Year: 2020

The Ministry of Housing, Communities and Local Government has recently updated its guidelines prior to the July 1st implementation of the new electrical safety checks for new tenancies.

A chairman of an agency chain believes that landlords should be aware there could be a glut of empty private rented housing stock in various areas throughout the UK, and says that to entice new tenants in they should seriously consider offering a 50% reduction in rent for the first three months.

Simon Shinerock – chairman of the estate agency chain has told a PRS website that it’s “an enormous mistake” if landlords insist on sticking to market rents, if there is a surplus of empty rental homes in their area.

He said: “Going from £1,000 rent to £500 for three months might sound crazy but if that gets you a great tenant who might be there for four years or five years, it makes sense in the long run”.

Shinerock warns that the Coronavirus may cause major changes in the rental market, Airbnb lets’ properties will go back to longer term tenancy agreements especially around Gatwick, Heathrow and other airports’ surrounding areas as demand will undoubtedly fall.

Shinerock says the full consequences of the Covid – 19 pandemic on the rental market will not be fully felt until 2021. The damage will be very much of a ‘slow-burn’ until the full impact occurs when furloughing is withdrawn and the effect it will have on the ever changing wider economy.

He says landlords must make themselves become fully aware of the change in circumstances in their local area, where there is a strong likelihood some will have an oversupply and others having housing stock shortages.

Richard Merrick of PIMS, said:”I may be wrong but I cannot think of anyone being able to single out an area in the UK, where there will be the number of unoccupied rental homes that would warrant a 50% cut in rent for new tenants.

“Many of our agency members have told us that there is a ‘gold rush’ of applicants for new tenancies following the lockdown restrictions being removed.”

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A solicitor involved in the Court of Appeal case which ruled in favour of the private rental sector has spoken of the relief the decision represents for the industry – but has also suggested there may be more challenges.

Sarah Cummins of the Anthony Gold law firm acted for the landlord in the case of Trecarell House Ltd v Rouncefield, which last week ended with the ruling that the late service of a gas safety certificate does not prevent a landlord from serving a section 21 notice on their tenant provided the certificate has been given to the tenant before service of the notice.

The court’s decision will be welcomed by private sector landlords who feared that a failure to provide the gas safety certificate permanently prevented them from recovering possession of their properties.

Cummins says: “The court’s decision is a good outcome for landlords. It means that where a landlord has failed to provide a new tenant with the last gas safety certificate before occupation, they are able to remedy this by providing the certificate late. This will be a welcome relief to the many responsible landlords fearful that accidental mistakes in providing tenants with certificates could result in them permanently losing the ability to serve a section 21 notice.”

She says the Court of Appeal’s decision has gone some way to clarifying the problematic points of law on the relationship between gas safety certificates and section 21 notices – but she warns that this may not be the last of the cases on these issues.

What is clear is that the importance of carrying out gas safety inspections, retaining records and providing certificates to tenants should not be underestimated, says Cummins.

The case of Trecarrell v Rouncefield centred on the relationship between Section 21 notices and gas safety certificates.

The landlord, Trecarrell House Limited, was initially granted an order to repossess the property using S21 powers; however the tenant successfully appealed on the grounds that they were not provided with a gas safety certificate prior to moving in.

Despite the landlord making the certificate available after the tenancy had begun, courts initially ruled that the S21 notice was invalid, referring to a previous similar case in which the certificate was made available less than two weeks after the tenant moved in.

The Court of Appeal however has now ruled that Section 21 notices are valid provided a Gas Safety Certificate is issued before the notice is given to the tenant, not before a tenant moves into a property.

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Brent Council’s decision to overhaul its tenancy strategy reflects reality that banning Section 21 notice evictions will, in effect, introduced open-ended tenancies through the back door, as has happened in Scotland.

Brent Council hopes to inspire private landlords to follow its lead by giving tenants more security by introducing life-time tenancies.

The London borough has overhauled its tenancy strategy and will be working closely with all private and social housing landlords to encourage them to review the way they manage their own tenancies.

It wants to incentivise them to encourage longer tenancies and rent at local housing allowance levels and to promote community-led housing in the private rented sector and deposit guarantee schemes.

A council spokeswoman tells LandlordZONE: “Our hope is that landlords will work with us so the private rented sector is an affordable and accessible housing option for Brent renters.”

Brent has replaced its fixed-term tenancies with life-time tenancies and has also introduced ‘demoted’ tenancies to tackle anti-social behaviour (a form of tenancy that reduces a tenant’s security of tenure and rights).

It says that while the majority work well, when things break down and a council tenant has been involved in antisocial behaviour or uses their home unlawfully, officers can now serve a four-week notice of intention to demote the tenancy for 12 months.

The council’s updated tenancy management policy pledges to support residents so they can stay in their homes “for as long as is suitable for them” and it has promised to work actively to prevent homelessness. Brent is now offering joint tenancies to cohabiting couples so that both people are protected.

