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Landlord Law Newsround #220

November 12, 2021 by Tessa Shepperson

Our round-up of news items over the past week. This week we look at the new Building Back Britain report and discuss the impending EPC ‘crisis’.  As well as considering an interesting new law in Amsterdam.

Building Back Britain report released

UK leading housing figures, including representatives from Legal & General, Barratt developments and Mace, have released a report which details that a radical shift is needed from the Government in order to support housing delivery over the next couple of decades.

The Building Back Britain commission has reported that around 140,000 homes will be required every year for the next 20 years, especially in the north and midlands,  in order to fill the housing demand.

There will be a marked shift of focus away from London and the south east, into areas which the Government has labelled as needing regional growth. In these areas, mostly found in the midlands and in the north, the housing demand will increase. An example of this is Birmingham which has the greatest housing demand, predicted to increase to around 12,400 homes needing to be built every year.

The jobs boost which will result from the government’s plans to boost regional growth will lead to increased demand for housing of different tenure for people who are already living in these areas, as well as other people who will move to these towns and cities. It is estimated that around a third of all housing built will need to be ‘affordable housing’.

Terrie Alafat, Chair of the Building Back Britain policy said:

Our results have profound implications for policy. The Government’s current housing strategy simply does not fit the levelling up agenda. It is based on past growth trends and will not be dynamic enough to meet future demand. The increase in demand in levelling up areas should reduce the pressure for new homes in other areas that are already economically developed.

EPC ‘crisis’ could make properties unrentable by 2025

There is growing concern within the private rented sector that the requirement for all rented properties to have a minimum EPC rating of band C by 2025 will cause many properties to be unrentable. According to figures from the Ministry of Housing, around 13 million properties currently have an EPC rating of band D or below.

John Eastgate, property finance director from Shawbrook Bank, argued that current schemes offered by lenders and the Government to help landlords improve their properties’ energy efficiency measures do not go far enough, especially for listed properties, and that landlords will need greater financial assistance to reach band ‘C’.

Eastgate says that without significant financial help:

we risk a substantial part of the private rental sector becoming unrentable and therefore unmortgageable and unsellable in 2025. With home ownership still out of reach for many this could leave us with a shortage of quality homes to rent.

However, at least 17% of landlords have already made attempts to improve energy efficiency (20% of portfolio landlords) and it looks as if some tenants may be willing to pay more rent if improvements are made.  For example replacement windows (18%), a new boiler and heating system (15%) and solar panels (10%).

There are interesting comments on the article from landlords saying that they are considering selling up, that making improvements will result in large rent increases, and pointing out the inconsistencies in EPCs which do not relate to the actual energy used in the property.

Impending clampdown on portfolio criminal landlords in London

London councils of Hounslow, Hillingdon and Ealing, backed by Government money have warned that a joint approach in clamping down on unsafe and unregulated properties will root out criminal landlords.

The new approach will focus on individuals who own a number of unregulated properties, rather than dealing with properties on an individual basis. Often these properties are unregulated and unlicensed due to numerous fire and safety breaches which make living in these houses so dangerous for tenants.

New Government funding must reach landlords warns NRLA

A study, conducted on behalf of the NRLA, shows that 61% of landlords who during the pandemic offered at least one tenant a rent free or deferred rent period absorbed the losses from their savings. Considering 34% of all landlords are retired with rental properties being their source of income as their pension, The NRLA have warned that this reliance on landlords savings is not sustainable in supporting tenants facing rent arrears.

Government data reveals that between April-May 2021, 7% of tenants in England, ie around 800,000 people, were behind with their rent. This is more than double the number of tenants compared to the same period in 2019/20.

Ben Beadle, chief executive of the NRLA has welcomed new funding now made available for tenants to pay off covid related debts, including rent, as this will inevitably trickle down to landlords. Saying, however, that to make the funding as effective as possible councils must

ensure tenants who need it can access the funding swiftly. Without this, landlords will be left between a rock and a hard place either expected to sustain rent arrears they cannot afford or to repossess their properties, neither of which we want to see.

Poll reveals a worrying attitude by Landlord and Tenant’s on property safety

A poll, commissioned by electrical testing firm Hexo services has revealed a lack of care regarding gas and electrical safety by landlords and tenants. Almost one in five landlords and tenants are more concerned about tidiness and cleanliness over gas and electrical safety.

The poll also found that many renters do not fully understand their rights and landlord’s obligations regarding gas and electrical safety.  44% of tenants polled did not know that landlords have a duty to check electrics every five years. Landlords were also called into question as it was found that although 90% of landlords have their electrics checked within their property only  a worrying 37% met the new requirements for five-yearly checked.

New Levelling Up survey for tenants

The government has launched a new survey of private tenants which among other things asks if they would like to be able to access information about their landlord and the property.  A landlord register may be on the cards as the survey page states:

As part of the Government’s commitment to explore the merits of a national landlord register, the Department for Levelling Up, Housing and Communities are engaging with a range of stakeholders across the private rented sector.

This survey will inform this work and help us to further understand the difficulties individuals face when renting, letting or enforcing property standards in the Private Rented Sector.

How new Amsterdam rules will discourage buy to let investors

From January 2022 homes worth less than 512,000 Euros (which accounts for 60% of homes in Amsterdam) must be lived in by the legal owner for four years, in plans aimed at pushing buy to let investors out of the city centre.

Jakob Wedemeijer, Amsterdam’s housing alderman, said:

It is unacceptable that people looking for a home are trumped by investors who buy homes to rent them out at sky-high prices.

That is why we want to ensure that as many homes as possible can only be bought by people who will actually live there. Homes are for living in and not for making money.

There are exceptions if the property was already a rental at least six months before the sale, and the property can still be rented to family members. Other large cities are considering introducing similar measures to push property investors out of cities.  Could this come to the UK one day?

Snippets

  • Landlord ordered to repay former tenants almost £47,000
  • Government to tighten Airbnb loophole
  • Two month mediation project starts – is it really long enough to succeed?
  • Covid Impact on landlords and renters far less than feared
  • A blight on our modern society: local authority secures an unlawful profit order for subletting since 2003
  • Community Order for landlord over gas breach
  • Rising university costs prompt new buy-to-let boom among parents
  • Most councils fail to tackle rogue landlords – unlike Southwark, Birmingham and Hull
  • Bailiff-enforced evictions to be suspended over Christmas season

Newsround will be back next week.

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About Tessa Shepperson

Tessa is a specialist landlord & tenant solicitor and the creator of this site! She is a director of Landlord Law Services which now hosts Landlord Law and other services for landlords and property professionals.

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