Year: 2020

Government advice to local authorities to sit tight with new licensing proposals during the Coronavirus pandemic appears to have been ignored by the Labour-controlled Islington council.

The authority has confirmed that it’s introducing two new schemes following formal consultation processes last summer and autumn.

“We will not tolerate dodgy operators taking advantage of people’s desperate need for a home. Licensing schemes are powerful tools to help us protect private renters, as they enable the council to use data to identify properties with poor conditions and take appropriate enforcement action” says a council spokesman.

“The council can and does act to protect private renters and we’ve taken significant enforcement action against rogue landlords and dodgy lettings agents recently” he continues.

“Schemes like this also help the council to ensure that conscientious landlords are rewarded. There are a great many responsible landlords in the borough and schemes like this help to level the playing field.”

The first scheme is a borough-wide scheme licensing HMOs.

The council claims that HMOs have some of Islington’s poorest housing standards, with many conversions having inadequate fire safety measures. A pilot HMO licensing scheme in parts of the borough has been in place since 2015 and – according to a council statement – has led to an improvement in the management of properties.

The second scheme is a selective licensing scheme for Finsbury Park ward, building on the borough-wide HMO licensing scheme. Finsbury Park ward has the poorest housing conditions in private rented property in the borough.

The council claims that the licensing schemes will allow it “to set minimum standards for property management, including the provision of kitchen and bathroom facilities, room sizes, health and safety (e.g. fire, gas and electrical safety checks) and kept to an appropriate standard.”

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The Daily Mail has just run a story that the Mayor of London, Sadiq Khan, is urging the government to implement a triple lock system for renters, as he is concerned that once lockdown restrictions are rescinded then many could be in a dangerous situation of being evicted, once the suspension is ended.

At the start of the Coronavirus pandemic the government suspended all ongoing eviction processes which is due to end in the summer, Khan is proposing that the following triple lock protection system to protect tenants, should be introduced.

His proposal includes the following:

“Immediately increase welfare support for renters, suspend the Benefit Cap, restore Local Housing Allowance (LHA) rates to median market rents, and cover any shortfall in rental payments of private tenants unable to pay them due to COVID-19 – including those with no recourse to public funds. This could be achieved by setting aside LHA rates for those who are affected by COVID-19.

“Once the temporary suspension of court proceedings is lifted in June, prevent private landlords from evicting tenants who have accrued arrears as a result of COVID-19. This could be achieved by making section 8 (the arrears ground for eviction) discretionary in court proceedings.

“Scrap so-called ‘no fault’ section 21 evictions. This would prevent landlords evicting tenants affected by COVID-19 using this route as an alternative to the section 8 method.”

As soon as his proposals were sent to the government Khan commented: “For too long, renters in the capital and across the country have been denied the security they need in the place they call home. The current crisis has brought these issues into stark relief.

“With millions of low paid renters in London now facing increased financial uncertainty we face a ticking timebomb of debt, arrears and widespread evictions once the suspension in court proceedings is lifted.

“The Government must urgently put in place measures that will prevent private landlords from evicting tenants who go into arrears as a result of COVID-19.

“Failing to bring in more support for renters will not only result in widespread financial hardship, but risks increasing the public health crisis, as renters may feel forced to return to work too soon with increasing debt and arrears hanging over their heads.”

Unsurprisingly many landlords are in favour of the suggestion for the LHA (Local Housing Allowance) change, as the current the rates are calculated using the bottom third of average rents across each broad rental market area.

Switching people from existing legacy system of benefits to Universal Credit will fill many recipients with dread because of delays in receiving their first payments.

A trade association is very aware of the problem that this may cause tenants on benefits.

A spokesperson for the association responded to the proposals and said: “Recent polling has indicated that just two per cent of private tenants have had to stop paying rent due to the pandemic whilst 78 percent have not had to make any changes to their living situation.

“This shows that the vast majority of tenancies are continuing as normal which we welcome.

“For those tenants who are struggling, by far the best solution is to ensure they are supported to prevent arrears building.

“We therefore welcome the Mayor’s calls to increase the Local Housing Allowance. In addition, we repeat our call on the Government to scrap the five week wait for the first payment of Universal Credit immediately and ensure tenants can have the housing element of the Credit paid directly to their landlord if they wish.

