Councils tell tenants to wait for bailiffs before moving out

An alarming number of private tenants are being told by their local council to ignore eviction notices served by their landlords – and to wait for bailiffs to turn up before moving out – in order to qualify for rehousing support, according to new findings*

Half (49 per cent) of tenants who’ve been served with a section 21 notice by their private landlord say they have been told to ignore it by their local council or an advice agency such as Shelter or the Citizen’s Advice Bureau (CAB).

The figures shine a light on the scale of the issue, which was recently highlighted by the Telegraph, and has been exacerbated by the increasing use of private landlords by local authorities to discharge their housing duties.

The NLA says that the advice is increasingly being offered because councils are refusing to accept tenants’ housing applications before an order for possession has been granted by a Court, despite guidance from Central Government that confirms all housing applications should be accepted from the time notice is served on the tenant.

NLA Chairman Carolyn Uphill said:

“We’ve always known that tenants receive this kind of advice and it’s a huge problem because it damages the confidence of landlords who work in the community to home those who aren’t able to access social housing.

“There is no justification for prolonging the stress and uncertainty brought by a possession case. Advice like this creates unnecessary strain on tenants, landlords, and the Courts Service, which must first hear the case and order possession before Councils are prepared to carry out their statutory duties.

“Nobody should ever be told to wait until the bailiffs turn up; it makes an already unpleasant situation much worse for everyone and creates a vicious cycle of misery and spiralling costs for all involved”.

- See more at: http://www.landlords.org.uk/news-campaigns/news/councils-tell-tenants-wait-bailiffs-moving-out#sthash.qN5rFCin.dpuf

Landlords could be sitting on £514m of unprotected deposits

Financial website money.co.uk has claimed that 284,000 landlords have failed to protect tenants’ deposits, amounting to £514m in unprotected funds. It has also called for a national register of landlords.

Money.co.uk commissioned the Centre for Economics and Business Research (CEBR) to carry out research into deposit protection.

It concluded that with approximately one in five (4.6 million) households in the UK now privately rented and the average protected deposit at £1,040, the total value of deposits paid by tenants and placed in protection schemes by landlords has now reached a whopping £3.2 billion. 

But despite the risk of fines for landlords who fail to protect their tenants’ deposits, money.co.uk claims 15% are still failing to do so. The site claims these landlords are together earning up to £8.5 million a year in interest on unprotected money, while leaving themselves and their tenants with no third party protection when their agreement comes to an end.

It is mandatory for all landlords to protect deposits for assured shorthold tenancies via a government backed tenancy deposit scheme within 30 days of receipt. Landlords must also give tenants prescribed information about where their deposit is protected, who they are renting from and how they raise a dispute. 

The schemes give landlords and tenants access to a free dispute resolution service if things go wrong when the tenant moves out, eliminating the need for court action in many cases. 

Hannah Maundrell, editor-in-chief at money.co.uk, said: “Renting is a money minefield and with troubled times ahead for the buy-to-let market, the problems caused by ‘dodgy landlords’ are only likely to get worse. While many landlords are doing the right thing and protecting deposits in one of the official government backed schemes, a worrying amount of money is falling through the cracks and far too many tenants are being left vulnerable.

“Renters must take control and ask landlords which protection scheme their money will be stashed in before signing on the dotted line. Existing tenants must ask for proof their money is protected if their landlord hasn't given them the correct written documentation.

“It’s not right that tenants are left responsible for taking their landlord to court if their deposit hasn't been protected. The government needs to step in and take decisive action. Introducing a compulsory register listing every landlord that rents out property in England and Wales would be a start. This works for Scotland and Northern Ireland and it seems crazy this hasn't been brought in across the UK. Add in tenants’ ratings and reviews to this too and you have both the beginnings of a solution that helps renters make an informed choice about who they’re handing over buckets of cash to; and the foundation for policing landlords that are currently going unchecked.”

https://www.landlordtoday.co.uk/breaking-news/2016/1/money-site-claims-landlords-sitting-on-514m-of-unprotected-deposits

UK annual house price inflation at 4.4%, stronger in Southampton?

