Section 21 saved – for now…

Section 21 is still in force – but for how long?

Good news for landlords this week. The government has indicated that Section 21 evictions won’t be scrapped for the foreseeable future. The Renters Reform Bill – of which removing the right of landlords to no-fault evictions is a key part – will be put on hold until at least 2021.

As far as we’re concerned, this is a victory for common sense. At Ringley, we have always urged the Government to think long and hard before it ditches Section 21, so we believe this is the right decision at the right time. With the courts facing a backlog of evictions once the possessions ban is lifted, there will be enough litigation to wade through without an impending rule change to deal with.

Official figures point to the fact that only 10% of tenancies are ended by the landlord, not the tenant. This is because a long term tenant is a good investment. There is no void rent loss and less move-in, move-out wear and tear.  But there are legitimate reasons why a buy-to-let landlord may need to evict someone when they have a change of circumstances. At the end of the day the property belongs to them and, within reason, they must be able to repossess it. Section 21 is a useful – and polite – way to evict a tenant when this becomes necessary.

Pre-lockdown the average time it was taking for a private landlord to repossess a property was nearly four months. That was far too long – and will now take even longer. So it is vital that repossessions are supported by an efficient court process.

Regardless of how useful a tool Section 21 may be, the Government proposes to effectively make tenancies open-ended, while at the same time strengthening the rights of landlords who want to recover their properties by giving the Section 8 process more teeth. As we have said in this blog before, getting this right will make or break any planned change in the law.

Last year, more than a third of buy-to-let landlords told a Landlord Today survey that they would consider selling their properties if the government axes Section 21; Another 33% said they would only continue being a landlord if “significant changes” are made to Section 8 first. The study also found that 70% of landlords would be less willing to consider a longer-term tenancy if Section 21 was no longer available to them, while 85% said they would be more selective with their choice of tenant. 

So a change in the law could have unintended consequences. Our view is that all those calling for Section 21 should be careful what they wish for. If Section 8 is not strengthened to give landlords the ability to evict rogue tenants when they need to – and without excessive delays – the market may not be able to meet the demand for more rental homes that we will surely see as the economy inevitably falters post-pandemic.

www.planetrent.co.uk

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

We say NO to higher CGT on buy-to-let homes

Any increase in Capital Gains Tax could serously threaten the supply of rental homes

In the same week that Landlord Today reports one in four buy-to-let landlords is hoping to expand their property portfolio this year, the Treasury has announced it is to “seek views about capital gains tax”. This sounds ominous for those same BTL landlords and has prompted speculation that Chancellor Rishi Sunak is planning a tax hike for second homeowners, including people with buy-to-let properties.  

With a gaping hole in the country’s finances – which could be as much as £350bn – it’s pretty obvious that the Chancellor needs to claw back that money somehow. So taxes are in the spotlight. Landlords may be able to take comfort from the fact that the Chancellor has said the review is just an administrative formality. But with Rightmove reporting that rental demand is 40% higher than this time last year, any additional taxation that could damage supply looks a very bad decision indeed.

Landlords, who are already under the cosh from this year’s CGT changes, as well as the Tenant Fees Act and a range of new regulations now in force, are likely to quickly offload their rental homes if they are no longer viable and move their investment elsewhere.  At a time when the government is trying to support the housing market and make it easier for people to buy, anything that could push up prices by flooding the market with properties looks counterproductive.

If the Government is serious about boosting the housing market recovery and delivering more rental homes, we think it should exempt buy-to-let landlords from any increase in CGT.

The taxpayer will ultimately have to foot the bill for the economic downturn resulting from the pandemic. But how the government will choose to distribute the tax changes that will be needed is still uncertain.