“This would provide tenants and landlords with the confidence that rents are covered and debts will not arise.”

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A private tenants’ group is telling the government it needs to help housing associations snap up buy-to-let properties “at knockdown prices.”

Generation Rent’s website featured a blog speculating on how the housing market could be affected once the lockdown restrictions are lifted and also mulls over the recommendations from the Affordable Housing Commission.

The blog poses what could happen if private developers are unable to sell new build homes at the current market prices and first time buyers unable to afford deposits for a home.

The blog then discusses the plight of ‘distressed landlords’ who need to sell their properties and says: “To encourage a tenure shift of homes from the private sector into the social sector, the Commission recommended that the government support social landlords to purchase existing homes and purchasing homes at knockdown prices would make it easier for not-for-profit landlords to charge affordable rents.”

The blog then muses there could be a major problem for housing associations as BTL investors may get to bargain buys as they will ‘see a housing market crash as an opportunity to buy up properties and then ramp up rents as the economy recovers.”

The blog concludes:”We need the government to provide a social housing acquisition to make sure tenants are the ones who benefit from any crash.”

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The consumer organisation Which? is claiming that some landlords are stopping tenants from moving out in fear of being unable to let their property afterwards.

The organisation has been contacted by tenants saying that their landlords are refusing to honour break clauses in tenancy agreements; it also claims that some landlords are applying ‘pressure’ on tenants whose agreements have ended to continue renting their properties.

It mentions the case of ‘Chelsea’ who lives in a shared house in Leytonstone whose freelancer work has dried up because of the pandemic, she took the decision to end her tenancy early which would incur a £300 penalty. However the letting agent told her that it was down to the landlord as to whether she could leave mid tenancy and because of the current situation her request had been denied.

Which? said: “Landlords should not be able to choose whether or not they will allow the tenant to leave under a break clause.

“If this is the case it could be argued that this amounted to an unfair term under the Consumer Rights Act 2015.

“Others tenants are having problems with tenancies that are coming to an end during the lockdown.”

Gloucester tenant Joel Richardson who is now unemployed told Which? that his tenancy agreement finishes in May, but his landlord told him it is in his ‘own best interest’ to stay on.

Richardson says: “I know we’re not bound to stay, but the landlord says that if we leave, we’ll be breaking the law and social-distancing rules. He says that because of this, he won’t return our £1,000 deposit and won’t be able to give us a reference.”

The organisation states that any tenant is under no legal obligation to the landlord once the tenancy agreement has been ended and said:”You can move out. If a private landlord is trying to withhold your deposit, contact the deposit scheme.”

Which? cites research from a lettings agency which found that 70% of tenancies that had been due to end in March had in fact been renewed and a spokesperson added: “Your current tenancy will usually continue as a periodic tenancy if your fixed-term contract ends as long as you still live there.”

The government has provided advice to agents, landlords and tenants in working together during the lockdown.

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Landlords are now taking advantage of being able to supply uploaded video footage and photos of their properties to chartered surveyors during the lockdown.

Home sellers are now able to provide valuers a virtual tour of their property so as not to breach the current lockdown distancing restrictions; some mortgage lenders are jumping on board by accepting this type of service.

A spokesperson for a specialist buy-to-let mortgage broker, said: “This is an interesting innovation. A lot of our landlord clients are taking advantage of remote valuations being offered by buy-to-let lenders.”

According to the specialist buy-to-let mortgage broker, BTL investors are using virtual valuations in acquiring mortgages for residential properties of up to 75% of loan-to-value (LTV).

The spokesperson continued: “Lenders who require a physical valuation at a higher LTV are generally processing landlords’ remortgage applications as normal – but moving the valuation part of the application to the very end.

“A significant percentage of our landlord clients are happy to do this. They’re content to sit back and wait out the lockdown and get a physical valuation done.”

“But with valuers banned from visiting homes, landlords are finding remortgaging harder than it was. This potentially offers an interesting way forward.”

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The London Renters Union is strongly against the government extending the mortgage holiday for landlords.

The Financial Times has said that there could be a possibility of the current mortgage holiday scheme introduced in March, which is due to finish at the end of June, could be extended by at least three months but with a stricter criteria and regime.

UK Finance, a trade association for the banking and financial services sector, says that borrowers who have taken advantage of the scheme have a monthly payment average of £755.

