The Government launches inquiry into the Private Rented Sector

The Government has announced an inquiry into the Private Rented Sector and is inviting submissions of no more than 3,000 words by 11am on 17 January 2013.

The announcement on the Parliament website says:

The Communities and Local Government Committee has decided to conduct an inquiry into the private rented housing sector.

The Committee invites submissions from interested parties covering the quality and regulation of private rented housing, and levels of rent within the sector.  Those making submissions may wish to consider the following issues:

·         the quality of private rented housing, and steps that can be taken to ensure that all housing in the sector is of an acceptable standard;

·         levels of rent within the private rented sector – including the possibility of rent control and the interaction between housing benefit and rents;

·         regulation of landlords, and steps that can be taken to deal with rogue landlords;

·         regulation of letting agents, including agents’ fees and charges;

·         the regulation of houses in multiple occupation (HMOs), including the operation of discretionary licensing schemes imposed by a local authority for a category of HMO in its area;

·         tenancy agreements and length and security of tenure; and

·         how local authorities are discharging their homelessness duty by being able to place homeless households in private sector housing.

In its recent report on the Financing of New Housing Supply, the Committee considered the supply of housing across all tenures; it does not therefore propose to focus in particular on supply in this inquiry.

NetRent strongly urges all landlords and letting agents to make their views known to the Communities and Local Government Committee. In our opinion it is vital that as many landlords and agents as possible contribute to this inquiry.

In particular the Committee is clearly wishing to look at the regulation of landlords. There are already over 80 pieces of legislation that affect landlords, do we really need more? Or is the industry being set up for mandatory landlord registration and licensing?

For further information, including details of how to make asubmission to the Committee please click here.

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First local authority hits landlord with Proceeds of Crime Act

A Norwich landlord has been ordered to pay £40,000 under the Proceeds of Crime Act (POCA) after pleading guilty to nine breaches of Houses in Multiple Occupation (HMO) regulations.

Norwich City Council, which brought the prosecution, has become the first local authority in the country to use POCA against a landlord who failed to comply with license conditions.

Joseph Howman let a house on Unthank Road as ten bedsits with shared bathrooms that posed a number of hazards to its tenants, Norwich Magistrates' Court heard last Friday.

In November 2010, Norwich City Council inspection officers who called on the property found that rooms had no heating, the main bathroom had no hot water, the communal bathrooms were dirty, the fire doors were in poor condition with many not working, and there were electrical hazards, including hanging wires and defective lighting.

On top of the POCA costs, Mr Howman, of Grosenvor Road, was fined £5,000 plus £135 victim surcharge and £8,500 costs, which brought his total bill to £53,500.

The £40,000 POCA bill will be divided up between various bodies. The money goes firstly to the Treasury, which keeps 50% of it. Of the remaining 50%, 12.5% goes to the courts to cover admin fees with the remaining 37.5% being split 50/50 between the investigating and the prosecuting authorities. In this case, Norwich City Council was both the investigating and the prosecuting authority so will receive the whole 37.5% (£15,000).

This is known as the Home Office Incentivisation Scheme, and is designed to encourage law enforcement agencies and local authorities to bring proceedings under the POCA.

Ellen Spencer, private sector housing officer, said: "Norwich City Council is committed to making sure private tenants live in safe houses which meet legal standards. In this case the landlord risked the safety of tenants by cutting corners and refusing to make improvements.

"We are pleased that the court recognised the serious nature of the offences and hope that this will send out a message that rogue landlords will not be tolerated in Norwich."

Click here to read the original article First local authority hits landlord with Proceeds of Crime Act

Rents increase to new record high of £741 per month

The cost of renting a home has risen for the sixth month in a row to a new record high of £741 a month.

The new data for September released by LSL Property Services reveals a further 1.1 per cent increase in the cost of renting in England and Wales.

This means there has been a 3.2 per cent increase in the past 12 months.

LSL said that the increases were due to increased demand as first-time buyers are finding it increasingly difficult to get their foot on the property ladder.

It is expected that the Bank of England’s Funding for Lending Scheme (FLS) will help to increase the availability of mortgages for first-time buyers through cheaper mortgages that require a smaller deposit.

David Brown, commercial director of LSL Property Services, said: “Rents have risen consecutively for half a year as tenant demand strengthens on the back of a historically subdued mortgage market.

“However, every pound monthly rents go up by is another pound that renters can’t save for a deposit for their first home. This is lengthening their stay in rented accommodation, and increasing competition in the private rented sector.”

Extra demand has come from graduates looking to rent accommodation after securing new jobs.

Rents increased across seven different regions. London and the south-east saw the biggest increases of 1.9 per cent and 1.7 per cent respectively.

