Year: 2020

The government has published more details of how the scheme will be run and what sort of improvements the £2 billion earmarked for the initiative will pay for.

The government has finally revealed more details of its Green Homes Grant scheme, which will give landlords and home owners significant public funds to improve their properties.

Announced on 9th July by Chancellor Rishi Sunak, the £2 billion scheme will fund up to two-thirds of the cost of home improvements for some 600,000 properties with a cap of £5,000.

The Ministry of Housing, Communities and Local Government has now revealed how the scheme will work, and what sort of improvements are included within it.

It says tradespeople must register for TrustMark accreditation to take part in the scheme, which will cover green home improvements ranging from insulation of walls, floors and roofs, to the installation of low-carbon heating, like heat pumps or solar thermal.

In addition, households can use the remainder of their voucher, up to the value of the spend on the primary measure/s, for further secondary energy saving measures:

• double or triple glazing/secondary glazing, when replacing single glazing
• upgrading to energy efficient doors
• hot water tank/appliance tank thermostats/heating controls

To access the voucher scheme, it is expected that landlords will need to access the Simple Energy Advice (SEA) service and follow a process which will suggest appropriate home improvements and offer a list of approved TrustMark and MCS registered tradespeople.

MHCLG says these measures could help landlords save up to £600 a year on their energy bills.

Households on low income will receive vouchers covering 100% of the cost of the improvements, up to a maximum of £10,000.

“Green home improvements will save people money on their energy bills, help to cut carbon emissions, and create new work for many thousands of builders, plumbers and other tradespeople,” says Business and Energy Secretary Rt Hon Alok Sharma.

“Our TrustMark scheme will guarantee that building work is completed to a high standard by accredited tradespeople, ensuring consumers are fully protected.”

Critics

The scheme has its critics. Generation Rent says: “Landlords have been allowed to get away with letting out poorly insulated homes and as a result too many private renters cannot afford to heat their homes properly.

“The Green Homes Grant is a huge opportunity to rectify this, but nothing will happen unless the government makes it easy for renters to benefit and tells them about it.

“If renters are shut out of the process we’ll miss this chance to improve the quality of rented homes and reduce renters’ bills.”

The Government has previously indicated that residential rental properties should be achieving an Energy Performance Certificate rating of D or better by 2025 and C or better by 2030.

The MHCLG announcement was made today within details of a new £1.3 billion infrastructure scheme to build 45,000 homes and create up to 85,000 jobs including for ‘shovel ready’ schemes and new homes on brownfield sites.

Industry reaction

Ben Beadle, Chief Executive for the NRLA said: “Today’s announcement is good news for landlords and tenants, and demonstrates what can be achieved when the Government works constructively with landlords.

“Energy efficient homes are clearly important to improving health, reducing household bills and meeting the Government’s ambitions around carbon reduction. We welcome the clarity around what measures will be included as part of the Green Homes Grant scheme and encourage landlords to make use of this important initiative when it opens.”

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Airbnb is doing a U-turn with its global leader pledging to slash the number of professional landlords using the platform and identify those who remain.

The platform has long attracted complaints from a wide range of sources because it has allowed landlords to kick-out long term tenants and instead attract higher-paying short lets holidaymakers.

Now co-founder Brian Chesky says in an interview with the Sunday Times that he recognises the problem, and the damage this does to some local housing markets.

In the interview Chesky says he will undertake “a really serious audit” which will end up with the removal of professional landlords whose offering “doesn’t connect to the Airbnb brand” while those professional landlords who remain will be chosen because they offer an “authentic experience” – and those that remain will be “branded a little differently.”

This might include identifying whether landlords hosting tenants via the platform will be on hand to meet and greet and whether they will give local recommendations – two criteria, he suggests, which make it easier to spot remote landlords currently using the platform to fake local involvement.

He also pledges to give city authorities more information about the scale and scope of Airbnb properties and transactions which will help local councils catch unscrupulous operators.

Airbnb in particular, and short lets platforms in general, have been the subject of huge criticism by city authorities in recent months.