Secure home

Councillor Eleanor Southwood, cabinet member for housing and welfare reform, says the Covid-19 pandemic is a reminder of how important it is to have a safe and secure place to call home.

She adds: “I want everyone who moves into a council home to feel settled and part of their local community so that they can start building happy memories, without worrying.

“A secure tenancy for as long as someone needs – and providing accessible and clear information about what to expect – are a core part of our promise. I very much hope that all landlords across the borough will adopt these changes”.

“Tenancies without an end date will become the norm once Section 21 notice evictions are banned, as is already the case in Scotland,” says Tim Frome, Legal Director of Landlord Action.

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Successes for the private rental sector may seem few and far between these days but the Court of Appeal has now given a legal boost following a key judgement on repossessions.

The case of Trecarrell v Rouncefield centred on the relationship between Section 21 notices and gas safety certificates.

The landlord, Trecarrell House Limited, was initially granted an order to repossess the property using S21 powers; however the tenant successfully appealed on the grounds that they were not provided with a gas safety certificate prior to moving in.

Despite the landlord making the certificate available after the tenancy had begun, courts initially ruled that the S21 notice was invalid, referring to a previous similar case in which the certificate was made available less than two weeks after the tenant moved in.

The Court of Appeal however has now ruled that Section 21 notices are valid provided a Gas Safety Certificate is issued before the notice is given to the tenant, not before a tenant moves into a property.

The landlord’s case has been backed by trade bodies including the former Residential Landlords Association which argued that the situation could have breached a landlord’s rights under the European Convention on Human Rights on the basis that it deprives them of their possession.

A crowd funding campaign set up by the RLA to raise money for the appeal raised more than £7,000.

Now John Stewart – deputy policy director of the new National Residential Landlords Association – says: “We welcome the clarity that [the] ruling brings for the sector. Going forward however, ministers remain committed to eventually getting rid of Section 21 altogether.

“We have been campaigning to ensure that such moves are only made within the context of improvements to the way courts handle cases and clear, comprehensive and timely routes for landlords to repossess properties in legitimate circumstances.

“We are heartened therefore that the housing minister has made clear that such changes will only be made ‘in a considered manner’ and not as an immediate response to the Coronavirus pandemic.”

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The government says it’s currently working to ensure the eviction process returns smoothly when the ban expires in late August.

In the House of Commons yesterday, in response to a question about evictions, the housing minister Chris Pincher said: “The Ministry of Housing, Communities and Local Government is working closely with the Ministry of Justice and the judiciary on arrangements, including new rules, to ensure that when the moratorium on evictions ends, the courts are better able to address the need for appropriate protection of all parties, including those shielding from Coronavirus.

“This judicial-led work is to ensure that judges will have all the information necessary to make just decisions in the current framework and that the most vulnerable tenants will get the help they need.”

Pincher made no reference to the current date at which the moratorium is expected to end – August 24 – and the most recent extension to the original ban was not announced until a week before it was scheduled to end.

However, as we reported on Letting Agent Today last evening, the government appears to have confirmed that the evictions ban will end in late August and courts will resume hearing possession cases from that time.

Responding to a series of parliamentary questions, Lord Greenhalgh – a junior minister at the Ministry for Housing, Communities and Local Government – has said that from August 24 “the courts will begin to process possession cases again”.

After what would be a five month suspension, the Minister argued that this would be “an important step towards ending the lockdown and will protect landlords’ important right to regain their property.”

He reiterated however that work is ongoing to ensure “the most vulnerable tenants can get the help they need when possession cases resume.”

The minister confirmed that under plans to end Section 21 repossessions as part of the Renters’ Reform Bill, ministers want to ensure that “landlords are able to swiftly and smoothly regain their property through the courts where they have a legitimate reason to do so.”

Ben Beadle, chief executive of the National Residential Landlords Association, said of the news last evening: “The minister’s comments provide greater certainty for the rental market.

“We continue to work hard with landlords and tenants to sustain tenancies wherever possible. In the vast majority of cases this is happening.

“It is vital however that swift action can be taken against those tenants committing anti-social behaviour or domestic violence.  We are calling also for priority to be given to cases where possession orders were granted prior to lockdown or where rent arrears have nothing to do with the COVID pandemic.”

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One bedroom properties provide the best returns to buy to let investors according to new research by a lettings management platform.

Single bedders provide a rental yield of 6.2 per cent on average while two beds typically provide 5.6 per cent and three-bedders have an average yield of 5.0 per cent.

The averages mask significant local variations according to this research by Howsy.

When it comes to investing in a one-bed buy to let, Newcastle is the best bet, with the average yield coming in at 7.9 per cent, closely followed by Glasgow on 7.7 per cent. Liverpool and Plymouth are also 7.0 per cent or higher.

For two beds Newcastle, Glasgow, Belfast and Sheffield are all over 6.0 per cent yields.

“Tenants’ demand is growing for one and two-bed homes that provide them with a space of their own. This growing demand is leading to one and two-bed properties climbing the ranks of profitability due to their lower investment price point and higher demand pushing up rental prices” according to Howsy founder Calum Brannan.