We may not be able to do anything about CGT rates – but we can help if you’re unsure about compliance. To give landlords peace of mind that they need never fall foul of the rental regulations again, we’ve developed a great new cloud-based lettings platform that takes all the hassle out of compliance.  PlanetRent has a simple dashboard to help you manage compliance for one property or a whole portfolio. So if you are worried about complying with all the regulations that you need to be aware of, why not download it today. See all the great features we’ve included here and give it a try.

www.planetrent.co.uk

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

Don’t fall foul of discrimination laws

A landmark case has outlawed ‘no DSS’ policies

Following a judgement in the County Court on 1 July, refusing to rent your home to a tenant because they are on housing benefit has now been ruled unlawful. The case revolved around a disabled single mother who challenged a letting agent for rejecting her application to rent a home on the basis that she was receiving benefits.

Prior to this landmark ruling, previous cases where renters have challenged what has become known as ‘no DSS’ policies (despite the Department of Social Security being dissolved in 2001!) have been settled out of court.  This time, supported by Shelter, the case was determined in court and the letting agent was found to be in breach of the Equality Act. As a result, the agent was ordered to pay the claimant £3,500 plus costs.

In 2018, Shelter carried out research into online advertising in the private rented sector and found at least one in 10 adverts stated they would not accept tenants on housing benefit. Now, that will have to stop. Instead, landlords will have to consider every applicant on an individual basis, carrying out careful referencing instead of simply using ‘no DSS’ as a blanket ban on people they regard as potentially a higher financial risk.

In April, we looked at the subject of renting to tenants on Universal Credit and offered some helpful tips for making sure the landlord-tenant relationship works. The blog includes a link to a helpful guide explaining ‘Alternative Payment Arrangements’. This is where the housing element of Universal Credit is paid directly to the landlord, giving both parties the certainty that rent payments will be made on time.  And if a tenant is already in arrears, the landlord can also apply for ‘Third-party Deductions’ whereby an additional amount is taken monthly from the claimant’s personal allowance to reduce the debt over time.

Many people on benefits have never been in arrears or caused problems for their previous landlord. Simply making assumptions about potential tenants on the basis of their personal circumstances is no longer an option – so make sure you do your homework when you’re looking for a new tenant. Don’t fall foul of the law and risk the chance of getting involved in a costly court case.

As we blogged yesterday, our cloud-based lettings platform PlanetRent automates rent payments, which also makes it easy for tenants to budget and to keep up-to-date – and it makes referencing really quick and easy for landlords. PlanetRent takes care of your marketing too. So why not download it today – it’s pay-as-you-go and works across all your devices.

www.planetrent.co.uk

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

More support needed for buy-to-let landlords

Small landlords are struggling as much as their tenants due to the pandemic

Baroness Altmann echoed the feelings of many people in the private rented sector when she told Letting Agent Today last week that the Government needs to do more to support buy-to-let landlords. The Conservative peer and consumer campaigner highlighted the plight of small landlords, who may only own one or two properties and “ have been compassionate in the face of requests from renters during the pandemic” but who are now struggling with their own finances.

Despite supporting the eviction ban “in principle” Baroness Altmann also pointed out that an unintended consequence of the five month long moratorium has been that, aswell as protecting vulnerable tenants, it has also prevented evictions of anti-social tenants and has left some landlords struggling to pay their own bills.

As we have highlighted in this blog before, many buy-to-let investors enter the sector in order to furnish themselves with a pension.  Now, as a result of the pandemic, they are finding themselves with little or no rental income but must still find the money to pay for licensing fees, insurance, repairs and possibly even utility bills.

In response to the problems now being faced by buy-to-let landlords, Baroness Altmann is suggesting a range of measures including:

  • Government to clearly re-state that tenants must, wherever possible, continue to pay their rent as normal, and stop implying that all landlords are wealthy or are large firms who can afford to receive no income
  • Government to offer landlords and tenants additional support, including mediation, to agree rent repayment plans where arrears have built up as a result of the pandemic
  • Court processes to be urgently reformed so that possession cases are heard fast in order to help clear the backlog of cases
  • Clear plans to be put in place to respond to possible future local lockdowns, perhaps by pausing repossession cases in those areas, within a specific timeframe. 

