Year: 2020

On 20th March 2020 the Homes (Fitness for Human Habitation) Act will be extended to apply to existing tenancies in England.

The law was introduced in March last year, to ensure rented homes are safe and secure-with tenants given the power to take their landlord to court if this is not the case.

Tenants who signed contracts on or after 20 March 2019 were able to use the act right away – landlords must ensure their property is fit for human habitation at the start of the tenancy and then maintain this standard throughout rest of the time the tenant lives in the property.

As of March 20, 2020 rules will be extended to cover existing statutory periodic tenancies in England.

What is meant by ‘Fitness for Human Habitation’?
It is important to note that fit for human habitation does not mean that there is a defect in the property. It means that there is a defect in the property that is so serious that a court considers the property to be unfit for that person to live in.

This is an important distinction because it means that the property has to be judged on the basis of the property condition as it is, and whether it is unsuitable for the actual person who lives in it as opposed to the generic tests applied by local authorities using the Housing Health and Safety Rating System. As a result, a younger, fitter tenant living on their own would have a higher threshold for what is unfit for them to live in than an older person or someone with a young family.

Written by Victoria Barker

Blog Post from Residential Landlords Association

See details of our Guaranteed Rent Scheme here

New regulations mean high risk rental properties may not have legally binding electrical safety cover for a prolonged period of time.

That’s the warning today from the Residential Landlords Association.

Regulation changes coming into force in June will remove the obligation for landlords to carry out electrical safety checks in Houses of Multiple Occupation – high risk rental properties.

The obligation under the new rules will not apply until a tenancy is renewed or April 2021, whichever comes first.

The RLA warns this will mean some rental properties will be under no legally binding electrical safety regime for the interim period, leaving tenants without the assurance that properties are safe.

The new plans, which have been presented to Parliament for agreement, also contain weaker penalties for landlords failing to keep the properties they rent safe and complicate the process by which local authorities can issue penalties, making enforcement more difficult.

The Residential Landlords Association has written to the Ministry of Housing to express its concerns about “the loophole being created for irresponsible landlords who otherwise would not carry out these checks.”

It is calling on the government to delay the implementation of the new framework to provide time to address the problems being caused.

RLA policy director David Smith says: “Good landlords don’t need to be told to carry out safety checks but these changes to regulations leave tenants vulnerable to those landlords who are not so responsible. It is essential for the safety of tenants that the loophole being created is closed and we urge the government to delay implementation until that happens.”

Blog Post from Letting Agent Today

See details of our Guaranteed Rent Scheme here

The Association of Residential Letting Agents has been informed that the controversial Right To Rent checks forced on to agents and landlords to conduct will remain unchanged when the new points-based immigration system is introduced.

From January 1 2021 the EU’s freedom of movement policy will come to an end, following the expiry of the UK’s Brexit withdrawal transition period.

However, ARLA says that the government is no closer to determining the future of Right To Rent – it merely says the current approach will remain in place next year.

The points-based system will require all applicants, from the EU and beyond, to demonstrate that they have a job offer from an approved sponsor, that the job offer is at the required skill level, and that they speak English.

In addition, if the applicant earns more than the minimum salary threshold then the individual would be eligible to make an application. If they earn below the required minimum they may still be able to come if they have a job offer in an occupation designated as being in need of additional expertise, or that they have a PhD relevant to the job.

“The government has clarified to ARLA Propertymark that agents should continue to undertake right to rent checks on EU nationals as you do now. There is no requirement for landlords or letting agents to determine an individual’s income/salary threshold before entering into a tenancy agreement” says a statement on the ARLA website.

EU citizens living in the UK on December 31 this year are eligible to apply to the EU Settlement Scheme and will have until June 30 2021 to make an application.

“As a transition measure, employers, landlords, and public service providers will continue to accept the passports and national identity cards of EU citizens as evidence of permission during this period, up until June 30 2021” explains ARLA.

The association adds: “We continue to remind the Home Office that as the UK transitions to new immigration arrangements, agents will not be able to determine which of their existing tenants are EU or Swiss nationals. We remain part of the Home Office’s Landlord Consultative Panel intending to ensure that certainty for tenants, landlords, and agents is achieved as soon as possible in the lead up to Brexit.”

Blog Post from Letting Agent Today

See details of our Guaranteed Rent Scheme here

The government is driving landlords into the Airbnb Short Lets sector according to a trade body.

The Residential Landlords Association, responding to recent reports highlighting the proliferation of Airbnb-style short lets, says tax changes brought in by the current and recent governments have forced landlords to consider ways of recovering their income.

The full impact of the restriction of mortgage interest relief to the basic rate of income tax applies from April, says the RLA, making many landlords significantly worse off or even unable to make a profit on their lettings.

This change does not apply to landlords with short-term lets so encouraging long-term landlords to move into that market.

According to the association there is mounting evidence that this, along with the three per cent stamp duty levy on the purchase of extra housing and other measures affecting landlords’ confidence, is causing a drop in the supply of long term rented homes when demand continues to increase.

Some reports claim as many as 25 per cent of homes in some areas are now listed on Airbnb.

