Year: 2020

The parlous state of many tenants’ personal finances has been highlighted by website CompareTheMarket which claims that one in 10 rely on overdrafts to cover the rent.

The site’s research found two-fifths use their overdraft for emergency funding and nearly one quarter use them to cover the cost of everyday bills which is concerning.

Some one in 10 use them to cover rent, with a similar proportion using overdrafts to cover mortgages.

CompareTheMarket claims this is a highly expensive way to manage debt due to fixed daily or monthly charges, as well as fees for having an overdraft facility in place.

From April 6 new Financial Conduct Authority rules mean these charges will be scrapped and banks must charge a simple annual interest rate for overdrafts, without additional fees and charges.

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All court possession orders are being suspended from today as part of the changes to the private rental sector to cope with the Coronavirus crisis.

This means that neither cases currently in the system, nor any about to go in, can progress to the stage where tenants could be served possession orders. This suspension of housing possessions action will initially last for 90 days, but this can be extended if needed.

The announcement came yesterday evening in the government’s latest ruling about the rental sector and the virus.

The statement in full says:

The government has brought forward a package of measures to protect renters affected by coronavirus (COVID-19). With these in force, no renter in either social or private accommodation will be forced out of their home.

To ensure all renters are clear on the full package of support that is currently available to them, we are bringing this together into one place.

From 26 March 2020 landlords will have to give all renters 3 months’ notice if they intend to seek possession (i.e. serve notice that they want to end the tenancy) – this means the landlord can’t apply to start the court possession orders process until after this period. This extended buffer period will apply in law until 30 September 2020 and both the end point, and the three month notice period can be extended if needed. This protection covers most tenants in the private and social rented sectors in England and Wales, and all grounds of evictions. This includes possession of tenancies in the Rent Act 1977, the Housing Act 1985, the Housing Act 1996 and the Housing Act 1988. After three months if the tenant has not moved a landlord needs to apply to court in order to proceed.

From 27 March 2020 following a decision by the Master of the Rolls with the Lord Chancellors agreement the court service will suspend all ongoing housing possession action – this means that neither cases currently in the or any about to go in the system can progress to the stage where someone could be evicted. This suspension of housing possessions action will initially last for 90 days, but this can be extended if needed. This measure will protect all private and social renters, as well as those with mortgages and those with licenses covered by the Protection from Eviction Act 1977. This will apply to both England and Wales.

Tenants are still liable for their rent and should pay this as usual. If they face financial hardship and struggle to pay this, support is available. In the first instance they should speak to their landlord if they think they will have difficulty meeting a rental payment, and in this unique context we would encourage tenants and landlords to work together to put in place a rent payment scheme. 

However we have also put specific measures in place:

• We are working with the Master of Rolls to strengthen the pre-action protocol requirement and also extend this to the private rented sector. This will help landlords and tenants to agree reasonable repayment plans where rent arrears may have arisen.
• We have already made £500 million available to fund households experiencing financial hardship.
• As part of the workers’ support package, the Chancellor announced the government will pay up to 80% of a worker’s wages, up to a total of £2,500 per month, where workers are placed on the Coronavirus Job Retention Scheme.
• Both Universal Credit and Housing Benefit will increase and from April, Local Housing Allowance rates will pay for at least 30% of market rents in each area.

The government is also committed to supporting landlords, and maintaining the positive partnership between tenants and their landlords. That is why, in addition to the measures outlined above, we have also agreed with lenders that they will ensure support is available where it is needed for landlords. Landlords will also be protected by a 3 month mortgage payment holiday where they have a Buy to Let mortgages.

Landlords remain legally obligated to ensure properties meet the required standard – urgent, essential health and safety repairs should be made. An agreement for non-urgent repairs to be done later should be made between tenants and landlords. Local authorities are also encouraged to take a pragmatic, risk-based approach to enforcement.

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Bristol outperformed all other cities with regards to carbon emissions, recycling rates and gas consumption.

Bristol is the most environmentally-friendly city in the UK, whilst Birmingham has been named and shamed as the least eco-friendly, a new study has revealed.

The research, conducted by Good Move, ranked UK cities based on a variety of sustainability factors, before taking an average score to produce a leaderboard.

Bristol came out on top in three of the five ranking categories, outperforming all other cities with regards to carbon emissions, recycling rates and gas consumption. The city’s residents recycle or compost almost half (47%) of their household waste – 6% more than anywhere else – and Bristol is the only city in the UK to consume less than 3,000 kw/h of gas a year.