Politicians in Dublin have spoken of possibly buying short let properties to ensure they are used for genuine housing need, while the Budapest local government is the latest to consider capping the number of days a property can be short-let per year.

Meanwhile in the Portuguese capital of Lisbon, the mayor is pledging to “get rid of Airbnb” when the pandemic ends, by turning over the properties to become affordable housing for long-term tenants. Airbnb property owners apply to rent to the city authorities for a minimum of five years.

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The government has made a last minute U-turn on the eviction ban – extending it for four weeks until September 20.

The Housing Law Practitioners Association has tweeted this afternoon: “We have now had official confirmation that the stay on possession proceedings will be extended to September 20.”

BBC Radio 4’s World At One programme also announced it had been told of the new September 20 deadline.

However, the Ministry of Housing, Communities and Local Government has not made a public statement on the new date, nor on what other policies may accompany this extension.

At the stage, without further details, it appears uncertain what the government aims to use the next four weeks to achieve.

The ban was to lapse on Sunday, with some repossession cases scheduled for newly-approved Nightingale courts from Monday.

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New research pours cold water on claims by anti-agency campaigners that there will be a glut of evictions when the ban ends later this month.

In a survey of 106 letting agencies in England by accreditation body safeagent, 36 per cent say they do not believe any of their tenants will be evicted when the ban ends.

A further 57 per cent say there may be evictions but this would involve fewer than 10 per cent of their tenants.

And when asked what the reason was behind those possible evictions, the agents say they are because of longer standing arrears rather than rent not paid during the pandemic.

In terms of arrears, 74 per cent of respondents say the proportion of their tenants who have not been able to pay their rent over the past three months was under 10 per cent. One in 10 agents say it was between 10 and 20 per cent of tenants.

For those who are in arrears, the majority of tenants were behind only one or two months while just five per cent of firms say tenants had arrears of over three months.

Self-employment, furloughing and delays in Universal Credit were blamed by most of those tenants in arrears.

In order to help maintain more tenancies and support both tenants and landlords, safeagent wants landlords to receive immediate direct payments when tenants move on to Universal Credit – rather than having to wait for two months arrears to occur.

“These results show that the rhetoric emanating from lobbying groups around arrears and the likely number of tenants to be evicted as a result of their inability to pay rent, does not give the full picture” says Isobel Thomson, safeagent chief executive.

“safeagent is concerned about the rhetoric around evictions which does tenants no favours and only raises their levels of anxiety at an already difficult time. Instead of demanding a halt to all evictions, shouldn’t we all be working together to find solutions that support tenants to stay in their homes?”

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Rogue landlords have been accused of tax evasion which could cost the Treasury as much as £1.73 billion a year.

The accusation comes from Tax Watch, a think tank which describes itself as “the UK’s only charity dedicated to compliance and sound administration of the law in the field of taxation.”

A report published by the charity this morning says the last time the government completed an estimate of tax evasion in the buy to let sector was back in 2013, when it suggested up to 1.5m landlords may have been failing to declare income – leading to an unpaid ‘tax gap’ of £540m.

Tax Watch’s analysis of how HMRC compiled the figure in 2013, complemented by more recent data, leads it to calculate that the current figure of tax evasion is £1.73 billion – over three times the amount revealed in 2013.

The think tank charity adds that HMRC’s long-running Let Property Campaign, which involves pressing landlords to ‘come clean’ on unpaid tax, has been largely ineffective.

It says between 2013 and 2019 some 35,099 people made voluntary disclosures to HMRC in response to the Let Property Campaign – only 2.3 per cent of the individuals originally identified.

To identify tax liability, the charity demands a UK-wide landlord database, and it particularly praises the licensing scheme created by Labour-controlled Newham Council as a way of monitoring landlord and property numbers.

“The government has been extremely reluctant to roll out licensing schemes used by boroughs like Newham nationwide, deeming it to be an unnecessary regulatory burden on landlords” claims Tax Watch.