These two regions have seen annual increases of 6.2 per cent and four per cent. The average rental cost in London is now £1,092 per month.

Only three regions saw the cost of renting fall in September. They were the East of England, Yorkshire & the Humber and the West Midlands.

Click here to read the original article Rents increase to new record high of £741 per month

Rise in rent arrears leads to increase in landlord possessions

Landlord possession claims in England and Wales are rising as rent arrears increase to their highest level in four years, it is claimed.

In the second quarter of 2012, there were 25,422 landlord possession claims that led to an order being made on the seasonally adjusted basis. This is slightly higher than in the first quarter of 2012 and continues the upward trend since 2010, according to the government’s quarterly Court statistics.

Landlord possession claims leading to orders made in England and Wales are up by 8% year on year to the end of the second quarter of 2012.
Areas with particularly big rises include Gloucestershire up by 29%, West Sussex up by 20%, and Hampshire up by 29%. Some towns have also seen big rises such as Bournemouth up 30% and Croydon up by 28%.

The rate of growth in the number of tenants in severe arrears is slowing, but nevertheless rose by 1.6% in the third quarter of this year. There are now 99,000 tenants in arrears of two months or more, the highest since 2008 and 15% more than last year, according to figures from Templeton LPA, a specialist practice of LPA Receivers and part of LSL.

Tenants in severe arrears represent 2.5% of tenancies in England and Wales. Although severe arrears cases climbed steadily last quarter, overall tenant arrears fell slightly in August, with 9% of all rent late or unpaid, the first improvement in this measure in three months.

Despite the steady growth in severe tenant arrears so far this year, there was a slight reduction in the number of tenants who faced eviction through court order on a quarterly basis.

In the second quarter of 2012, 25,422 tenants faced eviction notices, a quarterly fall of 6% compared to the previous quarter, reversing the previous 6% quarterly increase. However, evictions remain 8% higher on an annual basis.

Click here to read the whole article Rise in rent arrears leads to increase in landlord possessions

End to illegal fees in Scotland

Currently, under the Rent (Scotland Act) 1984, landlords and their agents can legally charge rent and a deposit only when granting a tenancy.

However, current legislation has not been explicit enough about additional charges such as reference checks, credit checks and inventory fees.

The law will now be clarified so that all tenant charges, other than rent and a refundable deposit, will be deemed illegal. These will come into effect in November.

Gordon MacRae, Head of Communications and Policy at Shelter Scotland said:

“This is great news for everyone who has been ripped-off by unscrupulous letting agents. It will finally put an end to this unlawful practice and ensure that tenants are no longer exploited.

“Shelter Scotland has been campaigning all year for these fees to be outlawed. Our reclaimyourfees.com web site has proved so popular that already more than £100,000 worth of claims against letting agents have been made using our free step-by-step toolkit.”

Click here to read the Scottish Government’s An end toillegal charges on tenants

Click here to visit the Shelter Scotland website ReclaimYour Fees

NetRent Comment

There is no doubt that some landlords and agents charge excessive fees to set up a tenancy, but there is a cost to set up a tenancy including reference checks, credit checks, inventories etc. If landlords and agents are not able to make a charge for these then rents will rise to cover the cost of setting up a tenancy.

Landlords and agents in England and Wales are not affected by this decision, only Scottish tenancies are affected. However, there is growing demand for Parliament and the Welsh Government to follow suit and ban additional charges. This demand will continue to grow if landlords and agents charge unreasonable costs to set up a tenancy.

We strongly advise all landlords and agents to join TenantVet, the free online tenant referencing service, including all Scottish landlords and agents.

Click here to visit TenantVet.

Thousands of tenants lives threatened by rogue landlords

The lives of thousands of tenants are being put at risk by England's rogue landlords, a report has revealed.

Councils received 85,000 complaints against landlords last year, 62% of which concerned serious and life-threatening hazards.

The research by homeless charity Shelter shows that landlord complaints have risen by almost 30% in the last three years.

There were 487 successful prosecutions against private landlords last year, an increase of 77%.

Shelter is now urging people to contact their council and demand that they stamp out rogue landlords.

Campbell Robb, Shelter’s Chief Executive, said: "Despite the significant increase in complaints, we believe that the number of rogue landlords is still underestimated – some local authorities don’t keep records of complaints and tenants often hold back from complaining out of fear of the consequences or because they don’t believe their voices will be heard, even though such a high proportion of complaints are about life-threatening issues."

Jack Dromey MP, Labour’s Shadow Housing Minister, responding to the report, said: “These shocking statistics highlight the growing abuse tenants face from rogue landlords in the private rented sector. It is absolutely wrong that tenants have no protections against rogue landlords who make their lives a misery.