Such habits saw Bristol crowned the UK’s first-ever European Green Capital in 2015 and Good Move’s research shows this sustainable culture is still flourishing.

Edinburgh took second spot, mainly due to the large areas of publicly available green space. With 49 hectares, Edinburgh has more than any other UK city. Interestingly, another Scottish city – Glasgow – came second in this category, with 32 hectares.

Manchester, Sheffield and Bradford completed the top five most environmentally-friendly cities.

At the other end of the scale, Birmingham was named the least environmentally-friendly city, largely because of its poor recycling and emission statistics. Brummies only recycle 22% of their waste – the lowest in the UK – and only London, which came in second place, has worse carbon emission and gas consumption figures.

In fact, the capital produces more carbon emissions (29,709 tonnes) and consumes more gas (61,546 kw/h) than the other nine major cities combined.

Leeds, Glasgow and Liverpool also ranked amongst the least eco-friendly cities in the UK.

Ross Counsell, director at Good Move, said: “The world is finally waking up to the dangers of climate change and the impact that our lifestyles are having on the planet.

“Our research has highlighted which UK cities are particularly guilty of being unsustainable, while also praising those who are taking steps to address the issues. However, progress can only be made if the country works together as a whole, making informed changes on a national scale.”

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The Property Ombudsman is warning agents not to discriminate against tenants through a No DSS or any similar policy.

Following the legal victories of two tenants winning out-of-court settlements against lettings agents, TPO has also confirmed that it will “consider” obtaining Assured Advice and strengthening its codes of practice to clearly prohibit No DSS clauses in rental advertisements.

TPO has issued a statement reminding agents of existing codes stating that they must:

“1e treat consumers equally regardless of their race, religion or belief, sex, sexual orientation, gender recognition, disability, pregnancy or maternity, or nationality. Unlawful discrimination includes giving less favourable treatment because someone is perceived to have one of these personal characteristics or because they are associated with a person with such a characteristic”

and

“1f take special care when dealing with consumers who might be disadvantaged because of factors such as their age, infirmity, lack of knowledge, lack of linguistic or numeracy ability, economic circumstances, bereavement or do not speak English as a first language.”

In 2019, TPO handled 881 complaints in relation to agent’s general obligations, specifically relating to 1e and 1f of the Codes of Practice for Residential Letting Agents.

The new statement from the Property Ombudsman offices says it recognises these are not all linked to No DSS cases but “the figure still highlights that approximately 17 per cent of all complaints last year were linked to some form of discrimination. For the avoidance of doubt, economic circumstances include tenants who are in receipt of benefits.”

TPO says it knows that some mortgage lenders and insurance providers specifically exclude tenants in receipt of Housing Benefit, in which case it would expect agents to evidence that and give an explanation to prospective tenants on an individual basis.

TPO Katrine Sporle says: “Whilst rental properties are investments for landlords, they are homes for tenants. To be excluded from a significant portion of the homes available simply because you are in receipt of Housing Benefits cannot be considered as treating consumers equally. Tenants’ perceptions that they have been unfairly discriminated against underpin the significant number of the complaints received.

“TPO agrees that adverts which discriminate against would-be tenants in receipt of Housing Benefit should end. Making sure no one is excluded from applying for the home of their choice will go some way to reducing these complaints.”

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The safeagent accreditation business says it has helped secure the conviction of a rogue lettings agent who falsely claimed membership of
The National Approved Letting Scheme.

The business worked with Haringey council Trading Standards in an operation which ended with Matthew Estates being ordered to pay £12,630 by magistrates after being found guilty of five offences relating to false claims.

During the trial the court heard that following a visit by Trading Standards an email sent by the firm to the investigating officer contained false claims as to membership of The National Approved Letting Scheme – now safeagent – and another trade association.

Further checks revealed breaches on the firm’s website, and officers seized signs from the premises which falsely claimed NALS accreditation.

In sentencing, the magistrates stated the defendants had gained a considerable commercial advantage.

safeagent chief executive Isobel Thomson says: Cases like this are crucial to root out firms who put consumers at risk by passing themselves off as professional agents. We hope that more local authorities follow Haringey’s lead.”

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Despite the challenges being thrown up to the lettings sector by Coronavirus, this is a reminder that new MEES rules on energy efficiency in rental properties come into effect on April 1.