It advocates a UK-wide database akin to National Insurance, with each property to let having a unique number which would have to be used by BTL mortgage lenders, licensing authorities and buyers.

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The National Residential Landlords Association is giving the thumbs up to the government’s Green Homes Grant, which it claims has taken on board many of its suggestions.

Announced in the Chancellor’s Summer Statement last month, the scheme will see the Treasury provide at least two-thirds of the cost of improvement work for homeowners and landlords to make their properties more energy efficient.

A cap of up to £5,000 per household will apply, which increases to £10,000 for low income households in the owner occupied sector.

The detailed plans published adopt the recommendations made by the National Residential Landlords Association including that:

– tradespeople used for the scheme must be registered for TrustMark or Microgeneration Certification Scheme accreditation;

– the range of measures covered by the scheme should be comprehensive. Government plans say that energy efficiency works should include some element of insulation or low carbon heat installation to qualify for the subsidy which can then also include a range of other measures such as draught proofing, replacing windows or doors and installing heat controls;

– residential rental properties should be achieving an Energy Performance Certificate rating of D or better by 2025 and C or better by 2030.

“[The] announcement is good news for landlords and tenants, and demonstrates what can be achieved when the government works constructively with landlords” explains Ben Beadle, NRLA chief executive.

“Energy efficient homes are clearly important to improving health, reducing household bills and meeting the government’s ambitions around carbon reduction. We welcome the clarity around what measures will be included as part of the Green Homes Grant scheme and encourage landlords to make use of this important initiative when it opens.”

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A senior lettings expert with almost four decades experience says evictions should not be considered during the virus crisis, irrespective of the ban ending this month.

David Alexander helped set up DJ Alexander in 1982, and it describes itself as one of the largest family-run property management companies in the UK.

Now he says that as long as the continued impact of the pandemic remains, then action on evictions should not be considered.

While the longevity of the COVID-19 pandemic is uncertain, with unemployment potentially about to rise, and the future of the economy up in the air, now is not the time to disrupt tenants’ lives with the prospect of evictions he insists.

Alexander, now also a joint managing director of PropTech platform apropos, says: “It is essential that agents and landlords work closely with tenants to develop and maintain a strong relationship to produce the best outcome for all involved. Excellent communication is essential in ensuring that everyone understands the current circumstances and is prepared to liaise and negotiate to find solutions which are appropriate for each individual situation.

“In March, our firm wrote to all of our tenants asking them if they were facing any issues or problems due to the pandemic and encouraging them to get in touch as soon as possible to see how we could resolve these issues. This ensured that tenants felt comfortable about communicating and clear that their concerns would be listened to with a sympathetic ear.”

He says that as a result of the contact, his firm is currently working with 500 tenants and landlords with the consequence being a mix of reduced rents, agreed payment plans and, in some cases, cancelled rents altogether.

“Working out what solution is best for each individual tenant and landlord is the key to good relations in the private rented sector. These are temporary solutions for unusual times and we would, when the situation improves, always work with landlords and tenants to maintain regular payments to avoid arrears becoming an issue” he maintains.

“The best landlords understand it is more important, at this time, to ensure that tenants are not worrying about rent when so many other aspects of their lives may be under threat. Obviously, many landlords have major issues of their own and it is important to respect these. but developing long term, mutually beneficial relationships is crucial and requires understanding, communication, and trust.”

He says that in the past there’s been a tendency to portray the landlord and tenant relationship as an ‘us and them’ situation but in reality landlords “must understand that their property is not just giving them with an income but is providing a home and a roof over someone’s head who requires respect and understanding.”

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The chief executive of campaigning charity Shelter claims some lettings agencies are ignoring the recent ruling that private landlords cannot discriminate against benefit claimants.

Last month a court in York ruled that blanket bans on claimants are strictly forbidden, on the grounds of discrimination. It found a single mother of two had experienced indirect discrimination when a letting agent refused to let a property to her.

That legal ruling was welcomed by landlord and lettings agency bodies at the time but now the chief executive of Shelter, Polly Neate, has told The Guardian newspaper: “Hundreds of people have since contacted our services with similar stories [of no DSS] and we are still hearing of letting agents and private landlords ignoring the judgment.”