House price growth remains steady in January

· House prices increased by 0.3% in January

· Annual house price growth broadly stable at 4.4%

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “The pace of UK house price growth remained broadly stable during January. Indeed, annual house price growth has remained in a fairly narrow range between 3% and 5% since the summer of 2015. This trend was maintained in January, with house prices up 4.4% over the year, broadly in line with the 4.5% increase recorded in December. “As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level. The labour market appears to have significant forward momentum. Employment has continued to rise at a robust rate in recent months and, while the pace of earnings growth has slowed somewhat, in inflation-adjusted terms regular wages continue to rise at a healthy pace. “With this trend expected to continue and with interest rates also likely to stay on hold for longer than previously anticipated, the demand for homes is likely to strengthen in the months ahead. “The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.

Indeed, the market is already characterised by a shortage of stock, with the Royal Institute of Chartered Surveyors reporting that the number of properties on estate agents’ books remains close to all-time lows.”

http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/2016/Jan_2016.pdf

Early-morning immigration raid leads to £15,080 bill for landlord

A landlord has been fined for breaching regulations for houses in multiple occupation following an early morning raid involving immigration enforcement officers.

As a result, a London-based landlord, Selvakumar Francis, has appeared in court on charges connected with the condition and overcrowding of his property in Cambridge. 

Magistrates heard evidence that Francis had allowed the property to deteriorate and had not put in place basic fire safety precautions. Officers identified a number of defects that amounted to nine breaches of the Management of Houses in Multiple Occupation (England) Regulations 2006.

Francis pleaded guilty to the offences, was fined a total of £13,500 and ordered to pay the council’s costs of £1,460 plus the £120 Victim Surcharge – a total of £15,080.

During the inspection, officers from Cambridge council found that the fire detection system was inoperative with no fire detection to the kitchen or lounge. In addition, a fire door had been removed or not installed which, combined with the lack of fire detection to the downstairs area, meant that the tenants would not have been aware of any fire and would have been trapped in their rooms if fire broke out.

The hallway, which is the main escape route, was cluttered with three bikes, a mattress and several packs of laminate flooring.

There were eight beds within the three-bedroom property but only one toilet available for all of the occupiers. One of the rooms being let out was only 5.5 square metres and had a bunk bed put in it. The other two bedrooms had three beds in each room. One of these beds was broken and there was only one electrical socket for the three occupants to use, resulting in multiple electrical extension sockets being used, and increasing the risk of fire.

The magistrates said Francis was negligent and his actions “had a significant effect on human health and quality of life.”

 https://www.landlordtoday.co.uk/breaking-news/2016/1/early-morning-immigration-raid-leads-to-15-080-bill-for-landlord

Landlords say “reasonable chance” of judicial review of BTL tax change

The two landlords behind a campaign to seek a judicial review of George Osborne’s controversial mortgage interest tax relief change say they have been told there is a “reasonable chance of success.”

Landlords Steve Bolton and Chris Cooper have sought the advice of a legal team including Cherie Blair QC on the chance of securing a review of section 24 of the Finance (No. 2) Act 2015 - which includes the proposed restriction of mortgage interest tax relief at a basic rate, even for higher rate-paying landlords.

“The next step is for our lawyers, Omnia Strategy LLP, to send a letter outlining our case to the government with a view to commencing judicial review proceedings” says the landlords on their Facebook campaign page.

Bolton, whose Platinum Property Partners business has £200m of residential property in its portfolio, is working with fellow landlord Cooper to mount a legal challenge on behalf of around 250 investors in the PPP network.

The pair launched their campaign just before Christmas, quickly securing £50,000 through crowd-funding to get the initial legal advice and launch the challenge. 

The pair say on their Facebook page: “The Finance Act 2015 includes Clause 24, which overturns a fundamental financial business principle, where INCOME less COSTS equals PROFIT. The current government sees fit to change this tried, tested and proven commercial formula. In simple terms, the government believe that it makes complete sense to tax property owners on that part of the rent that has been paid to the lender as mortgage interest, as if that money was still in the property owners’ bank account!"

https://www.landlordtoday.co.uk/breaking-news/2016/1/landlords-say-reasonable-chance-of-judicial-review-of-btl-tax-change

Rents rising at quickest pace for four years - is your Southampton buy 2 let returning more?

Rents in England and Wales rose at their fastest pace for four years in 2015 putting extra strain on household finances. The buy-to-let index from agents Reeds Rains and Your Move said the average rent hit £794 per month after increasing by 3.4% over the year, the highest rate since 2011 when it was 4%.

Inflation averaged at around 0% for the year, while wage growth came in at around 2%, meaning rents are rising much faster than both A shortage of housing supply in some areas of the country, particularly London and the south east of England, is driving up house prices and rents. The ONS said house prices in England rose 8.3% in the year to November 2015 to an average of £302,000. House building is running at around half the level needed to meet demand.

