an opening to sell their other products to tenants such as insurance or loans for deposits.
Snippets
- Appeal to landlords to house refugees in government-funded scheme
- Call on Brighton council to tackle rogue landlords at Acorn rally
- Concern over low take-up of free legal advice in eviction review
- Office For National Statistics released the PRS market Summary from April 2020 to March 2021
- The government unveils strategy to end rough sleeping
- Big referencing firms are too sloppy when checking tenants, claims upstart proptech