David Smith, policy director for the Residential Landlords Association, says: “Government policy is actively encouraging the growth of holiday homes at the expense of long-term homes to rent which many families need.

“This is completely counterproductive, making renting more expensive and undermining efforts to help tenants save for a house of their own.

“The Chancellor must use his Budget to give tenants a better deal by supporting good landlords to provide the homes to rent that they want to live in.”

Blog Post from Letting Agent Today

See details of our Guaranteed Rent Scheme here

A London council says nearly half of the Airbnb style properties available in its patch last year exceeded their legal 90-night letting allowance.

Camden council collected data on entire homes available for short term let throughout 2019 and of the approximately 7,100 homes available, about 3,400 – some 48 per cent – exceeded the 90-night allowance.

The council says this represents over half of the homes needed in the borough to help the 6,000 families on the council’s housing waiting list.

However, the council admits that it is difficult to effectively locate Airbnb style properties being used for short term let.

A statement from the authority says: “Avoidance tactics such as listing a property across multiple sites, using different locations and different photos make it harder for local authorities to effectively enforce breaches of the de-regulation act, which allows properties to be rented for up to 90-nights without applying for planning permission.”

Therefore, the true extent to which the short term let market is being exploited remains a hidden issue and often only comes to light when residents are frequently disturbed by tourists, says the council.

Now the council wants a mandatory register or licensing system for short let properties so that the 90-night law can be properly enforced.

Camden council plans to introduce a short let pilot scheme later this year, in which the authority will work with residents on finding properties in short let use and raising awareness of the 90-night limit.

A spokesman says: “Homes are being lost at a time of significant need and most short term lets are two to four bed properties, the very same properties that are desperately needed by local families. Without these properties available locally, a knock-on effect is felt as prices remaining sky-high and desperate families go on being trapped, unable to move on from often unsuitable and overcrowded conditions.”

“However, there is only so much that we are able to do within the current system that is too easily exploited. Multiple listings, different addresses and different photos all for the same property make enforcement near impossible while our housing supply is being quietly decimated.

“Often unscrupulous businesses, breaking the law, are making serious money while local residents see ever higher rents and ongoing disturbance.”

Blog Post from Letting Agent Today

See details of our Guaranteed Rent Scheme here

Two bedroom properties are the optimum property type for buy to let investors according to the latest research.

Lettings management platform Howsy has looked at current rental yields across one bed, two bed, three bed and four-or-more bed properties; it’s assessed the average cost of buying each property type and the average rent they command.

The research shows that across England, two-bed properties make by far the optimum property type investment option with the average yield at 4.8 per cent.

This compares to 4.1 per cent for a one bed, 4.5 per cent for a three bed and 3.6 per cent for properties with four or more bedrooms.

It also seems that investing in a two bed up north is a better bet to maximise those rental yields with the North East seeing the highest average yields for a two bed property at 5.5 per cent.

The North West is the next best option with the average rental yield for a two bed at 5.3 per cent, followed by Yorkshire and the Humber on 5.2 per cent.

The average rental yield for a two bed in London currently sits at 4.5 per cent.

Howsy chief executive Calum Brennan says: “As a landlord, maximising the profitability of your buy to let investment is as vital now as its ever been and property size and type are as important as location when it comes to doing so.

“While the two bed property is traditionally the most popular amongst tenants and landlords due to the additional size without going overboard on costs, there is a slight regional variation in the capital.

“This is of course, due to the high rents you can secure in London even on a one bed and the overwhelming demand for properties that have seen even the smallest ‘studio flats’ rent for above average prices.”

Blog Post from Letting Agent Today

See details of our Guaranteed Rent Scheme here

Despite the demand for rental properties from capital landlords being at an all-time high, on average, they are sitting empty for an average of 24 days.

Newly released research from London prop-tech lettings company, Home Made, reveals that this is reducing the options for tenants looking to move home and also impacting rental income for capital landlords.

The period of time where a property sits empty between tenancies varies across the city. In Hounslow and Camden, the average time it takes to fill an unoccupied property is 15 and 17 days respectively. However, in Havering and Bexley, the average time is 37 and 33 days. This lag time cost London landlords £730M in lost rent in 2019.

One of the key reasons properties lay empty is down to the lag time between a tenant handing in their notice and the time it takes a traditional letting agent to find new tenants. The study reveals that it takes on average 24 days for a London agency to let a property from the point they start their marketing efforts. Furthermore, the research reveals a six-day delay to agents marketing a property once tenants have served notice, thereby increasing the risk of a lengthy void period.

This study suggests that traditional methods to fill rental properties are not working in the interest of landlords, at a time when they are facing mounting financial and regulatory pressure.

Asaf Navot, founder and CEO of Home Made, comments: “Empty rental properties are hurting everyone. Landlords are needlessly losing value on their investments and tenants are missing out on the home of their dreams. Our research shows that inefficient agency models are one of the driving factors keeping London homes unoccupied.

“Landlords are paying agencies for a service and if they are not delivering, they need to hold them to account. We’d urge landlords to ask their letting agent for transparency at every stage, from the date their property will be available online, through viewing volumes and feedback, all the way to move-in date.

