The government’s decision to invest an additional £4m in funding for local councils to tackle criminal landlords and letting agents has been warmly welcomed by The Guild of Property Professionals.
The housing secretary, Robert Jenrick, announced on Friday that he has pledged new funding to be used to clamp down on rogue landlords, with the money set to be shared between more than 100 councils across England
He commented: “Councils already have strong powers to force landlords to make necessary improvements to a property through the use of a range of measures, including civil penalties and banning orders for the worst offenders.
“The grants will support a range of projects to enable councils to make the best use of these powers. This will include trialling innovative ideas, sharing best practice and targeted enforcement where we know landlords shirk their responsibilities.”
There are more than 4.5 million households in the private rented sector in England, with recent statistics showing that 82% of private renters are satisfied with their accommodation, which although impressive, does suggest that there is room for improvement
The Guild’s inhouse Compliance Officer, Paul Offley, said: “We fully support this initiative as it will ensure that rogue landlords and letting agents are punished for breaking the law and it will also ensure that more tenants are treated fairly.
“With the funding providing councils with a means to crack down on illegal activity in the lettings market, tenants will have more protection and the standards of the rental sector will be raised.”
“An environment where exploitative landlords are stamped out will enable good landlords and letting agents to thrive,” he added.
But the government funding to root out criminal landlords has been described by the Residential Landlords Association (RLA) as inadequate to tackle the scale of the problem.
David Smith, policy director for the RLA, said: “We welcome the government’s focus on rooting out criminal landlords. For too long the debate has been driven by ideological calls for more regulation of the sector. What is needed is better enforcement of the powers already available to tackle the minority who bring the sector into disrepute.
“The funding though is nowhere near enough. Instead of offering inadequate and sporadic pots of money, it is critical that the government provides proper, multi-year funding to enable councils to plan and prepare workable strategies to find the criminal landlords. This should be supported by councils having the political will to prioritise enforcement against the crooks rather than tying good landlords up in licensing schemes which do nothing to protect tenants.”
Greater confidence and more certainty in the housing market following last month’s Tory election victory looks set to boost the housing market and unleash pent-up buyer demand from property buyers, including buy-to-let investors, in the early part of 2020, analysts predict.
But Anton Frost, a partner at Carter Jonas letting agents, believes that continued political uncertainties, in particular, the deadline for Brexit rade talks at the end of the year, will keep a lid on activity levels in the housing market, including the buy-to-let sector.
He said: “2020 may begin with a new government but the familiar uncertainty over our departure from the EU will remain, and there is no doubt that this year will see the lettings market continuing to navigate through what has been a turbulent period.”
Frost, like many letting specialist, is concerned that tax and regulatory changes will dampen landlords’ appetites to invest and expand their property portfolios, with many consolidating their assets, or opting to flee the sector altogether.
Frost commented: “Policy changes and financial pressures on landlords has left many concerned that their investments are no longer viable. We’ve already seen the tenant fee ban and continuation of tax relief changes deter investors from the market in 2019, and this may well continue into 2020.
“With less stock comes increased competition and higher rents, and without legislative changes that can stabilise the landlord market, the tenant struggle for the right home at an affordable price may go unchanged.
“That said, no matter what picture the political landscape paints, people need to move and there has and always be a healthy level of activity in the rental market. Yield potential and tenant affordability are problems that remain paramount, but the market will always be transactional.
“Landlords are dubious about what 2020 holds, but clarity over if, how and when Britain leaves the EU should see an overall sense of stability return to the market, which can only be a positive thing.”
There are tentative signs that landlords are beginning to return to the buy-to-let market, particularly in London where house price falls and steady rental growth are gradually enticing investors back, according to Knight Frank.
The company reports that during the first 11 months of 2019, landlords acquired 11% of homes sold in Great Britain, the same level as 2018. But in November alone, the proportion of homes bought by investors increased to 12%.
London recorded a bigger rise in landlord purchases. Landlords purchased 13% of homes sold in the capital during the first 11 months of 2019, up from 11% during the same period of 2018. This was the first rise since 2015 but is in part due to fewer owner-occupiers transacting in the market. But will this trend continue?
The latest UK Finance mortgage data published this week suggests that property purchase and remortgage approvals in November held up relatively well given that the country was in full general election mode.
Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco, said: “For a lot of British households, November was a classic case of better the devil you know.
“They chose to get their houses in order and secure a mortgage before a potentially disruptive election result.
“In the week following the general election result we saw a slight uplift in enquiries but the buyer spirit was largely trumped by the Christmas spirit.
“January will be the real test of consumer sentiment as we approach our departure from the EU.
“There is still much uncertainty as to the intricacies of how we leave the EU, but people at least now know it’s coming and that creates confidence.”
