Year: 2020

Increasing numbers of landlords are being forced to issue a second Section 8 notice to tenants who have stopped paying their rent as the sector grapples with the ‘crazy’ evictions rules in place now, it has been claimed.

The UK’s leading lettings industry trade body ARLA Propertymark says the Covid eviction rules which require landlords to give six months’ notice of their intention to evict are now forcing many to issue a second Section 8 notice when their tenants fall more than six months’ behind in their rent.

“We’re looking at situations now where the clients have served a six-month notice initially, when the rent arrears are quite small, but when we get to that six months [of arrears] mark, we might be serving another notice because…of the shorter period [of four weeks’ notice],” Robert Bolwell (left), Senior Partner at Dutton Gregory, which manages the ARLA Propertymark Legal Helpline, told a Goodlord webinar yesterday.

“The general rule is, it’s never wrong to serve additional notices.”

Paul Shamplina of leading evictions firm Landlord Action, agrees: “We are already serving additional Section 8 notices for landlords.

“Our team is dealing with clients who have four months’ rent arrears, telling us that they are hoping the tenant does not pay the next two months, so they can serve the four week notice period; it’s crazy.

“You will get tenants catching on to the new time frame periods who will make small payments to keep the arrears to under six months, so the landlord can’t serve a four week notice period.

“It’s going to be really tough on landlords, the reality is landlords are very unlikely to be able to re-coup the lost arrears.”

Blog Post from Landlord Zone

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It is thought likely that the new four week lockdown in England coming into effect on Thursday will mean evictions will be extremely difficult to enforce for some months.

Although the eviction ban actually ended several weeks ago, it was agreed last week that tenants living in areas under the old Tier 2 and Tier 3 Covid-19 restrictions in England and Wales were temporarily protected from eviction.

The government asked bailiffs not to enforce court possession orders in areas with the highest Coronavirus restrictions. So although evictions could still proceed through the courts, bailiffs will not enforce court orders in Tier 2 and 3 areas.

Bailiff trade bodies agreed to the request made in a letter from Justice Secretary Robert Buckland who wrote: “We would request that your members should instruct the enforcement agents working under their authorisation not to enter properties that are classified as local alert level 2 (high) or 3 (very high).”

With the new lockdown in England lasting from November 5 to December 2 – at least – it is thought that the bailiffs’ decisions not to enforce evictions in high-restriction areas will be extended across England.

The government has already said that enforcement action will also be paused over Christmas – specifically between December 11 and January11 – except in ‘the most serious circumstances’, such as cases involving antisocial behaviour or domestic abuse.

It is thought likely that courts in England will still sit during the imminent lockdown and they are prioritising eviction cases involving anti-social behaviour, crime and extreme rental arrears.

However, practical enforcement for any eviction agreed appears likely to be on hold until mid-January.

On top of all that, agents acting for landlords in England and Wales must now give six months’ notice to tenants before starting eviction proceedings, apart from in the most extreme circumstances.

These include where tenants are proven to have demonstrated anti-social behaviour, committed fraud or if they are more than six months in arrears with their rent payments. The six-month minimum notice period was introduced by the government in September and will remain in place until at least March 31 next year.

Meanwhile analysis by consumer group Which? has shown that in Scotland, landlords must give tenants six months’ notice in most circumstances. If the landlord or their family wants to move in or the landlord has had their registration revoked, the notice period is three months.

If the tenant has a criminal conviction, has engaged in antisocial behaviour or has moved out, only 28 days’ notice is required.

And in Northern Ireland, private landlords must give 12 weeks’ notice to evict tenants, and have been encouraged to not issue eviction notices unless it is ‘absolutely unavoidable’.

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Reading the housing news, I see several local councils are proposing to introduce more selective licensing schemes (SLS).

My eyes rolled when I saw that.

Over the years I’ve had a number of properties which have been subject to such schemes. Stamping out anti-social behaviour and improving the quality of local housing stock were their main objectives, they claimed.