For some two years it has been a requirement under the Minimum Energy Efficiency Standards, MEES rules, for any new tenancies or tenancy renewals of properties rented in the private rented sector to have a minimum energy performance rating of ‘E’ on an Energy Performance Certificate.

It has therefore been unlawful for an agent or landlord to let a non-compliant property with an EPC rating of F or G.

From Wednesday of next week this will apply to all existing tenancies, even where tenants are staying in place.

This means that it will be unlawful to rent a property – regardless of whether it is a new tenancy, a renewal tenancy or an existing tenancy – which breaches the requirement to have a minimum E rating on an EPC and a landlord must carry out works to bring the EPC rating to E or above, unless there is an applicable exemption.

Legal firm Fladgate says: “If your property is caught by the EPC regime, you must comply with the MEES Regulations, unless you can rely on one of a few exemptions available to landlords, including but not limited to:

– Exemption due to devaluation – a temporary exemption of five years will apply if a landlord can demonstrate that the installation of energy efficiency measures would reduce the market value of the property by more than five per cent;

– Exemption for new landlords – if a person becomes a landlord recently or suddenly in specified circumstances under the MEES Regulations, a temporary exemption of six months will apply; and/or

– Third party consent – if a landlord cannot obtain necessary third party consents to improve the EPC rating of the property (including but not limited to len

der consent, superior landlord consent and/or tenant consent), then a landlord may let a “sub-standard” property.

An agent or landlord wishing to rely upon an exemption must register an exemption on the online Private Rented Sector Exemptions Register. Local authorities give and keep these fines and so are incentivised to enforce the legislation.”

Those who fail to comply face financial penalties, which vary depending upon the length of the breach.

A landlord renting out a non-compliant property (less than three months in breach) may be fined up to either £5,000 or 10 per cent of a rateable value up to a maximum of £50,000, whichever is greater.

A landlord renting out a “non-compliant” property (three months or more in breach) may be fined up to either £10,000 or 20 per cent of the rateable value up to a maximum of £150,000, whichever is greater.

There is also a fine of up to £5,000 for providing false or misleading information, or failing to comply with a compliance notice.

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Brent Council application to extend its selective licensing scheme in the wards of Willesden Green, Harlesden and Wembley Central have been rejected by Housing Secretary, Robert Jenrick MP.

The council had also hoped to extend the scheme to 10 new wards in the borough, following a consultation last year.

However, the government has said today more evidence would be needed before approval could be given.

Objections
The RLA objected to the plans during a consultation last year, on the basis the council already has the necessary tools to tackle poor housing management and conditions, it just needs to properly enforce them.

It has welcomed today’s news – which follows a similar ruling last month when an application by Liverpool City Council to renew its citywide landlord licensing scheme was rejected.

The RLA believes such licensing schemes are ineffective and brought in by councils who want to be seen to be doing something to tackle criminal landlords without actually doing anything to root them out, using them as little more than a cash machine.

Licensing is not the answer
John Stewart, policy manager for the RLA said: “We all want to see bad landlords driven out of the sector.

“However, licensing is not the answer. All it does is identify the good landlords who register and then tax them. They do nothing to flush out the criminals who stay under the radar.

“Instead, councils should use the wealth of data they can already access to find landlords and target resources to properly enforce the wide range of powers they have to deal with unsafe and sub-standard rented housing.”

Council ‘disappointed’
The council said it was ‘disappointed’ with the decision but has not given up.

Councillor Eleanor Southwood, Brent Council’s Cabinet Member for Housing, said: “Naturally we’re disappointed not to have gotten this done at the first attempt and frustrated at this setback in our aims to improve safety and drive up housing standards for the borough’s private tenants.

“If the government need to see more evidence then that’s exactly what we’ll do. We know that licensing works and that it benefits everyone: tenants, landlords and neighbourhoods.”

All privately rented properties in the wards of Dudden Hill, Kensal Green, Kilburn, Mapesbury and Queens Park are still required to be licensed, as well as any shared accommodation throughout the borough where there are three or more tenants living together who are not related – including those with a single tenancy.

The council said it is currently working with the government to understand what additional evidence is required. This will inform its next steps. In the meantime, the council says that work to improve safety and quality for private tenants will continue.

Written by Sally Walmsley

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Tenancy forms released overnight by the government appears to confirm that the notice period for evictions is extending from two months to three months.