The figures also reveal that there were 16,200 remortgages in the buy-to-let sector in October, 2.4% fewer than the same month in 2018.
Montlake added: “While we are expecting an uplift in transactions and remortgages, it would be premature to assume that 2020 will be a boom year for the property and mortgage markets.
“As negotiations with Brussels unfold there is still the potential for volatility.”
Under-resourced county courts are struggling to cope with the number of possession claims being put forward, ‘causing misery for landlords’ not to mention costly delays, according to Landlord Action.
The vast majority of residential possession claims are dealt with in the county courts and enforced by county court bailiffs. But government spending cuts, an increasing number of possession cases, court delays and administrative errors mean evictions are taking longer than ever, pushing many landlords into debt.
In a recent Section 21 case handled by Landlord Action, a tenant claimed she did not receive the ‘How to Rent Guide’ so the court set a hearing date of 27th June 2019. But the court postponed the hearing with just 24 hours notice because the Judge was no longer available.
Several hearing dates have since been set and cancelled, leaving Landlord Action with little choice but to chase for a new date some 12 months after the original Section 21 notice was served back in January 2019, and the landlord no closer to gaining possession.
“We are experiencing cases like this time and time again” said Paul Shamplina. “It’s not only causing extra work for us at Landlord Action, meaning we now have a full-time member of staff whose main responsibility is chasing courts for updates on possession orders, Notice of Issues and bailiff appointments, it is also causing extreme stress for the landlords who are already facing financial hardship as a result of rent arrears.”
Landlord Action is now calling on the government to increase investment in the court system before pressing ahead with plans to scrap Section 21 of the Housing Act, as part of the new Renters’ Reform Bill.
Shamplina continued: “The situation is the worst I have experienced in my 28 years in this industry. Cases are being overlooked, delayed or thrown out due to administrative errors and there is little we can do to improve matters for landlords when we are at the mercy of the courts.
“Remember, many courts were closed due to cost saving by the Ministry of Justice (MOJ).”
An unscrupulous landlord has been fined £27,000 over an unlicensed HMO in Luton with multiple fire and safety breaches.
Luton Magistrates Court heard that the unlicensed property at 14 Kenneth Road, Luton, LU2, had poor fire alarm systems and blocked fire exits, missing and broken tiles on the roof, and evidence of rat infestation.
Marco Caruso of Verulam Court, Hendon, pleaded guilty to illegally managing a HMO and seven breaches of HMO regulation.
He was fined £27,000, which included a £170 victim surcharge and costs of £848.70.
Cllr Tom Shaw, portfolio holder for housing, commented: “This is a great result for the rogue landlord project [being operated by the council] and an excellent example of how we are working together to ensure that private housing in Luton is of a good standard.
“If an HMO is poorly managed, the tenant’s safety could be at risk.
“We are committed to identifying rogue landlords and making sure the properties they manage are in a good condition and adhere to safety regulations, or face prosecution.”
The tax return deadline when filing your online Self Assessment for the tax year ending 5 April 2019 is less than a month away.
Filing an annual tax return is a necessary task for every self-employed person, including buy-to-let landlords, with the 31 January deadline for the 2018/19 Self Assessment tax return at midnight on 31 January 2020.
Whether you have just started out as a buy-to-let landlord or you are an established property investor, there is much to consider from a financial point of view.
Around 10 million people must complete a self-assessment tax form every year, typically because they are self-employed, run their own business or have untaxed income or capital gains, such as from a buy-to-let property, a trust or investment portfolio.
There is no need to fret over filing your tax returns, as it does not even require an accountant.
However, if you are concerned about going it alone and doing your own tax return, you may wish to check out HMRC’s ‘help and support for landlords’.
For more information, click here.
HMRC also offers online tax return help for landlords to their online series of help and support webinars.
View all HMRC webinars.
A new landlord organisation, which is the largest ever trade body in the letting sector, has been officially launched.
The National Residential Landlords Association, which came into force yesterday, has a membership of more than 80,000 landlords.
The new organisation has come about after the National Landlords Association (NLA) and the Residential Landlords Association (RLA) agreed to merge in autumn, with a view to delivering a stronger voice for landlords in the private rented sector.
Ben Beadle is the NRLA’s new chief executive, having joined from Touchstone, part of the Places for People housing group. He was previously managing director of TDS Northern Ireland and director of customer service with the TDS.
The two previous chairs, Alan Ward of the RLA and Adrian Jeakings of the NLA, said in a joint statement: “After more than 20 years of friendly competition the time is right to create a single organisation to represent and campaign for landlords.
“With so much of our work done in parallel there are major benefits to be gained for our landlord members.
“We will be stronger together when presenting a unified voice to government both nationally and locally about the importance of supporting the majority of landlords who do a good job providing the homes to rent the country needs.”
