A Section 21....... But not as we know it

Some of you out there maybe following with interest the recent of Spencer v Taylor concerning the serving of a Section 21 notice.

As we all know (I hope)  there are two types of Section 21 notice, one to be served during a fixed term and one to be served when tenancy is periodic, both required different information to be set out in order for the notice to be correct and woe-be-tied any landlord who served the wrong one or got the dates wrong when he applied to the court for possession.

What Spencer v Taylor shows us is that this previous thinking could now not be required.

The Court of Appeal specified that where there was originally a fixed term tenancy then even if a Section 21 Notice is served after the expiry of the fixed term, the landlord can rely on a Section 21(1) Notice. Therefore, provided that not less than 2  months clear notice is given, a Section 21(1) Notice can be relied on at any time. The role of a Section 21(4) Notice does not become redundant but is only relied upon when being served when the tenancy was periodic from the start

It is thought that this new angle on the serving of section 21s could see more tenants evicted and less possession claims being thrown out of court, but in reality will this really be the case.

In my capacity I still see a good number of section 21 notices that have not been completed correctly by both DIY landlord and letting agents, if some still haven’t grasped the logic of two notices for two different tenancies, Fixed tern & Periodic, can we really expect a sudden influx of Section 21s that reflect the revised understanding from this case.

But of course the main point still exists, that regardless of which section 21 a landlord uses, if he/she has not protected the tenant deposit and given prescribed information to the tenant then any section 21 notice served will be invalid any way.

All we can do is wait, watch and wonder …………

Landlords still ignoring the Law books in favour of DIY Lettings

I am always surprised to read a media article of a landlord who has not done the basics when letting a property or blatantly ignored the rules and I am sure we all have a local story we can think of.

However I am becoming increasingly alarmed by the number of tenants, in my local area that I am seeing whose landlord clearly have no idea of the law, or do, but choose to ignore it.

The list of issues is endless, but the most common is landlords still not protecting deposits, in the last month I have dealt with 3 tenants whose landlord didn’t protect their deposit at any point during their tenancy and is now refusing to return it. Shockingly one of these landlord rented his property through an agent, who I would have expected to deal with the deposit or at least advise the landlord of his obligations and the law.

The next most common issue is landlord not allowing tenants to leave a tenancy early – now I know most of you will be jumping up at this point and say “too right”  but I’m talking about a tenant correctly activating their break clause, these landlords are telling tenants the break clause does not apply to them and one landlord even told the tenant “she” needed to serve a Section 21 if she wanted to leave the property.

Now I know this all sounds very unbelievable but I can assure you these are real issues, but where do we start in the education?

Is it up to the government to regulate the industry of both landlords and agents, and if so how is this monitored.

Should the education start with the tenant? If all tenants knew what they should expect would the ‘dodgy’ landlords eventually be squeezed out because they just wouldn’t get tenants.

The letting industry is a viscous circle that has spun on its own for so long I don’t think we will ever successfully stop its motion.

But surely for both landlords and tenants there must be a better way…..?

The End of Deposits as we know them

 The End of deposits as we know them.

I was surprised this morning to read, that The DPS had been axed by the government back in early September.

I know Capita had taken over, then pulled out about 6 months later, but the closers of The DPS really had been kept well and truely under the radar.

All deposits currently protected by DPS have been taken over by MyDeposits, so does this mean we no longer have a FREE scheme for landlords to protect tenants deposits in? It would seem so.
Also MyDeposits have recently changed their policy on how deposits are protected and will automatcally unprotect deposits when a fixed term comes to an end, this means landlords will need to reprotect within a set time line to avoid the penalties and of course pay the cost of reprotecting.

So with less competion in the deposit protection market and as far as I know both remaining schemes charging landlords, will this spell the end of the Deposit up front?

Will landlords want to pay to protect the deposit, which is taken because its what is don't rather than a legal requirement.

I wonder if we will shortly see an increase in insurance schemes and deposit bonds as an alternative to cash deposits, have the government in their hast to make a quick buck actually shot themselves in the foot and signed the death warrant for deposits as we know them.