We support Baroness Altmann’s proposals. It is only fair to continue to support vulnerable tenants wherever possible while at the same time making life easier for beleagured landlords. In the last few months we have all become accustomed to doing all kinds of things remotely, so we particularly like her practical suggestion that court reforms could easily include continued online hearings and making better use of web-based arbitration.

At Ringley, we’re doing our best to support the landlords we work with who find themselves with tenants in arrears. Using our new lettings platform PlanetRent may also help by simplifying rent collection. Payments are made automatically via direct debit on the same date each month, enabling tenants to budget for their rent. Another really useful feature is that payments are taken from joint tenants individually – improving the collection rate for landlords – and then jointly from other tenants if one should default.

There’s no subscription and we have a great pricing model. PlanetRent is pay-as-you-go, so why not check it out today and help your tenants pay their rent quickly, easily – and on time.

www.planetrent.co.uk

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

Voucher scheme to make rental homes cheaper to run

The new Green Homes Grant aims to make rental homes more energy efficient

Alongside stamp duty cuts to boost the housing market recovery, yesterday Chancellor Rishi Sunak announced a new £2bn Green Homes Grant. This means that from September, both homeowners and buy-to-let landlords will be able to apply for vouchers to make their homes more energy-efficient. The grants will cover at least two-thirds of the cost, up to £5,000 per household. And for low-income households, vouchers will cover the full cost of any upgrade needed – up to £10,000.

The aim is to  

  • make over 650,000 homes more energy efficient
  • save households up to £300 a year on their bills
  • cut carbon by more than half a mega tonne per year, equivalent to taking 270,000 cars off the road
  • create an estimated 140,000 jobs

A £50m fund to pilot new ways to decarbonise social housing is also part of the package.

With people stuck at home for weeks on end during lockdown, our property managers have reported residents, understandably, becoming more aware of the condition of their property. For both leaseholders and renters, property niggles have been pushed to the top of the list of issues they want to talk to their block managers about. So these initiatives are timely and, we hope, will help boost the economy too post-lockdown.

Ringley Group MD Mary-Anne Bowring welcomed the news yesterday, saying “The UK’s housing stock is some of the oldest in Europe and this is not just bad for the environment but bad for our health too, with too many properties suffering from problems with damp and cold. And it’s great that the government’s voucher scheme covers renters, especially as homes in the private rented sector tend to be older.”

“Additional financial support to retrofit outdated homes, stamp duty cuts across the board – including landlords – and the government pledge to remove all dangerous cladding no matter what the cost will create hundreds if not thousands of jobs, kickstart the housing market and raise the quality of our homes.”

But it’s not just existing homes that need the government’s attention. Buildings and construction account for almost 40% of all carbon emissions. Many developers are now taking their environmental responsibilities more seriously. But we’re not there yet. So at the same time as promoting better energy efficiency in existing homes – and helping fund it – developers should be actively encouraged to build greener, to use innovative energy-generating products and to really buy into offsite modular construction to boost the sustainability of the whole property sector.

What do you think about the Government’s new voucher scheme? Will you benefit from it? Let us have your comments.

www.planetrent.co.uk

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

Online marketing made simple with PlanetRent

planetrent logo
PlanetRent helps you market your home quickly and cheaply

 Private landlords can now market their properties directly on Zoopla and Rightmove thanks to PlanetRent. Our new automated lettings platform means you can promote your rental home on the UK’s two most popular portals on a pay-as-you-go basis.  

Landlords can find it costly to advertise their properties on Zoopla and Rightmove but by using PlanetRent, marketing your home with these portals is set up for you. Our new platform also allows you to easily create your own personalised website to showcase your properties.  Real-time reporting and updates on offers made are included in the software.

And for landlords who prefer to use letting agents, PlanetRent works on the premise that you own your properties and so should be in control of your own data. You can then invite the letting agents or contractors you use, and make PlanetRent central to your marketing.  

PlanetRent also helps cut down costly void periods by making it really quick and easy to remarket a property before it becomes vacant. Tenants are automatically prompted towards the end of the tenancy and are encouraged to renew. To make life easier for landlords and renters, PlanetRent has cut down the renewal process to just three clicks and allows all parties to transact remotely – a big advantage in our new socially distanced world.