Signing away several thousands of pounds (the cost of each council varies, but it’s usually around the five-hundred-pound mark with the scheme lasting up to five years), I queried the council on their Key Performance Indicators (KPIs) and how they would judge the scheme was a success.

Having been on three different schemes now, I can tell you not one council has ever come back to me with those results. Not one council has ever shown me how the schemes work.

Out of the schemes I’ve been on, one ended a couple of years ago. That scheme got 66% of landlords to sign up. That means 34% of landlords did not sign up.

Property standards

What, I asked, were they going to do about this? Surely those who didn’t sign up were the ones to worry about? If a license was required to rent out a property and almost a third were still unlicensed (and to my knowledge, unchecked), how would this improve property standards – one of the main tenets of the scheme?

I never got a decent reply, they told me they were looking into it. After several enquiries over the course of a couple of years, I gave up.

A bit like when I asked what improvements did they get from the introduction of the scheme and how they felt they met their KPIs?

Silence. Stonewalled.

And so when I read yet more councils are planning to introduce SLS, I can’t help but wonder maybe other people have different experiences? Perhaps other councils are doing it better?

Basic information

So I made a point of speaking to other landlords about their experiences. Most of them signed up, sent money and then after a few weeks got a license in the post. Many were not even asked to provide the most basic property information – the latest gas safety check!

How then can a council deem a property is of an acceptable standard when they haven’t even got the CP12 on file? How can councils claim they are ‘improving standards’ when most are not visiting a property, let alone requesting basic information?

I try to be a good landlord and I’m happy to engage with local councils about improving areas and housing standards, but to me these schemes appear to be based upon a presumption that ‘something should be done’ rather than asking: what needs to be done?

Any future SLS, if it is to be successful, needs to be transparent, accountable and clear about KPIs, willing to publicly share information and engage with private sector landlords.

Blog Post from Landlord Zone

See details of our Guaranteed Rent Scheme here

Landlords are justified in their calls for a rent arrears loan scheme in England as research shows that confidence within the sector is plummeting, it has been claimed.

A survey of over 2,000 landlords by the NRLA has revealed that two thirds believe they face a tougher operating environment as the economic affects of Covid hits the private rental sector, with 18% saying this was likely to be severe.

Consequently, 56% said they were less confident about the future compared to three months ago, particularly when it came to achieving their goals.

And 30% now say they want to sell one or more of their properties compared to 16% who expect to expand their portfolios.

Rent arrears

Given the mounting financial pressure on both tenants and landlords alike, the NRLA has once again said Ministers should follow their Welsh and Scottish counterparts and introduce low-interest loans for the most vulnerable tenants, paid direct to their landlord, to help them repay significant rent arrears.

The NRLA’s says 78 per cent of landlords would support such a scheme and one of the UK’s leading housing campaigners Lord Best has said the cost would be negligible to the government.

Ben Beadle, Chief Executive of the NRLA says: “Providing the financial support needed to help tenants pay off rent arrears built since lockdown started would cost the government less than the Eat Out to Help Out scheme.

“As we head into more local lockdowns, it is even more important that tenants don’t have to worry about meeting their rent bill.”

Blog Post from Landlord Zone

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A top property lawyer says a recent decision by bailiffs not to forcibly evict anyone in Tier 2 and Tier 3 is an eviction ban by the back door.

At the end of last week the government asked bailiffs not to enforce court possession orders in areas with the highest Coronavirus restrictions. So although evictions can still proceed through the courts, bailiffs will not enforce court orders in Tier 2 and 3 areas.

Bailiff trade bodies agreed to the request made in a letter from Justice Secretary Robert Buckland who wrote: “We would request that your members should instruct the enforcement agents working under their authorisation not to enter properties that are classified as local alert level 2 (high) or 3 (very high).”

Now David Smith, partner at JMW Solicitors, has hit out at the move.

“Naturally, evictions create hardship for those being evicted, probably more so right now. However, leaving tenants with huge arrears in place also creates hardship as the debt will follow them” he says.

“The problem with the government’s approach is that it is almost certainly unlawful. It is not open to bailiffs or High Court Sheriffs to simply decline to enforce warrants and writs, even if the Lord Chancellor asks them to do so.

