All change for evictions notices

The government just announced more changes to evictions

As we blogged last week, following the extension to the evictions ban, landlords now have to give six months’ notice before they can evict a tenant. Now the landscape has shifted again. Last week, following increasing pressure to consider the problems being faced by landlords as a result of the newly extended ban, the government announced more changes to notice periods.

The new rules – which have taken immediate effect, – mean a range of different notice periods depending on the reason why landlords are seeking to evict someone.

The revised notice periods for landlords and letting agents are now as follows:

  • anti-social behaviour (now 4 weeks’ notice)
  • domestic abuse (now 2 to 4 weeks’ notice)
  • false statement (now 2 to 4 weeks’ notice)
  • over 6 months’ accumulated rent arrears (now 4 weeks’ notice)
  • breach of immigration rules ‘Right to Rent’ (now 3 months’ notice)

This means landlords can now start the ball rolling to evict tenants who were already in arrears pre-lockdown. However, if they want to reclaim possession of their property in order to live in it themselves, they will still need to give their tenant six months’ notice.

Forms 3 and 6a have been updated and were published over the weekend and ARLA Propertymark told the press on Friday that it understands that notices will now be valid for 10 months. This means they won’t expire before action can be taken against the tenants in question.

So some good news for landlords. But as the National Residential Landlords Association says, the changes won’t make much difference unless property owners get a “cast iron guarantee” that the courts will re-open as planned on September 20. 

New court rules have also been agreed, coming into force on 20 September, that  mean landlords will need to set out in their claim any relevant information about a tenant’s circumstances, including information on the effect of the COVID-19 pandemic. Where this information is not provided, judges will have the ability to adjourn proceedings.

So the best that landlords can do now is to follow the law to the letter and ensure that, if they wish to evict a tenant once the courts are up and running, that they have served the correct notice and have all their paperwork in order. There will inevitably be a huge backlog and being well prepared in advance will mean the least possible opportunity for further delay.

Our advice remains the same. Talk to tenants who are having financia problems and try to agree a payment plan that suits both parties. And if you are actively seeking new tenants for your property, make sure you carry out all the relevant referencing. With furlough coming to an end in October, many people could find themselves on the receiving end of a redundancy notice, so nothing is certain in these Covid times. But vetting tenants carefuly is a must. Our automated lettings platform PlanetRent could help, so check it out today.

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

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.

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!

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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