"These figures should be a wake-up call to the government and the new Housing Minister, Mark Prisk. They should change course and implement those protections rolled back by his predecessor."
Click here to read the original article.

NetRent Comment

We support the drive to remove rogue landlords from the lettings industry but Shelter and Jack Dromey need to get some perspective. 85,0000 complaints represents less than 3.5% of the private rented sector.

Dromey claims that 'tenants have no protection against rogue landlords' clearly forgetting that his party was in power for 13 years and commissioned the Rugg Report which it then chose to almost completely ignore.

Councils have over 80 pieces of legislation which they can use to target 'rogue landlords' with Mr Dromey, hardly no protection.

And nowhere in either Shelter's report or Mr Dromey's statement is there any mention of the damage that some tenants do to landlord's property. Nowhere in Shelter's report or Mr Dromey's statement is there any mention of the increasing number of tenants who default on their rent.

What this report amounts to is a one sided attack on the lettings industry with cheap headline grabbing sound bites about 'rogue landlords'.

Landlords enjoy another monthly rise in rental values

While the home-buying market remains largely stagnant, those with an investment in rental property continue to reap the rewards.

According to research from LSL Property Services, the typical rent paid in England and Wales rose for the fifth consecutive month in August, increasing by 2.9 per cent to reach £734 per month.

Demand for rental accommodation across the country is strong, with little movement in house prices and potential buyers still struggling to obtain the finance they need.

London is still the strongest performer, with rents having increased 4.9 per cent year-on-year, but the east of England has also seen a 3.9 per cent rise, and other areas of the country are also seeing an increase in rents. David Newnes, director of LSL Property Services, commented: “London and the south east may be the powerhouses of the national rental market, but rent rises haven’t been limited to these areas by any means.

“In fact, rents have hit record highs in five regions as tight mortgage finance criteria and large deposit requirements for new buyers continue to ramp up the pressure on the limited stock of rental homes available.”

For landlords, the average total return for August was 5.3 per cent, a rise of 0.3 per cent and further encouragement for property investors.

However, while times are reasonably prosperous, now may be the right time for landlords to look at their outgoings, and see whether any changes can be made to reduce these and maximise returns. This could involve restructuring a buy-to-let mortgage, or shopping around for a better rate on landlord insurance. Yet agency fees should also come under consideration - and this is not just related to how much is paid for the services, but what services are provided.

Recent research from Shelter recently indicated that a quarter of tenants feel “ripped off” by the high fees charged by some letting agents, with some asking for more than £500 in ‘administration costs’.

Yet landlords are also being overcharged, Shelter claims, with some unscrupulous agencies charging both landlords and tenants for the same administration.

Kay Boycott, director of campaigns, policy and communications at Shelter, said: “It’s scandalous that some letting agents are creaming off huge profits from the boom in private renting by charging both tenants and landlords fees that are totally out of proportion to the service they provide.”

Click here to view the original article Landlords enjoy another monthly rise in rental values

Landlord hit with £1.4m fine after planning permission failure

A North London landlord has been fined a record £1.4 million for turning a house into 12 flats without planning permission, reported the Brent and Kilburn Times.

The fine was issued after Salah Ali illegally converted a property on Willesden Lane into 21 separate flats despite not having planning permission to do so.

Mr Ali has been ordered to pay a total of £1.438 million within six months or face being sent to jail for 10 years, Norwich Crown Court Heard.

The London Borough of Brent have described that order, made using powers available to local authorities to recover the proceeds of crime, is believed to be the highest ever confiscation order granted for a planning offence anywhere in the UK.

Having reportedly ignored planning laws for the last 10 years, the fine represents rent Mr Ali has received from the tenants in the house.

The landlord was also ordered to pay a fine of £4,000 for a breach of planning regulations, as well as facing legal costs of almost £35,000, following a two-year investigation by the council.

A restraint order has also been placed on Mr Ali to prevent him from disposing of his assets before fulfilling his obligations to pay the £1.438 million fine levied against him.

The local authority, Brent council, will receive 37.5 per cent of the money once obtained, with the rest going to the Treasury and the court collection agency.

The news comes in light of the title’s report into the council’s proposed clampdown on landlords who housed tenants in illegal extensions, known as ‘Beds in Sheds’.

Chris Walker, Assistant Director of planning and major projects at Brent Council, told the Times: “This landlord ignored planning rules designed to ensure that the quality of accommodation in the boroughs is maintained and that the environment for surrounding residents is protected.

“He ignored the council’s notices and as a result, he profited hugely from this sub-standard accommodation.”

Click here to read the article Landlord hit with £1.4m fine after planning permission failure