“They have a duty to do this. Indeed, there is a power to complain to the County Court, in the County Courts Act, about losses resulting from Bailiffs not enforcing warrants.

“This approach flies in the face of the new structures created around the re-opening of the courts for possession.

“Of course the government can prevent evictions if it wishes to. But it should do so lawfully by making regulations under the appropriate legislation and allowing Parliament to review them, not through backdoor letters to enforcement bodies. I have offered to seek judicial review on this on a ‘no win, no fee’ basis for affected landlords.”

Blog Post from Letting Agent Today

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Bailiffs are unable to execute warrants for possession in areas affected by Tier 2 and Tier 3 restrictions.

A letter was sent to bailiffs from the Lord Chancellor asking them not to enter properties to evict where these restrictions are in place or during the Government’s so-called ‘Christmas truce’ from December 11 – January 11.

The news comes as a blow to landlords already granted orders, particularly those with tenants who have built up significant arrears pre-Covid or who have been making lives a misery through their anti-social behaviour.

Landlords currently progressing through the court system will still be able to obtain a possession order and warrant for possession, but will be unable to have that warrant executed by a bailiff while Tier 2 or 3 restrictions are in place in their locality.

At the time of mailing, Merseyside, Greater Manchester, Lancashire, South Yorkshire, Warrington and Nottinghamshire were in Tier 3, with London and other major conurbations in Tier 2.

And while the Government has said it will review the restrictions every 28 days, there are no guarantees as to when they will be lifted and where, with infection rates and deaths still increasing.

A little over 1 in 10 claims which reach court result in a bailiff repossession, stoking fears  that – combined with the Christmas truce period – some evictions could be put on hold until mid-January at the earliest. The NRLA has reiterated its call for urgent financial support for landlords and tenants.

NRLA policy director Chris Norris said: “The Government needs to bring forward a comprehensive financial package that will help tenants to pay off rent arrears built as a result of the pandemic, a move which could keep many cases out of court in the first place.”

Blog Post from NRLA

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A shocking story of illegal sub-letting in central London has highlighted the problems facing many landlords as a mixture of unchecked rogue letting agents and the unintended consequences of the evictions ban continue to cause havoc.

The case has cost the landlords involved over £40,000 in lost rent and costs so far with both facing many months due process before they can take possession of their properties.

What happened?

Late last year a leading lettings agency was approached by a TV production company based in Manchester which sought two apartments in London for staff who were working temporarily in the capital. The agency wishes to remain anonymous over staff safety worries.

Properties in Pimlico and Vauxhall (at St George’s Wharf, pictured) were secured and tenancies agreed but after several months the rent stopped being paid.

The agency discovered that both apartments were being sub-let without permission to new tenants via a Knightsbridge agency called Blackstone Properties.

Despite both email and face-to-face meetings at their offices, Blackstone has so far failed to return the keys to either of the flats to the agency. The rent continues unpaid for both apartments.

Fobbed off

A spokesperson from the company says that on visiting Blackstone they were fobbed off with excuses but believes they know the law is on their side and that evicting the tenants they have sub-let to will take months.

“We managed to talk to one of the tenants and once they realised what they had become caught up in, left the property but new tenants almost immediately,” they say.

Although the evictions ban does enable illegal sub-letting cases to be prioritised ahead of most other types of evictions, rogue operators are fully aware that it will take months to get a preliminary hearing date as the courts struggle to cope with huge volumes of cases.

And until the government implements the findings of the RoPA report, rogue letting agents are free to operate in the market unchecked or policed.

Ballooning

Paul Shamplina, whose company Landlord Action has been involved in the case, says: “Since Covid has struck we’ve have been extremely busy dealing with cases like this where rogue agents have failed to pay rent to landlords and been involved in illegal sub-letting,” says Paul Shamplina.

“This kind of problem has ballooned alongside increasing levels of dodgy rent-to-rent agreements, which employ similar tactics and – like this case – lead to landlords losing tens of thousands of pounds.

