Are we soon to be living in a Dickens novel?

The Guardian, recently reported on a Kent landlord who has issued eviction notices to his all his tenants currently in receipt of Housing Benefit.

The landlord has built up a property empire of over 1000 properties throughout Ashford but has become exasperated with the amount of arrears his tenants on welfare have built up.

I am not a landlord myself, but I can sympathise, landlords like this couple clearly run their properties as a business and the aim of all business is to make profit, if he is not receiving his rent and in addition paying out for court costs for evictions I can see his point, in wanting to swap his current situation for one of employed tenants with a steady monthly income.

And this landlord is not alone, increasingly I see tenants who most times through no fault of their own find themselves claiming housing benefit, but are unable to find anywhere to live because more and more private landlords are choosing employed tenants over tenants on welfare.

I’m sure some people out there may be screaming ‘DISCRIMINATION’ ‘HUMAN RIGHTS’  and yes they have a point, but, the main issue here is not the tenants themselves, it is the funds.

Local Housing Allowance (LHA) was capped, which meant anyone under 35yrs old could only get enough housing benefit to rent a room in a shared house.

And the LHA for someone over 35 renting a 1 bedroom property falls below the average private rental cost.

I found myself in exactly this position in 2012, after working all my life since the age of 15, I was made redundant in Dec 2012, I had minimal savings and rent and bills to pay.

I had to jump through hoops at the council office just to get housing benefit, which was then delayed in being paid to me for 10 weeks because of a ‘backlog’

During this 10 week period my rent was due and went unpaid, may landlord, not a happy bunny, but luckily because I had previously always paid early, allowed me the time while my payment was processed.

Once it came through all was well, except my 4 weekly payment was less than the rent I owed monthly, so I had to top up my rent from the money I received for Job Seekers allowance.

Not ideal as this had a knock on effect to the rest of my out goings, I was lucky in some respects that it was just me, no partner, no kids to feed, but I can see how people can find themselves in piles of debt being on benefits.

But where does this leave the tenants who are on housing benefit?

In short – HOMELESS

Local councils have a catch 22 policy, they will not house tenants who are in rent arrears, yet 9 times out of 10 it is the councils error in payments that have caused the arrears in the first place.

Councils will also not downsize a tenant who is in arrears, so a tenant who can’t afford to keep a 3 bed property and is building up arrears, will not be moved with their debt, to a smaller property with a lesser rent to help them pay off the arrears and manage their rent, because they are in arrears.

Something needs to change with the way benefits are paid, as soon, otherwise we will soon see hundreds of families living on the streets because there is literally nowhere for them to live.

The UK will again look like a scene from a Dickens novel with the poor begging in doorways, urchin children running around the streets with dirty faces, while the rich live in their warm houses.

A frightening but very real vision.

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