If a tenant does choose to move out, they are automatically sent the necessary end-of-tenancy process and given advice on how to get their deposit back, plus the requirements for them to assist in viewings, repairs, and the remarketing process.  The marketing process is automatically triggered too.

 All landlords who use PlanetRent have access to free property listings directly on the PlanetRent platform as well as social media feeds to their social media account. 

While the for-sale market has been hit by the expectation of falling prices and mortgage lenders tightening their lending requirements, the rental market has proved resilient. So with Rightmove reporting 23,000 new rental listings coming to the market since the first day of reopening in May, make sure you don’t miss out. By using PlanetRent, marketing your property on the UK’s most popular portals is just a few clicks away.

www.planetrent.co.uk

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

New code of practice for agents is on its way

Soon agents will need to abide by a new code for the property industry

In future, anyone using a letting or estate agent or a property manager will be able to judge their performance against a new code of practice and a new and improved system for dealing with complaints. This is because a new code for property agents is being drawn up by a high-level industry group being led by Labour Peer Baroness Hayter.

The expert group includes ARLA and NAEA Propertymark, Trading Standards and sales and lettings industry trade bodies, as well as professional bodies such as the RICS and IRPM plus the courts and the Property Ombudsman. 

The new code was one of the recommendations of the Regulation of Property Agents (RoPA) working group that issued its report last July. As well as a new code of practice, the report called for:

  • an independent regulator,
  • licensing for all agents,
  • mandatory qualifications, and
  • a powerful new form of redress for consumers.

According to Estate Agent Today, “the new Code of Practice is likely to be a single, high-level set of principles to be applied to all residential property agents; there will also be a number of other more detailed sections developed that are specific to various aspects of the residential property agent sector, such as sales, lettings and management. “ 

The aim is to produce a draft code to go out for consultation later this month. Once finalised – hopefully by the end of the year – it will be handed over to the new industry regulator, once that role has been established.

At Ringley we welcome the prospect of a proper code of conduct for property agents – something our industry has been lacking for many years. Property professionals will benefit from clear guidelines and consumers will be clear what standards they can expect from agents. Rogue operators should have less chance to thrive and the new system for consumer redress, once established, will also give our customers the confidence that property agents will be held to account if they don’t meet the standards expected of them.

www.planetrent.co.uk

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

Why we say NO to cancelling rents!

Cancelling rents would be disastrous for landlords and investors says Ringley

Cancelling rents for private tenants without reimbursing landlords would be “stealing from people’s pension pots” says Ringley Group MD Mary-Anne Bowring in response to demands for more radical policies to help renters.

More than 4,000 Labour party members recently signed an open letter backing cancelling rent as a policy. The letter argued Labour’s five-point plan to help renters, which included extending the evictions ban by at least six months and giving tenants two years to pay back rent arrears, did not go far enough. Meanwhile, the London Renters’ Union and others are calling for rent strikes, claiming renters are having to choose between food and paying rent.

The government’s ban on evictions has been extended until August 23rd, which has calmed fears that thousands of tenants could lose their homes if the ban wasn’t extended.

However, Mary-Anne firmly believes that cancelling rents in the private sector would punish hundreds of thousands of pensioners, as well as risk halting the current appetite from UK pension funds who are investing billions into creating new high-quality homes for rent. The most recent English Private Landlord Survey estimates there are at least 1.5m landlords in England alone. Of those, nearly half said they invested in rental property to supplement their pension and approximately one-third are retired.

This means if a rent cancellation was to be introduced, at least 500,000 retired landlords would see their rental income wiped out entirely. This would also dramatically reduce rent revenues for pension funds, many of which have suffered losses from retail and office investments and rely on income from property to match their liabilities.

No one can doubt or deny that millions of renters are facing major financial difficulties or anxieties but cancelling rents is not the answer. Some renters may need more financial assistance from the government but cancelling rents or getting the government to pay would be hugely damaging,” warns Mary-Anne.