“Part of the problem here is the blanket approach the government has taken to evictions during the Covid pandemic – forcing agents and landlords to give six months’ notice of possession action means rogue agents have the upper hand at the moment – they know their fraudulent activities are difficult to stop or police.

“The Government needs to look at the Guaranteed Rent and Rent to Rent industries separately within the PRS and introduce tougher enforcement through Trading Standards; it’s so easy to take the rent, not pass it onto the landlord during which the landlord loses control of their property and remains liable for enforcement of overcrowding or breaches of HMO regulations, for example.”

LandlordZONE have asked both the TV production company involved, Rami News, and Blackstone Properties, for comment.

Blog Post from Landlord Zone 

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The Government has given another strong indication that it won’t be chasing landlords for non-payment of tax.

Labour MP Charlotte Nichols quizzed the Chancellor this week on whether he planned to increase the level of tax compliance among buy-to-let landlords.

But in a written response, Jesse Norman, the financial secretary to the Treasury, would only say that the Government was committed to reducing non-compliance in the tax system among all taxpayers, including landlords.

The parliamentary exchange follows reports from think-tank TaxWatch that unscrupulous landlords are dodging £1.73 billion a year in tax.

It believes the Government’s attempts to recoup payments – including the Let Property Campaign – are failing.

In 2013 the Government estimated that up to 1.5 million landlords had underpaid or failed to pay up to half a billion pounds in tax for the 2009-2010 financial year.

£540 million
It estimates the tax gap arising from those in employment who haven’t declared and therefore not paid tax on lettings income, at £540 million for 2018-19.

But TaxWatch says at least two thirds of tenancies in England are owned by those who don’t receive pay through PAYE.

Norman said the Let Property campaign had prompted about 55,000 additional disclosures and raised an estimated £226 million.

He added that from April 2023, landlords with business or property income over £10,000 per year which are liable for income tax will need to keep digital records and use software to update HMRC quarterly through Making Tax Digital.

“It will also make it easier for landlords to get their tax right, saving time and enabling them to see, close to real time, the health of their finances,” said Norman.

A spokesperson for the National Residential Landlords Association tells LandlordZONE that it fully supports HMRC’s Let Property campaign, adding: “Those who evade the taxes they should be paying serve only to undercut responsible landlords and tarnish the reputation of the sector.”

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Research by Hamptons International shows that since the end of the spring lockdown and the reopening of the rental market, affluent areas of Britain have recovered far better than elsewhere.

While the total number of homes let between May and September 2020 fell by 5.3 per cent compared to the same period in 2019, the most affluent areas in Great Britain saw 1.3 per cent more homes let.

However the least affluent areas of the country have seen the largest drop off in rental market activity.

The number of homes let in the 10 per cent least affluent areas of Great Britain was down 14.8 per cent between May and September in comparison to the same period last year.

Similarly, the number of new instructions coming onto the rental market in these same areas was down 17.7 per cent over the same period.  Meanwhile the 20 per cent most deprived areas recorded a 11.3 per cent fall in the number of homes let.

However across the whole market, the number of lets agreed is now on an upward tradjectory.

From July onwards there have been more lets agreed than at the same time last year.  And by September the number of lets in the wealthiest areas of the country was up by over a fifth compared with September 2019.

Only areas which are part of the least affluent 10 and 20 per cent saw fewer lets agreed than at the same time last year – down 6.3 and 2.5 per cent respectively last month.

These figures in the least affluent areas declined between July and August, unlike in the more affluent areas where the number of lets continued to rise.

Aneisha Beveridge, head of research at Hamptons, says: “Over the course of the pandemic tenants are more likely to have seen their incomes hit than homeowners.  But the economic crisis has also widened divisions within the rental market.

“While the top of the rental market has flourished over the summer months, the number of renters in the least affluent areas of the country moving home remains down on the same time last year.

“Tenants living in the least affluent areas of the country are most likely to have been impacted by the economic crisis and this has made it harder for some renters to move home – typically at a time when they need to prove their income and pass referencing checks.”

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