“At Home Made we make this information readily available for landlords to track so they can ensure that every detail from appealing imagery to negotiating contracts is handled efficiently and as if the property were our own.”

Blog Post from Property Reporter

See details of our Guaranteed Rent Scheme here

Tenant demand for residential property is set to grow over the next 12 months according to newly released research by Paragon.

The research reveals that nearly four out of ten landlords believe that tenant demand for residential property will increase during the next 12 months and comes on the back of a strong end to 2019, with 27% of landlords experiencing an increase in tenant demand.

Paragon’s Trends research found that 37% of landlords expect tenant demand to grow during 2020, compared to 7.3% predicting a fall.

The Government’s recent English Housing Survey found that the number of households in the Private Rented Sector has remained unchanged at 4.6 million, or 19% of all housing tenures.

However, the length of time households are staying in private rented property is increasing, from an average of 4.1 years to 4.4 years. The report also found that over the past decade, the proportion of 55-64 year-olds in private rented accommodation increased from 7% to 10%.

Richard Rowntree, Paragon Managing Director of Mortgages, said: “Although homeownership is increasing on the back of Government policies, there is clearly still growing demand for rented property for a variety of reasons.

“We expect to see tenant demand to continue to increase in the coming years and it’s important the Private Rented Sector is adequately financed to ensure tenants have a good choice of property and rental inflation is kept under control.”

Blog Post from Property Reporter

See details of our Guaranteed Rent Scheme here

There’s a new warning today for investors who will be hit by the buy to let tax changes coming into effect on April 6.

From that date BTL landlords will not be able to rely on the principal private residence relief and sell a property under the old rules.

Instead the new requirements will leave them just 30 days to settle any capital gains buy to let tax due after completion instead of anywhere between 10 to 22 months under the current regime.

Law firm Collyer Bristow warns that the changes are little understood by the lettings sectors and failure to comply could leave landlords open to stiff penalties.

James Cook, a partner at the firm, says: “Under the current rules, anyone selling a property has until 31 January in the following tax year to file and settle any CGT liability, giving them potentially up to 22 months.

“From 6 April 2020, all CGT liabilities will need to be settled in just 30 days of completion of a sale. That leaves very little time to calculate the tax to be paid, report the gain, and pay tax. It is likely to catch out many second homeowners and investors who have either failed to plan for the tax charge or do not have the available cash.”

For higher rate income tax payers, the rates for CGT are currently 28 per cent on gains from residential property and 20 per cent on gains from all other chargeable assets.

Conversely, the CGT rates for basic rate income tax payers are 18 per cent and 10 peer cent respectively.

The annual capital gains tax allowance is set to increase on 6 April 2020 to £12,500 from £12,000 now.

Late filing of CGT returns will leave individuals facing an immediate £100 fine with an additional penalty of the higher of £300 or five per cent of the tax due if it’s over six months late.

A further penalty of the higher of £300 or five per cent of the tax due is payable if more than 12 months late.

Cook adds: “The changes were first announced in 2015 but have been pushed back as HMRC was concerned that second homeowners and investors were not aware of the changes. From conversations with our clients, it appears that they are still not fully aware of the implications of the change.”

Blog Post from Letting Agent Today

See details of our Guaranteed Rent Scheme here

A survey by lettings agency Carter Jonas has revealed what the firm calls the top priorities for tenants as the 2020s begin.

The survey – taken at the end of last year – consisted of only 300 renters but Carter Jonas has shared the findings with Letting Agent Today.

In broad terms, high speed broadband is the most in demand ‘essential’ for a rental property, even more so than a modernised kitchen or bathroom; however, when ranked on what tenants would be prepared to pay more for, newly-refurbished kitchens and bathrooms come top.

Tenants are routinely more likely to move from a property due to relocation preferences rather than an issue with the property itself. And energy efficient properties have moved up the priority list for both flat and house renters.

Here is what Carter Jonas found as top priorities for tenants, ‘essentials’ for renters of apartments:

1. High speed broadband;

2. A modern kitchen/bathroom;

3. Allocated parking.

And the three least important features are:

1. Outside space;

2. Blackout blinds/curtains;

3. Property alarm.

Meanwhile the top three essentials for house tenants are:

1. High speed broadband;

2. Off-street parking;

3. A modern kitchen/bathroom.

And the three least important are:

1. Fitted wardrobes

2. Blackout blinds/curtains

3. Property alarm

Then Carter Jonas asked its tenants to list features considered worth a premium.

For flat tenants the top three features worth paying more for were:

1. A newly refurbished kitchen and bathroom;

2. Outside space;

3. Allocated parking.

And the three features they’re least willing to pay for were:

1. Communal leisure amenities;

2. Work space;

3. Concierge service.

Finally the top three features that house tenants were willing to pay more for were:

1. A newly refurbished kitchen and bathroom;

2. A more energy efficient property;

3. A garage.

And the three features they’re least willing to pay more for:

1. Air conditioning;

2. Property alarm;

3. Media/family room.

Blog Post Letting Agent Today

See details of our Guaranteed Rent Scheme here