 Both private and institutional landlords would lose rental income unless the government stepped in to pay private residential rents, which could cost the taxpayer billions and is completely unacceptable.

That’s our take on Labour’s proposals. What do you think?

www.planetrent.co.uk

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

Gas safety during the Coronavirus outbreak

Make sure your properties are fully compliant by reading the Gas Safe guidelines

Last week we blogged about an important legal case, which centred on gas safety certificates. In Trecarrell House Ltd v Rouncefield the Court of Appeal found that not providing a gas safety certificate before a tenant moves in does not prevent a landlord from serving a Section 21 notice as long as the certificate has been given at some point during the period of occupation. 

Good news for landlords and clarification of a legal point that wasn’t particularly clear. Compliance with the gas safety regulations is a legal obligation for landlords, and to make this absolutely clear, the HSE has a handy guide to gas safety on its website, which focuses on the special circumstances of the coronavirus outbreak. The advice is really helpful so we thought we would share it with you.

Landlords should all be up to speed with their legal duty to repair and maintain gas pipework, flues and appliances, do annual gas safety checks and keep a record of each safety check. But the HSE recognises that it may be difficult to carry out these checks at the moment because, despite the lifting of lockdown restrictions, some tenants are still shielding or self-isolating. So landlords must use their common sense and weigh up the risk to the safety of the household and the public presented by a potentially faulty gas system, versus the risk to tenants’ health from possible infection.

The Gas Safety Register has drawn up guidelines for landlords that include a set of scenarios to help you decide how best to tackle your compliance obligations. The law is flexible and where it’s not possible to carry out a gas check, it should be acceptable to document that you took reasonable steps to do so. However, the advice also clearly states that landlords should not simply suspend all gas safety checks for the duration of the pandemic. We could find ourselves living with Covid-19 for many months and ignoring health & safety issues risks endangering tenants unnecessarily.

So if you’re worried about making sure your gas safety certificates are up-to-date, read the guidance – it’s very comprehensive and well worth five minutes of your time. And as we said last week, to make compliance even easier why not use our cloud-based platform PlanetRent to ensure all your rental properties are fully up-to-date with current legislation. It’s very user-friendly and you can access it via a mobile phone or tablet, as well as your laptop. It’s pay-as-you-go and there’s no subscription to pay, so download it today and make renting easier for you and your tenants.

www.planetrent.co.uk

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

Ringley welcomes new smart meter roll-out

Smart meters are coming your way

With the lockdown easing, the roll-out of smart meters in homes across the country is back on the cards. The Government has set out new plans for the installation of the meters to help homeowners cut their energy bills and carbon emissions.

 The hope is that by installing smart meters in every home – which show energy consumption for gas and electricity and track expenditure – savvy consumers could save up to £250 a year on their bills. The meters show exactly how much gas and electricity is being used and track expenditure, helping consumers reduce their consumption. According to the Government, this could slash countrywide carbon emissions by as much as 45 million tonnes – the equivalent of taking 26 million cars off the road for a year.

Until early March, around 19,000 smart meter installations were taking place each day until the  pandemic put a stop to the roll-out. Now energy suppliers are being given an extra six months to ensure they have taken all reasonable measures to install smart meters in households and small businesses – making up for the reduced contact they have had with customers. New secondary legislation put to Parliament last week, will see a consultation with industry set strict future annual targets that could result in fines if missed.

As a managing agent, we welcome this news. Unless a block has a concierge service or on-site staff, it can be extremely difficult to arrange attendance to carry out meter readings, so smart meters, which automatically send readings to utility providers are a huge improvement.

New build developments are a particular problem because utilities start off on commercial rates – at 20% VAT – with very high usage during construction. When utilities are then transferred post-occupation to block management, it is no easy feat to get the utility companies to stop charging for energy on estimates based on the construction stage despite usage falling significantly.

Cashflow is a careful balancing act in the early days of new-build properties and the faster smart meters come in the better, to protect residents’ hard-earned cash.

www.planetrent.co.uk

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