Month: March 2020

The Government has announced a change to the way landlords carry out ‘right to rent’ checks during the coronavirus outbreak. The right to rent scheme requires landlords to check that all tenants who are living in their properties have the correct legal status to live in the UK. But last night the Government said, with immediate effect, the Home Office will no longer require landlords to see original ID documents and will allow checks to be undertaken over video calls. From today, prospective renters can submit scanned documents, rather than originals, to show they have a right to rent.

Despite this relaxation of the rules, these checks are still necessary and it remains an offence to knowingly let a property to anyone who does not have legal immigration status in the UK. So if a prospective or existing tenant can’t provide any of the accepted documents, landlords should use the Landlord Checking Service for their own peace of mind and to avoid legal action being taken against them.

PlanetRent, our free automated lettings app is designed to help landlords with their right to rent checks and make the whole process easier. PlanetRent keeps a log for you of right to rent checks being accepted and reminds users that this is a mandatory requirement. The app also enables users to keep passports & visas on record and warns landlords if they expire.

The Government gave no indication of how long these changes might be in place. However, Home Secretary Pritt Patel made it clear that once the temporary changes end, landlords and employers will be asked to carry out the full checks on those tenants who rented a property during the pandemic.

Landlords can read the full guidance here to find out what this means for you.

A complete ban on evictions and ‘additional protection’ for renters have been announced, coming into force from today. But what does this mean for landlords and tenants in reality?

First, the court service has now suspended all possession hearings. This means that no cases that are already in the system  – or those due to be heard – can be taken to the stage where a landlord can evict a tenant. No evictions will now take place for any reason and the ban will initially last for 90 days, but it might be extended if necessary. 

According to Landlord Today, “The Government has taken this measure to protect private and social renters, as well as those with mortgages and those with licenses covered by the Protection from Eviction Act 1977”. The new measures will apply to landlords and tenants in  England and Wales.

However, it is important for renters to note that these new government guidelines clearly state that tenants are still liable for their rent and they must do all they can to pay their landlord as usual. If renters find themselves in financial hardship due to the impact of the COVID-19 outbreak and are struggling to pay their rent, Government support is available. Go to the www.gov.uk website to find out more about the package of support that is being delivered by the Government in response to the pandemic. 

However, if a tenant does think they will have problems sticking to their rental agreement, the first step is to speak to their landlord. The Government is actively encouraging landlords and tenants to speak to each other and work together to put in place a sensible – and affordable – payment scheme. This is something that we wholeheartedly support.

The Government’s aim in all this is clear. As Housing Secretary Robert Jenrick said: “no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.”

With new rules in place, landlords will now have to give their tenants three months’ notice if they want to end the tenancy. To clarify, this means the landlord can’t apply to even START the court process until the end of this three-month period. 

The biggest question for tenants who may find themselves out of work or laid off without pay due to business closures caused by the coronavirus is, how do I pay my rent? To try and tackle what is likely to be a widespread problem, the Labour party has published draft legislation of its own ahead of the government’s emergency bill, which goes before Parliament this week.

Leading property lawyer Justin Bates of Landmark Chambers has been heavily involved in drafting the legislation. Giles Peaker who also “had a bit of a hand in this” has posted the details of Labour’s proposals on the Nearly Legal website.

The aim of the Landlord and Tenant Temporary Provisions Bill 2020 – Coronavirus emergency rent relief,  is to establish that “for assured, assured shorthold, secure or Rent Act tenants, where there was failure to pay contractual rent that was in any way related to the effects of the coronavirus during a designated period, this would not count as rent lawfully due for the purposes of the relevant rent arrears grounds of possession”.

This does not mean that tenants don’t have to pay their rent. Arrears would have to be paid eventually. But they could not be used as a reason to start possession claims, now or in the future.

Giles Peaker also points out that, “Where the tenancy may be subject to a section 21 notice, this draft [bill] does not stop potential service and proceedings under s.21, as it is impossible to establish the reasons for a section 21 (and some uses of it may be for such things as recovering an abandoned property)”.

The Residential Landlords Association (RLA) and the National Landlords Association (NLA) are also calling for a package of measures from government and mortgage lenders to support tenants and landlords affected by the coronavirus. This includes:

• temporary scrapping of the five-week wait before Universal Credit claimants get their first payment,
• pausing the final phase of restricting mortgage interest relief to the basic rate of income tax, and
• ensuring lenders look sympathetically on requests by landlords for mortgage payment holidays where their income is being affected through reduced or non-payment of rent.

The Acorn union which supports tenants, workers, and residents, is also calling for a “rent holiday” and to protect tenants from the threat of eviction.  

In the meantime, the situation with possession claims in general, including section 21 based claims, remains unclear. Like most aspects of business over the next weeks and months, it will be a case of wait and see. The Grenfell Inquiry was halted yesterday as one key player needed to self-isolate and two others are over 70 and have been advised to stay at home. If this scenario, as seems likely, is played out across the courts then there will be no way to pursue claims for repossession on any grounds for perhaps many months to come.

London Mayor Sadiq Khan launched his re-election campaign today. He is hoping to win votes by promising Londoners that he will introduce rent control in the capital if he is voted in for a second term in May. Speaking in Hackney, the Mayor said that if he wins a second term, that would give him an “undeniable and irresistible” mandate to enforce rent controls.  

But there is a problem with this pledge: capping rents is not something the Mayor has control over. Rent control has to be agreed by central government and there is nothing to suggest that this policy would be acceptable at Westminster. It would also put him at odds with landlords, with the Residential Landlords Association and the National Landlords Association calling out the policy as”disastrous”.

Sadiq Khan claims he has “massively increased” affordable homes in London but has been blocked from making private rent more affordable. However, rival Tory mayoral candidate Shaun Bailey said rent controls always led to higher rents.

The other candidates in the race are also promising to improve the London housing market:

• Liberal Democrat Siobhan Benita plans to bring thousands of empty homes back into use and use TfL -owned land to build rental homes;
• Green Party candidate Sian Berry would freeze rents;
• Independent candidate Rory Stewart pledges to establish a Mayor’s Building Company to build hundreds of thousands of new homes; and
• Tory candidate Shaun Bailey promises to build new homes in London via a City Hall-controlled building programme that would assume control of the building process in London.

Maryanne Bowring, Group MD at Ringley has consistently argued against rent control. Commenting on the London Mayor’s pledge, she says: “Rent controls have time and time again been proven not to work in cities across the world. The war on landlords by all sides needs to stop. The biggest casualties will be renters being forced to pay more as buy-to-let investors sell up after facing the threat of reduced returns: they already have to grapple with harsher regulation, extra stamp duty, and reduced mortgage relief.

 “Build-to-rent will bring much-needed supply but still only makes up a fraction of the market and any form of rent control will discourage further investment into the sector, reducing the supply of potential new rental homes.”

Maryanne’s view is that London has a huge unmet demand for rental properties and any policies that restrict new supply – like rent controls – will only force rents to rise. “This could lead to the creation of a rental black market,” she says.