“As the threat of the Coronavirus reduces, we will no doubt see this trend reverse as people begin to again feel comfortable about shared living and the better social lifestyle this brings.”

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The government appears to have confirmed that the evictions ban will end in late August and courts will resume hearing possession cases from that time.

Responding to a series of parliamentary questions, Lord Greenhalgh – a junior minister at the Ministry for Housing, Communities and Local Government – has said that from August 24 “the courts will begin to process possession cases again”.

After what would be a five month suspension, the minister argued that this would be “an important step towards ending the lockdown and will protect landlords’ important right to regain their property.”

He reiterated however that work is ongoing to ensure “the most vulnerable tenants can get the help they need when possession cases resume.”

The minister confirmed that under plans to end Section 21 repossessions as part of the Renters’ Reform Bill, ministers want to ensure that “landlords are able to swiftly and smoothly regain their property through the courts where they have a legitimate reason to do so.”

Ben Beadle, chief executive of the National Residential Landlords Association, says of the news: “The minister’s comments provide greater certainty for the rental market.

“We continue to work hard with landlords and tenants to sustain tenancies wherever possible. In the vast majority of cases this is happening.

“It is vital however that swift action can be taken against those tenants committing anti-social behaviour or domestic violence.  We are calling also for priority to be given to cases where possession orders were granted prior to lockdown or where rent arrears have nothing to do with the COVID pandemic.”

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The latest research by lettings management platform, Howsy, looks at which property type provides the best financial investment when it comes to buy to let rental yields across the UK’s major cities.

Previous research from the firm found that three was the magic number for rental yields, offering the highest return with a rental yield of 4.3%. While this has since increased to 5% now, the latest figures show that three-beds are no longer the best investment option.

In fact, both two and one-bed properties have leapfrogged the three-bed where rental yields are concerned, with the average two-bed providing a yield of 5.6%, while one-beds now averages a return of 6.2%.

When it comes to investing in a one-bed buy-to-let, Newcastle is your best bet, with the average yield coming in at 7.9%, closely followed by Glasgow (7.7%), Liverpool (7.1%) and Plymouth (7%), all home to yields of 7% or greater.

Newcastle and Glasgow also rank along with Belfast (6.9%) as the best spots for a two-bed buy-to-let investment, with Sheffield (6.7%) and Leeds (6.4%) also proving profitable.

While if you want to stick with the trusted three-bed, Glasgow again tops the table (6.9%) among Newcastle, Belfast, Leeds and Liverpool.

Calum Brannan, founder and CEO of Howsy, commented: “We’re seeing a lot of changes to traditional property trends across the sector and the latest seems to be the profitability of the three-bed buy-to-let.

“While still a good investment, on the whole, tenants demand is growing for one and two-bed homes that provide them with a space of their own.

“This growing demand is leading to one and two-bed properties climbing the ranks of profitability due to their lower investment price point and higher demand pushing up rental prices.

“As the threat of the Coronavirus reduces, we will no doubt see this trend reverse as people begin to again feel comfortable about shared living and the better social lifestyle this brings.”

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The national body representing landlords has said that landlords are now powerless to take action against tenants committing domestic abuse or making the lives of fellow tenants or neighbours a misery following the extension.

According to the NRLA, the decision to extend the ban on evictions in rented housing will compound the suffering of victims of domestic violence and anti-social behaviour.

Research last year by the University of Bristol, 38% of victims of domestic abuse live in private rented housing, a higher proportion than any other tenure. The charity Refuge, which runs the Domestic Violence Helpline, has said that there has been a 66 per cent increase in calls to the helpline during the COVID-19 pandemic.

In cases of domestic violence, landlords will often end the tenancy agreement and offer a fresh one, for the same property, to the victim independent of the abuser.

The NRLA argues that the ban goes against the spirit of a report by the then Victims Commissioner, Baroness Newlove, who warned last year that “victims of anti-social behaviour are being let down by police, local councils and housing providers.”

The body is calling for the courts to deal urgently and swiftly with cases concerning anti-social behaviour and domestic violence when they are allowed to begin to hear repossession cases.

Since the Government made the decision to further extend the evictions ban, many victims of such behaviour have taken to twitter to express their deep concerns at the move. Sentiments have included:

“My sister can’t return to the house she owns because the abusive next-door neighbours who rent and have been served a section 21 can’t be evicted – how is that fair?! Meanwhile, her mental health suffers.”

“Fantastic. Landlord won’t be able to evict the criminals living below me that are making mines (stet) and my daughter’s life’s hell. Landlord can’t evict them, police aren’t doing anything. What am I supposed to do now? I own my home I can’t just up and leave.”

Ben Beadle, Chief Executive of the NRLA, said: “Extending the evictions ban is not without victims. It leaves landlords powerless to tackle the kind of behaviour that causes untold suffering and hardship for many communities and tenants alike.

“These cases must be given top priority by the courts and their processes enhanced to avoid further delay once they start to deal with possession cases.”

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