"Rents reacted strongly in 2015, powered by welcome warmth from household earnings, and growing pressure from supply – the more troubling lack of housing in the UK," said Adrian Gill, director of estate agents Reeds Rains and Your Move. "The combined force is skywards for rents. Such growth in rents is a mixed bag. The fact that the majority of tenants can afford higher rents is certainly good news, and should be seen as a positive indicator as we enter 2016. Yet over the longer-term, higher rents also raise a serious challenge for the future affordability of housing in this country. Everything else will need to keep up."

Chancellor George Osborne, who wants to increase home ownership in the country, has targeted the unpopular buy-to-let sector with a 3% levy on top of normal stamp duty rates for the purchase of additional property. The new tax should come in on April 1, 2016, after he announced it in the autumn statement. It followed his scrapping of a relief for buy-to-let investors that allowed them to offset mortgage interest payments against their income tax bills.

Gill warned against the moves by Osborne. "Last year also demonstrated how the cost of renting a home has begun to diverge from the wider cost of everyday living, as measured by standard rates of inflation," he said. "Again this demonstrated that maintaining the success and the current affordability of private renting will depend on the main issue at hand – getting more properties onto the market. Into 2016, all layers of government, regulators and lenders should be taking every opportunity to help the flow of much-needed investment in buy-to-let – far from some of the recent political moves to discourage landlords."

Buy-to-let lending has surged as investors rush to beat the new tax year. The Royal Institution of Chartered Surveyors (Rics) and the Council of Mortgage Lenders (CML) have both reported a spike in buy-to-let demand at the end of 2015, after Osborne unveiled his planned tax hike. The CML reported a 35% annual leap in gross buy-to-let lending in November 2015, when 23,300 mortgages were issued. It said the value of gross buy-to-let lending jumped 46% year-on-year in November to £3.5bn.

http://www.ibtimes.co.uk/uk-housing-rents-rising-quickest-pace-four-years-serious-challenge-affordability-1539367

The Southampton Property market in 2016 and beyond!

A question I often get asked is how the Southampton property market will perform, particularly when you look at how stocks and shares have performed recently! As we all know property values are both a national obsession and a key driver of the British consumer economy.  So what will happen next in the property market?

Before we look to the future you need to look at what has happen over the last five years.  One of the key drivers of the housing market and property values is unemployment, as it drives confidence and wage growth – key factors as to whether people buy their first house, existing homeowners move up the property ladder and even buy to let landlords have an appetite to continue investing.

When the Tory’s came to power in 2010, the total number of people unemployed in Southampton stood at 2,058 (4%) Last month, this had dropped to 813 people.

As the Southampton job market has improved with better job prospects, salaries are rising too, growing at 3.4%p.a. - their highest level since 2009.  That is why, even with the turbulence of the last few years, property values in the Southampton are now 10.06% higher than they were five years ago.

Many homeowners have held back moving house since 2007 following the Credit Crunch but with the outlook improving, I expect some to seize the opportunity to move home, releasing pent up demand as well as putting more stock onto the market. With a more stable economy in the City, this will, I believe, drive a slow but clearly defined five year wave of activity in home sales and continued house price growth in Southampton.

My expectation is that Southampton property values will increase by 21.9% by 2021. Now that might sound optimistic to some, however values are currently rising in Southampton at 5.5%p.a. This forecast reflects both the positive and negative factors of our local market and the wider UK economy as whole.

So what about those negative factors that may affect the future of the property market.  Well the number of properties for sale in Southampton is lower than it was five years ago, restricting choice for buyers (but this can keep prices higher). Interest rates were being predicted to rise around Easter, but now I think it will be nearer to Christmas and finally the new buy to let taxation rules which are being introduced between 2017 and 2021 and of course the stamp duty changes for second home owners.

Investors that I speak to, know that with interest rates at their current level, the cash in their Building Society or Bank accounts is falling in value! Property prices, by contrast, have grown over the years, even after the property crashes, far outstripping bank accounts and inflation.

Property is a long term investment, it has its’ up and downs, but it has always outperformed, in the long term, most investments. Whether you are a first time buyer in your 30’s, trading up as the kids grow or you are looking to plan for your retirement I feel the Southampton property market will produce good medium to long term returns.  Just make sure you buy the right property, at the price in the right location, whatever your investment goal.