She continues: “The recent court judgment was an incredibly important step forward but Shelter has been fighting ‘No DSS’ for nearly two years and will continue to do so until these discriminatory practices are stamped out for good. All landlords and letting agents should know that if they keep acting unlawfully, they could face legal action and hefty fines.”

However, Neate gives no indication of the agencies allegedly breaching the rule, nor how many of them she knows of, nor of any action being taken to notify the authorities.

Just over two weeks ago Shelter claimed it was “doubling up” its efforts to make sure letting agents comply with anti-discrimination legislation when it comes to tenants.

It said at the time: “We’ll be doubling up our efforts to end housing benefit discrimination for good – and make sure letting agents are complying with the ruling.“

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The average rent in the UK has risen 1.5 per cent in just a month, but it is still a fraction under £1,000 pcm.

When London is excluded the average UK rent is £808 and with the capital included it’s £965 according to insurance service HomeLet.

Ten of the 12 regions monitored by HomeLet showed an increase over the past year, with two up by over 4.5 per cent.

But London, by contrast, saw rents drop 3.2 per cent between July 2019 and last month. The South East also shows a yearly decrease, by 1.8 per cent.

The region with the largest year-on-year rent rise was the North West, showing a 6.5 per cent increase.

“Demand for new tenancies is still strong, HomeLet received the same volume of property applications for tenant reference checks this month as the same month last year. That coupled with the steadily increasing rents is positive for the sector, but there’s naturally caution around what could happen over the coming months” explains Martin Totty, chief executive at HomeLet.

Region	Jul-20	Jun-20	Jul-19	Monthly Variance	Annual Variance
North West	£773	£758	£726	2.00%	6.50%
Yorkshire & Humberside	£670	£658	£641	1.80%	4.50%
South West	£876	£858	£855	2.10%	2.50%
Scotland	£692	£692	£679	0.00%	1.90%
East Midlands	£656	£651	£646	0.80%	1.50%
West Midlands	£721	£714	£709	1.00%	1.70%
North East	£535	£525	£529	1.90%	1.10%
East of England	£932	£917	£925	1.60%	0.80%
Northern Ireland	£674	£659	£671	2.30%	0.40%
Wales	£638	£636	£637	0.30%	0.20%
South East	£1,034	£1,022	£1,053	1.20%	-1.80%
Greater London	£1,611	£1,583	£1,665	1.80%	-3.20%
UK	£965	£951	£959	1.50%	0.60%
UK excluding Greater London	£808	£797	£794	1.40%	1.80%

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The short lets market aimed at international travellers may be in for a difficult time – even the co-founder and chief executive of Airbnb says so.

Brian Chesky has told Yahoo Finance that “the world of travel as we knew it in January is never coming back… I feel very confident about that.”

Chesky claimed that within six weeks of the Coronavirus going global his business had lost some 80 per activities that it had spent 12 years building up: Airbnb was reportedly valued at $26 billion in March but has since had to abandon plans to float.

He forecasts that holidays are going to shift long term, with people less enthusiastic about flying and more resigned to staycations rather than international breaks.

“People are saying they do want to get out of the house, regardless what country they’re in but they aren’t right now super comfortable getting on aeroplanes. They want to get in cars, and they want to travel not more than 300 miles away or 200 miles, a tank of gas” he tells Yahoo.

“A whole bunch of people who thought they had to get on an aeroplane and go to a city and stay in a central district realize, well, there are 400 national parks in the United States, and I live near one and maybe I should go see a natural park” he adds.

Many letting agencies which had diversified into Airbnb and other short lets management have now returned to concentrate solely on long-term bookings, while the fledgling trade group for short lets in the UK – the Short Term Accommodation Association – has given dire warnings about the financial health of the support industry that has grown up around Airbnb and similar services.

Globally Airbnb has already slashed its workforce by about 25 per cent and says it expects 2020 full-year revenue to be about half of last year’s.

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