From Private tenant - to Living on the streets in 3 easy steps

Increasingly I am seeing more and more people come through the door, with eviction notices for rent arrears, nothing new about that you may think, but on brief closer inspection, it transpires that these rent arrears aren’t actually the tenants fault…… I know you are now all screaming  “well of course it’s their fault, they should pay their rent”

In essence I would agree, after all that is the main term of any tenancy agreement, however, many tenants are finding themselves the victim of the benefit caps.

We have all read recently that 1 in 3 council tenants & thousands of housing association tenants have been forced into arrears since April this year, however less is being voiced about the number of private renting tenants who are also finding themselves in rent arrears that they had no control over.

Under LHA rules tenants are only paid for the number of rooms that they are deemed to need not the number of rooms in the property.

This is seriously affecting private renting tenants who have either been on HB from the start of their tenancy or have found themselves on benefits due to redundancy.

The bedroom tax penalises tenants if they have a “spare” bedroom by reducing their housing benefit by up to 25 per cent. As emergency funds from councils dry up, experts warn the situation is expected to deteriorate further over the coming months

Many PRS tenants who could easily afford their rent in the past have found themselves struggling to meet the full cost or in most situations I’ve seen  been served with notice for rent arrears.

Most tenants in this situation are not in any financial position to make payment arrangements with their landlords to pay off the arrears due to the cut in their benefit payments coupled with the lack of employment out there.

Local councils are also wiping their hands of these tenants and seeing them as intentionally homeless due to the rent arrears.

In the last 2 weeks alone I have dealt with 4 families in my local area who this has happened too and the councils are evicting them from the temporary accommodation and ending their duty of care.

So what now for these families who find themselves literally on the street with nowhere to go?

NO private landlord will take them on (rent arrears)

NO local council won’t touch them (rent arrears)

NO Housing association will house them (rent arrears)

And in all fairness who whats to live the rest of their life in a Hostel…

The government really need to sharpen their pencils and make some sense of this mess before most of the UK find themselves living on the streets.

I guess thats one way to 'Cheapen' Housing.... Demote it

Well, we all sat by our TVs, Radios and social media apps waiting for the outcome of the government reshuffle, but were we really prepared for the outcome?

Yet another Housing Minister bites the dust before the poor man's even had a chance to make a difference and to add insult to injury it was over 24hrs before anyone was put in his place.

Now a cynic would say that this lack of a replacement was because someone 'forgot' to fill the box on the reshuffle spreadsheet.... but coupled with the fact that the post of Housing Minister has been down graded, this is less of an oversight and screams more of the fact that the government don’t see Housing as a very important issue.

With the launch of Help-to-Buy and the loudhailer call for a regulation of the letting industry we'd been lead to believe the government had finally taken the housing problems in the UK seriously.............

However it would now seem they were just lulling us into a false sense of security that something was actually going to be done.

So what now for the millions of people who can’t get on the housing ladder and the millions of people still being ripped off by agents and landlords??

Well it would seem the answer is "tough" So what can this new demoted Housing Minister bring to the table... not forgetting Mark Prisk was at least a FRICS

Well Kris Hopkins is an ex-squaddie (nothing wrong with that at all) has previously been portfolio holder for social services and council housing.

His achievements included overseeing the delivery of housing stock transfer in Bradford and he has combined the roles with the Chairmanships of the Bradford Local Strategic Partnership and the Yorkshire and Humber Housing and Regeneration Board, so on the surface at least he does have some background and hopefully understanding of the UK Housing situation and what steps to take next.

On the other side of the coin however, his past voting history does leave me with a rather highly raised Sean Connery eye brow...

He was strongly FOR the increase in VAT rate

He was Strongly FOR EU Integration

He was strongly FOR University fees

This makes me wonder is we are going to see a strong push in a financial directing for Housing and the PRS? Will this mean more cost, more fees and more debt?..... We can only wait and see......

 To Buy or To Rent.... That is the question 

May 2013 saw property transactions rise to 89,050 up from 75,350 the previous May, a increase of 137,000.

These figures would make us believe that buying a house is getting easier and the property market is on the up, but is it?