A man who rented hundreds of properties that he sub-let to criminal gangs running brothels and cannabis farms has been jailed for seven years and four months.
Chinese national Feng Xu used several fake identities to secure accommodation, according to the National Crime Agency (NCA).
Feng was arrested in Birmingham in May as part of a major investigation into modern slavery and human trafficking.
He had previously admitted 22 fraud, false identity and money laundering offences at Birmingham Crown Court.
The 43-year-old was described by investigarors as a “prolific operator” and an “important enabler” for different criminal networks involved in prostitution, drug production and housing illegal immigrants.
One computer database listed 446 different addresses that Feng had been involved in renting, investigators said.
Matt Rivers, branch commander at the NCA, commented: “Using numerous false identities and false documentation he was able to supply hundreds of different properties across the UK.
“We believe that taking him out will have caused significant disruption to a number of different organised crime groups involved in sex trafficking and drug production.”
Feng, who has lived in the UK illegally for almost 20 years, will face deportation after serving his sentence.
The housing plans being put forward by Boris Johnson have been described by the National Landlords Association (NLA) as “ruinous” and likely “to lead to an exodus of responsible landlords from the private rented sector”.
The NLA fears that the government’s flagship policy to introduce legislation to end Section 21 repossessions, as announced in yesterday’s Queen’s Speech, could potentially pave the way for the mass exodus of landlords from the private rented sector in the coming years.
The association, which represents 42,000 members, cited research from Capital Economics, an independent consultancy, showing that if Section 21 is abolished without any accompanying reform of the law courts, the supply of private rented houses in England could fall by as much as 20%, with up to 960,000 fewer homes available to renters if landlords pull out of the market.
It also pointed to data showing that there would be a 59% reduction in the number of private rented dwellings available to households in receipt of local housing allowance or universal credit – 770,000 fewer residential units – because landlords would instead opt to rent to people more able to demonstrate a track-record of making regular payments and a steady income.
Richard Lambert, CEO of the NLA, commented: “Landlords need certainty of their ability to end failing tenancies. If this cannot be provided by Section 21 then the Government must reform the courts. Strengthening landlords’ rights will make no difference if the court process is seen as simply delaying or obstructing possession.
“The NLA is deeply concerned that the Government will precipitate a housing emergency, deepening the crisis of supply and affordability faced by many households. Landlords will stop letting to tenants who are perceived as higher risk and ultimately sell properties which would otherwise provide much needed homes for those who cannot afford to buy.
“If ministers do not address the problems of capacity within the Courts Service before removing landlords’ ability to use the no-fault procedure, the dramatic increase in cases that will be brought before it will bring the system to its knees.”
The Queen has announced the new government’s priorities for its coming term, and it includes a proposal to abolish Section 21 of the Housing Act and reforming the grounds for possession, as part of a new Renters’ Reform Bill, designed to “introduce a package of reforms to deliver a fairer and more effective rental market”.
But in the absence of any meaningful plan to boost the level of social housing in this country, the announcement confirming the abolition of Section 21 in yesterday’s Queens speech has been described by ARLA Propertymark as “another attack against the landlords who actually house the nation”.
The trade body’s chief executive, David Cox, said: “If Section 21 is scrapped, Section 8 must be reformed and a new specialist housing tribunal created. Without this, supply will almost certainly fall which will have the consequential effect of raising rents and will further discourage new landlords from investing in the sector.
“ARLA Propertymark will be engaging with the government to ensure they fully understand the consequences of any changes, and we will be scrutinising the legislation, to ensure landlords have the ability to regain their properties if needed.”
The government also plans to introduce a new scheme to permit tenants to transfer their tenancy deposits when they move properties.
The new Lifetime Deposit scheme will permit renters to transfer their deposit from one property to another instead of being left out of pocket for weeks while they wait to be reimbursed from their old landlord but have to spend money securing their new property.
However, landlords will also be given strengthened powers to regain possession of their property under the new proposed Bill, while the expansion of the database of rogue landlords is also included in the legislation to be introduced in Parliament.
But the Residential Landlords Association (RLA) has also warned of a rental crisis that could lead to a mass sell-off of properties following the announcement Section 21 will be scrapped.
The organisation is calling on the government to develop a dedicated housing court to ensure that there is easily accessible and swift justice available where there are conflicts between landlords and tenants.
David Smith, RLA policy director, commented: “We accept the need to protect tenants from abuse, but it is crucial that plans to reform the way repossessions can take place are got right if the government is to avoid a rental housing crisis.
“Unless the new system is fair to good landlords as well as tenants, those same landlords who we need to support simply will not have the confidence to provide the rented homes that are needed to meet the demand.”