End of evictions ban delayed – but what will happen when furlough ends?

Another extension to the evictions ban – but the government now needs some fresh ideas.

On Friday, as many suspected it would, the Government extended the evictions ban until 20 September. So another month will pass during which possessions cases cannot be processed by the courts. A short stay of execution for renters in financial difficulty and more pain for property owners facing arrears. Landlords now need to give six months’notice of eviction to tenants and the Government says it “will continue to work with the judiciary and stakeholders to ensure that the courts are prepared for eviction cases to be heard safely” once the ban is finally lifted.

This latest extension takes us comfortably into the next session of Parliament, which sits again from 1 September. We hope there can then be proper and urgent debate around ways to support both renters and landlords, who are equally compromised by the current situation.

What is even more worrying, is what will happen when furlough ends in October. Will there be yet another U-turn? Or an extended scheme for certain parts of the economy such as hospitality and the arts, which continue to suffer from severe economic problems? If not, we will be facing another, more extreme cliff edge as companies have to make difficult decisions about bringing staff back to work – or not.

According to the Office for Budget Responsibility, up to 20% of furloughed workers could become unemployed when the scheme ends on 31 October. This has huge implications for landlords as the Joseph Rowntree Foundation calculates that 1.5million private renters are being paid by the state and up to 300,000 risk losing their jobs when employers have to start paying wages again.

Over the weekend the Telegraph identified the parts of the country where landlords are most  of risk of finding their tenants unemployed and potentially in rent arrears. Areas with a strong emphasis on manufacturing are likely to be hard hit, as well as those places where tourism accounts for large numbers of jobs. Read the full article here https://apple.news/A7KDwVVQyTgWChg-03OEWow

In the meantime, a £500 million Hardship Fund will provide council tax relief to vulnerable people and households to help those affected most by Coronavirus and Universal Credit and Housing Benefit have increased. Local Housing Allowance rates will now pay for at least 30% of market rents in each area. But for many that will not be enough and landlords will be expected, once again, to take up the slack.

Let’s hope the government has something inventive up its sleeve for the next session of Parliament to provide a safety net for those on both sides of the rental equation who find themselves in financial difficulty. We anticipate that some fresh inspiration will be badly needed.

Two good reasons to rent to students

Student demand for rental homes is high

New research published this week reveals good returns for landlords who buy properties near universities to rent to students. Good news for buy-to-let investors. But not everyone is keen to rent a home to students. Key issues are likely to be additional wear and tear on fixtures and fittings and the expectation that your property will be let fully furnished.

However, there are two good reasons to consider student tenants. First, demand for a rental property in university towns and cities is consistently high, and second, students are likely to want at least a 12-month contract, so you may not need to change tenants or market your property so frequently.

Despite the recent exam results fiasco and the prospect of Covid-driven online learning for many of this year’s under-graduates, demand is still expected to be high for student rentals. So which areas are currently generating the best yields? 

Landlord Today reported this week that “on average, university rental yields sit at 4.4% across the UK”. The most profitable returns are in Scotland, with best buys close to the University of Dundee where rental yields in the DD1 postcode could be as high as 7.2%. The University of Aberdeen comes in second with an average yield in the AB24 postcode at 6.8%, while the University of Strathclyde and the G1 postcode average rental yields of 6.6%.

In England, the University of Leicester is reported to be the best buy-to-let prospect. Yields average 6.6% in the LE1 postcode. Aston University in Birmingham also presents good rental opportunities (6.5%) together with the University of Leeds (6.41%), Nottingham Trent University (6.4%), Newcastle University (6.3%) and the University of Liverpool (6.1%). In Wales, Cardiff University has a yield of 5.9% in the CF10 postcode.

If you’re looking to buy a property with the intention of letting to students, we suggest looking for houses or flats with at least three bedrooms. Homes with good-sized or open-plan shared space and more than one bathroom are likely to have the most kerb appeal. And for obvious reasons, properties within walking distance of the university you choose are likely to be in demand.

If you are keen to market your rental home to students, why not do it via PlanetRent. Our automated lettings platform makes it easy for you to comply with all the regulations around letting a home in multiple occupation (HMO) and it already has a tie-in with Rightmove and Zoopla so you can promote your property on the UK’s two most popular portals on a pay-as-you-go basis. It’s all set up for you so, in just a few clicks, your home could be advertised to thousands of potential student occupiers in time for the start of the new academic year.

www.planetrent.co.uk

Why not READ our Property Blog: www.ringleypropertyblog.co.uk

Will the eviction ban end on Sunday?