These figures don't tell us who is buying these properties and with wage increases still very weak compared to inflation and house price growth coupled with record low interest rates keeping borrowing low, it would be easy to think FTBs were back in the running, however with lending criteria stricker than ever and the average house price five times the average wage as well as 20pc+ deposits needed, it could be fair to say that FTBs are still no closer to getting on the property ladder.

The buy-to-let market on the other hand is on the increase this is the first time since the 60s that more people have been in private rentals than living in local authority housing.

An estimated 17pc of UK households are now in Private rental accommodation that's approx 8million people with almost 1/2 of these renters over 35 and a 3rd with children.

So is buying really still the dream we all aspire to? The UK as a whole has a culture of owning your own home, however just across the water France and Germany have an opposite mindset where renting is the norm seeing the average tenancy signed for 5yrs+, so is renting the way forward for the next UK generation? Let's weight up the options.

Buying

Owning your own home can offer stability as most people stay in a property for many years, but this option also offers less flexibility should your circumstances change, redundancy is a reality for everyone and should the worst happen, you could be stuck with a house on the market and increasing mortgage arrears.

On the flip side, should you need a few extra ££s each month, as a home owner you can rent out a spareroom to a lodger, something tenants in a rental property would not be allowed to do.

Then there's the costs, your home will need regular maintenance and of course the dreaded unforeseen problems such as a broken down washing machine or even a new boiler, all expenses that you may not have budgeted for but will need to be covered.

Owning your own home does offer investment for the future depending on the type of mortgage you have and as long as house prices stick or grow, you can also relax and live in your home how you wish, you can decorate,put up pictures and even have a family pet, in most cases tenants are tied to tight restrictions in these areas.

Finally, but by no means the end of the pros and cons, is the cost, FTBs will be faced with a big initial outlay including deposit, mortgage fee, surveys, stamp duty (house prices £125k and over) and not forgetting the estate agents cut.

Renting

Renting is no longer frowned upon as a 'poor' option as it may have been in the past, with the number of landlords increasing the availability of good quality affordable homes is changing the view of renting and giving young professionals and families the homes they currently wouldn't be able to get a mortgage for.

Renting offers many options including trying a new area for a few months before committing to buy there, flexibility and freedom to move around with work or to upsize or downsize as needed.

The finances stack up in rentals favour too, the initial outlay is minimal compared to buying, a 6week deposit, 1st months rent and agent fees is all a renter needs to budget for. But renting means you don't have the property at the end and money that could have been paid towards your mortgage is actually paying someone else's.

But as a tenant you save on the maintenance costs, broken appliances and general repairs are a cost that would fall to your landlord not you and the set amount of rent being paid each month will make it easy to budget and put away savings that you know won't be 'dipped into' by unforeseen expenses.

More and more people are renting so is it really better to rent or buy? The page is still unwritten for that chapter

To charge or not to charge...

This morning the media is once again awash with reports of Letting agents 'ripping off' tenants by charging high fees to create a tenancy.

On BBC radio 4 this morning Shelter stated that they believe letting agents should not charge tenants anything other than rent and deposit as they landlord is already paying for the same service.

I sit on two fences here, 1 as a letting agent and 2 as a a tenant, so I see this from 3 angles, as  a business, as tenant and I also see my landlords point of view on this too.

Firstly, to correct Shelters comments, the tenant and the landlord do not pay for the same service, the landlord is my client and paying me for my service, this includes, ensuring the property is fit to rent out (you'd be surprised what some landlords will try and rent) 

Advise on the correct and achievable rental value (not necessarily what the landlord thinks its worth) 

Inform the landlord of his legal obligations and ensure all the legal inspections are done, Gas cert, EPC, electrical test(although not a legal requirement it is strongly recommended)

Then we advertise the property and with the extremly high costs of the property portals as well as local papers this in itself can eat into any landlords budget.

This list obviously is not exhausted but it gives an idea. Now with all this in mind we have to do all this and more for a fee that both us as a business and the landlord as the client is happy with.

On the flipside, as a tenant I'm afraid there are a few costs involved there, the landlord does not pay for you to be referenced, if he did just think how many applicants he may have to pay for. 