However, there is no ‘complete ban’ on evictions during the Coronavirus outbreak as some commentators had anticipated.

Last week, the government pledged to introduce a ‘complete ban on evictions and additional protections for renters’ affected by Coronavirus – taken at the time to mean a complete ban on evictions being served.

But the Coronavirus Act which was given Royal Assent yesterday evening simply extends the notice required for possession from two months to three.

The new documents – updated model assured and secure tenancy forms – appear to confirm that, with an overarching government statement that says: “The prescribed forms that apply to secure tenancies have been changed to reflect the changes to possession procedures in the Coronavirus Act 2020. The amended forms now make it clear that court proceedings cannot begin earlier than three months from the date the notice is served.”

You can see the raft of paperwork issued by the government overnight here and here.

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The Citizens Advice charity is the latest organisation to call for more help for private tenants following what appears to be a U-turn by government on eviction policy.

As we reported earlier this week, a three month outright eviction ban pledged to renters by government spokespeople last week appears to have been watered down in the Coronavirus Emergency Bill passed by Parliament on Monday.

Last week, the government eviction policy pledged to introduce a ‘complete ban on evictions and additional protections for renters’ affected by coronavirus.  However, the Coronavirus Bill merely extends the notice required for possession from two months to three.

Now Dame Gillian Guy, the chief executive of Citizens Advice, says: “Last week, the Housing Secretary pledged ‘no renter who has lost income due to coronavirus will be forced out of their home’. These measures fall woefully short of that promise.

“Simply extending notice periods to three months cannot be seen as ‘job done’. It means that people dealing with unimaginable financial uncertainty still face the prospect of being served with an eviction notice.

“Over the coming days, the government must keep their promise and add to these changes to make sure no one loses the roof over their head as a result of coronavirus.”

Citizens Advice claims that government figures show 18,860 households have lost their homes in the past year due to rent arrears.

Some 44 per cent of those were due to a reduction in employment income, or a change in personal circumstances.

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Labour’s London Mayor, Sadiq Khan, has put his call for rent control plan powers at the heart of his campaign to be re-elected this May.

Khan – no doubt aware of the fact that some 2.4m Londoners live in private rented accommodation – put the rent control plan at the forefront of the launch of his campaign yesterday.

He says:  “The case for rent controls is now absolutely undeniable. But Tory ministers have blocked us from introducing our plans for rent controls in London and have simply said no.

“That’s why I am making the mayoral election on 7 May a referendum on rent controls – showing Londoners that I will stand up for renters.

“The prime minister will have to give us the powers we need, because if he refuses to do so he will be denying the express democratic will of millions of Londoners. And as we have all heard Boris Johnson repeatedly say himself, the democratic will of the people must be respected and it is not for politicians to frustrate it.”

However, professional bodies in the rental sector have long opposed rent controls and the the Residential Landlords Association and the National Landlords Association have issued a joint statement identifying a range of organisations that warn against the introduction of them.

For example, research by Knight Frank shows that last year in the capital there were 6.1 prospective tenants for every rental listing, up from 4.7 in 2018.

The Centre for Cities is warning that strict rent controls “would close off London to new residents” and the Resolution Foundation comments that holding down the true market price of private housing via rent controls rather than increasing housing supply is unlikely to succeed.

Professor Kath Scanlon, a housing expert at the London School of Economics last year warned that the Mayor’s rent control proposals would result in landlords simply deciding that they were no longer going to rent their properties.

The landlord associations’ statement says: “Rent controls might appear attractive to those already renting but they would be a disaster for anyone looking for somewhere to rent.

“All they would achieve, as history and experience elsewhere tells us, is to drive landlords out of the market exacerbating an already serious shortage of homes available. Instead of putting out simplistic and superficially appealing proposals in attempt to win votes, the Mayor should focus on boosting the supply of available housing using the powers he already has.

“Only then will he make any discernible impact on improving the affordability of housing across the capital.”

David Cox, chief executive of ARLA Propertymark, adds: “Rent controls do not work; it hits hardest those its designed to help the most, and the Mayor of London has failed to learn the lessons of history. The last time rent controls existed in this country, the private rented sector shrunk to the lowest levels ever recorded.

“At a time of demand for PRS homes massively outstripping supply, rent controls will cause the sector to shrink. In turn, this means professional landlords will only take the very best tenants, and the vulnerable and low-income people that rent controls are designed to help, will be forced into the hands of rogue and criminal operators, who may exploit them.”

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