However the London Renters Union says: “Every landlord owns hundreds of thousands of pounds of wealth, while nearly two thirds of renters have no savings. Clearly, it’s renters who should be getting support right now.”

A government statement has not yet been released regarding an extension to the mortgage holiday, and the LRU says: “The government is prioritising landlords’ profits over renters’ survival. As well as getting an extended mortgage holiday, landlords are benefiting from the increase in the Universal Credit Local Housing Allowance, which effectively subsidises their wealth. What have renters been given? A weak and temporary eviction ban that has allowed many evictions to continue.”

The Renters Union has been contacted recently to find out how many evictions have taken place since the ban was introduced however a reply has not been forthcoming.

The Union’s statement continues: “The government has said it wants to avoid a sudden increase in financial distress when its temporary measures end. In that case, it needs to prevent the eviction crisis that will begin as soon as the temporary ban is lifted on 25 June. And it needs to end the rent crisis that has been building for years, but which the pandemic has magnified to catastrophic proportions.

“Instead, the government has only proposed the weakest of stop gap measures. It must suspend rent, cancel rent debt and make the eviction ban permanent. Otherwise we’re headed for a disastrous rent debt and eviction crisis.”

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A PRS website claims that there will be no extension to the evictions ban due to end on June 29th, in spite of any official confirmation from the government.

The Ministry of Justice nor the Ministry of Housing, Communities and Local Government have yet to make an announcement that new evictions and suspended hearings will start again on June 29th.

The Housing Secretary Robert Jenrick has recently told MPs that the government is considering other ways on how to best help renters and was “thinking carefully” in light of the eviction ban being lifted.

Labour MPs questioned Jenrick when addressing the House of Commons, as to whether there are any measures being put into place to help tenants who are falling into rental arrears.

Jenrick said that the eviction ban is due to finish at the end of June, however a decision will be made shortly before that date on whether the ban will extended; this will be determined by medical advice on the fight against the virus, the state of the market along with information received from courts regarding evictions.

Since March 27th all court possession orders were suspended which meant that any ongoing cases could not be progressed through the courts and new possession orders could not be submitted..The government stated the suspension of housing repossessions would initially be for 90 days, however there was the caveat that the ban could be extended if deemed necessary.

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Legislation changes this week have seen the housing market re-opened, with landlords now permitted to hold viewings and allow tenants to move in and out of rental homes.

While this is welcome news, it is imperative that landlords follow government guidelines on how to do this safely to protect themselves, their tenant and their families.

With this in mind RLA Policy and Campaigns Director Chris Norris has put together a short video for landlords outlining their responsibilities, what has changed and what they need to know going forward.

The video includes details on how and under what circumstances landlords can conduct viewings and how they can make sure they are adhering to the government rules on social distancing. There is also practical information on issues such as cleaning and maintenance.

Watch the video here.

Following the announcement that the housing market was to reopen NRLA chairman Ben Beadle said: “This is welcome news, giving much needed clarity to landlords, agents and tenants, and will allow those planning moves before the lockdown to do so.

“We would advise members to closely follow the government rules on social distancing to ensure they, their tenants and their families stay safe.”

The full rules -­ amendments to the Health Protection (Coronavirus, Restrictions) regulations in England – can be accessed here.

For more information, practical help and advice visit our specialist coronavirus guidance page here.

Written by Sally Walmsley

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The majority of landlords with rental properties in the London Borough of Waltham Forest must now obtain a property licence in order to continue to let their property lawfully.

It comes as a new five year selective licensing scheme was introduced in the Borough on 1st May, covering 18 out of 20 wards. Only the wards of Hatch Lane and Endlebury are excluded.

As with all property licensing schemes that cover more than 20% of the borough, before the plans could go be implemented they needed the backing of the government-something that was granted in Waltham Forest earlier this year.

The scheme has now been introduced, despite government guidance for local authorities stating that during the current Covid-19 lockdown, plans to introduce new non-mandatory licensing schemes should be paused at this time.

Early-bird discount of £250 on licences

Applications for selective licences made from 1st May to 31st October 2020 are eligible for an ‘early bird’ discount of £250 against the full fee of £700. The licence fee is split into two parts – only the fee covering the up-front processing costs is payable when the application is made. This enables the landlord to spread the cost of the fee over several months. A further discount of £100 is available for certain multiple properties.

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