So this cost falls to the potential tenants, this shows that someone is serious about renting the property, now the cost for this should not break the bank, at the risk of putting my head above the parapit here, a good full reference will cost an agent between £20-£30 per tenant, so with a profit in mind, I can not see why any agent could charge a tenant over £100? 

The issue we have is an increase in people needing to rent and an increase in agents who know full well that there is nothing stopping them setting their own prices.

We do not need to follow in Scotlands' footsteps and abolish tenants fees altogether because all this will do is increase the cost to landlords, who in turn will cover these costs by increasing rents.

All we need to do is set the bar on reasonable fees and unlike all other legislation which comes in and slips under the public radar, the government needs to ensure there is a full media campaign to make sure the people that matter, the public are aware of what they should be expecting to be charged by a letting agent.

Rogue agents targeted by BBC Watchdog

Letting agents once again came under fire tonight this time in the spotlight of BBC1’s Watchdog, which highlighted a more high profile case than normal, that of the actor Nigel Havers who found himself a victim of a Manchester letting agents, who made him pay 6 months money up front then promptly told him at month 5 his landlord had sold his flat and he had to move out.

Now you and me both know that this practice goes on and we know that is it not legal nor is it ethical, but if tenants are not aware of their rights and do not know where to turn for advice, stories like this will continue to make media headlines.

The piece emphasised that even though Estate agents are legally required to be a member of a redress scheme since 2008, letting agents to date still do not have to be a member of any governing body nor do they need to belong to any ombudsman, although it is recommended.

The piece went onto show how some agents ‘top up’ their income by forcing tenants to use the agents energy supplier, writing terms into the tenancy agreement that would have tenants believe they have no right to change supplier and find the best tariff for their usage.

More worrying is that the agents named and shamed in the story were not dodgy backstreet agents, they were High street leading names, who should be monitored by the bodies that claim to be at the height of regulating the agents that pay to join them

I find it mind boggling and extremely frustrating that the powers that be still allow this to happen, even after hundreds of thousands of tenants and landlords alike are ripped off or conned daily by rogue agents, yet ministers still drag their heels umming and ahhing as to whether it’s a good idea.

The irony of this watchdog article is that it was aired during SafeAgent week…. Something that is highly publicised within the industry yet the people that it needs to reach, the general public, remain totally unaware of its existence or what it stands for.

Landlords to be fined for housing illegal immigrants

Earlier today the Queens speech will take place in Parliament, part of this speech will focus on the Immigration Bill which the coalition government hopes will reduce the number of illegal immigrants entering the country, however in true Cameron style he has decided to pass the buck to anyone and everyone following repeated failures of UK Border Control.

Landlords have been targeted once again in the fight against immigration with rulings coming into force today that see landlords being made fully responsible for checking the immigration status of potential tenants, including verifying passports and immigration visas.

The first foreseeable problem here is that most of the 2million buy-to-let landlord in the UK would not know what a forged passport or visa would look like, secondly if copies of these documents are taken by landlords are they then expected to registered under one of the data protection schemes and be legally obliged to keep documents for 6 years.

With the bill threatening hefty fines, running into thousands of pounds for landlord who fail to check immigration status, the big question will be who is to blame if tenants documents turn out to he forged. If a landlord uses an agent to find a tenant will the onus then be on the agent to check immigration status and the landlords responsibility removed.

As always when the governments targets the rental sector not all the boxes are ticked before laws are passed and brought into force, the burning question has to be who and how will this new law be policed, currently there is no national register for landlord nor is there a standalone regulating body for lettings agents, so how will the government be able to check that every rental property only houses a legal occupant.

Currently the government can not even track the number of rogue agents and landlord who are not protecting deposits a law that came into force over 6 years ago and with so many immigrants entering the UK under the radar already, it seems as though Mr Cameron is doing his best to ensure he will not be to blame should this proposed regulation not work as planned, after all how can we blame a government who ensured it would be landlords responsibility to carry out the checks, most landlords are in their early years of retirement and will not be bothered with checking tenants so thoroughly.

What is needed is a national regulation of letting agents and a legal requirement to register every home for rent in the UK only then can the authorities begin to tackle the mountain of issues that trouble the sector of the industry.