Will the eviction ban be lifted or could we see another Government U-turn?

The eviction ban, brought in to protect renters during the Covid-19 outbreak, ends this weekend. The government is now under pressure from opposition parties and renters action groups to keep the ban in place beyond 23 August, with the London Renters Union planning a day of action demanding the government acts to protect tenants.

However, as we have said in this blog before, many landlords rely on rental income for their livelihood. New figures from the National Residential Landlords Association prove the point. Just-published independent research shows that 44% of those who let rental property entered the market to contribute to their pension and 39% report a gross non-rental income of less than £20,000 a year. In addition 94% of landlords are individuals not large lettings companies and they have unlimited liability should their businesses fail. 

The NRLA told Landlord Today, that it is wrong to assume that every tenant that has built up rent arrears because of COVID-19 will automatically be at risk of eviction. We agree – and we also support the NLA’s call to avoid what they describe as “unnecessary scaremongering”.

In order to soften the blow for renters, in July new rules around possessions came into force which landlords need to be aware of. Here’s a reminder.

  • Until September 30 a minimum of three months’ notice must be given to tenants if landlords wish to seek possession. This is to give more time for payment arrangements to be agreed.
  • Once the ban is lifted, anyone with a possession claim that was already in progress must provide a written ‘re-activation notice’ to the court and the tenant – otherwise the case will remain dormant.
  • For claims involving non-payment of rent, landlords are obliged to provide information on the tenant’s circumstances, including how they have been impacted by the pandemic. If this is not forthcoming, the case could be adjourned.
  • Priority will be given by the courts to possession cases based on serious pre-lockdown arrears and those involving anti-social behaviour and domestic violence.

To read the new rules on possession, click here.

Finally, don’t forget that we always advise landlords who are facing problems to engage with their tenants at the earliest possible stage and try and find ways to help them deal with rent arrears. Do contact us for help if this is proving difficult as we have extensive experience in the rentals market and may be able to offer some useful advice.

So with only a few days left until the ban is lifted, the big question remains whether or not Westminster gives in to demands to extend it further in England. In Scotland the moratorium is expected to be left in place until March 2021 and in Wales ministers have announced a six-month notice period for evictions. Following the U-turn on exams earlier this week, anything could happen, so both landlords and tenants will just have to wait and see. Watch this space!

www.planetrent.co.uk

Why not READ our Property Blog: www.ringleypropertyblog.co.uk

Landlords – don’t miss the new Covid-19 guidance

Keep track of all the latest legal requirements with PlanetRent

The government guidance on Covid-19 for landlords and tenants has been updated. At the end of July, a new guide was published, detailing recent changes to the law and explaining the implications of the Coronavirus Act 2020. The latest advice focuses on three key areas.

Rent, mortgage payments, and notices seeking possession – under the Coronavirus Act, until 30 September 2020 most landlords will not be able to start possession proceedings unless they have given their tenants three-months’ notice. Landlords can choose to give more notice if they prefer.

Court action on housing possession cases during the Coronavirus (COVID-19) outbreak – new or existing claims for possession will not be able to proceed before 24 August and landlords are strongly advised not to commence new notices seeking possession without good reason.

Repairs, maintenance, and health and safety – where safe to do so, it is in the best interests of both tenants and landlords to ensure that properties are well maintained, kept in good repair, and free from hazards. Recent changes to guidance on working safely mean that landlords can now take steps to address wider issues of repairs and safety inspections, provided these are undertaken in line with public health advice.

To download and read the guidance in full, go to https://www.gov.uk/government/publications/covid-19-and-renting-guidance-for-landlords-tenants-and-local-authorities.

The guidance mainly applies to England but some of the measures referred to also apply in Wales. Landlords with properties in Wales can find guidance from the Welsh Government at https://gov.wales/housing-coronavirus. Landlords in Scotland can go to https://www.gov.scot/collections/coronavirus-covid-19- guidance/

During the ongoing pandemic, it is vital that we all understand and abide by the rules wherever possible. As the situation evolves, all Covid-19 advice is being frequently updated, so landlords should be checking regularly for changes.

If you are concerned about compliance, why not try out our automated lettings platform PlanetRent, which ensures you are fully compliant with all the legislation and regulations that landlords need to abide by. There’s no subscription, you can simply pay-as-you-go. We’ve made it really easy for you so why not take a closer look at PlanetRent today.

www.planetrent.co.uk

Why not READ our Property Blog: www.ringleypropertyblog.co.uk