Home Office launches campaign to help letting agents avoid letting properties to criminal ‘County Lines’ gangs

Posted on August 30, 2018 by

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The Home Office launches campaign to help letting agents avoid letting their property to criminal ‘County Lines’ gangs

Urban drug dealing gangs are moving into rural towns and coastal communities, where they rent properties and establish a base. The National Crime Agency’s County Lines report shows that these gangs are now even moving into towns in affluent areas to do this.

These gangs use a drug dealing model, known as ‘County Lines’. Children and teenagers – some as young as 12 – are exploited by these gangs to carry drugs from urban areas to rural towns.

To help estate and letting agents avoid letting their properties to these criminal gangs, the Home Office, UKALA, NLA and CrimeStoppers are working together to increase awareness of the signs to spot criminal tenants, and to encourage staff to report concerns to CrimeStoppers.

Possible warning signs to look out for are:

  • The prospective tenant offers to pay rent for a long period (e.g. 6 months) upfront in cash
  • The prospective tenant is smartly dressed and appears affluent, but wants to rent an inexpensive property
  • The prospective tenant is unable to provide landlord or employment references
  • The tenant prefers to pay rent in cash, and is unable to provide a good justification
  • The tenant does not want to be disturbed, and tries to prevent you from inspecting your property when given reasonable notice.

County Lines gangs often use other people to procure accommodation as a means of distancing themselves from the criminality, meaning estate/letting agents may not have a contract with the actual criminal.

To minimise the risk of your property being used by a criminal gang:

  • Ask the prospective tenant appropriate questions about their reason for moving, try to judge if they seem genuine.
  • Visit your property within a few weeks of the start of the tenancy to confirm you have rented it to the tenants you think you have – but always remember you must observe your tenants’ right to ‘quiet enjoyment’.
  • Once the tenant is in situ, arrange regular inspections (quarterly or six-monthly) to ensure the property is being used according to the agreement and to check on the condition of the property. If the tenant seems overly reluctant to allow you to visit, be wary. If you have doubts it can be helpful to ask for feedback from legitimate contractors, for instance those carrying out gas and electricity safety inspections, as a way to assess what’s going on.

The Home Office has produced a poster for landlords and agents outlining the key signs to look out for. The poster can be downloaded here.

Estate and letting agents who have concerns that a prospective tenant might be involved in County Lines activity should report it to CrimeStoppers on 0800 555 111, or use the online form https://crimestoppers-uk.org/give-information/forms/give-information-anonymously.

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Shelter told ‘vilifying letting agents won’t solve housing problems’

Posted on August 24, 2018 by

nals-logo-1The report ‘End DSS Discrimination’ published by the National Housing Federation and Shelter this week has attracted a strong rebuke from the National Approved Lettings Scheme (NALS).

The report received widespread attention in the media, continuing recent media hostilities towards letting agents and the industry as a whole.

However, NALS chief executive Isobel Thomson released a statement highlighting the majority of lettings and managing agents are professionals who are skilled at managing housing benefit and universal credit tenancies and assess applicants on a case by case basis.

In a side of the discussion rarely covered, Thompson argues that this extends to many agents who help prospective and existing tenants obtain access to the benefits they are entitled to.

“An assumption that there is widespread discrimination, particularly of women and disabled people on benefits is emotive conjecture and fails to paint an accurate picture of the sector. In some areas tenants on benefits form agents’ client base” Thompson argues.

“Vilification of letting agents and landlords will not resolve housing problems where the provision of sufficient social housing is at the heart of the matter. The complexity of the benefits system and delays in payment add to the difficulties.

“Shouldn’t we be working together to come up with solutions which could solve the ills of the sector to ensure that no vulnerable tenants are left behind rather than castigating one section of it?”

The statement comes after the two charities revealed the results of a mystery shopping exercise, where 149 agency branches run by Bridgfords, Dexters, Fox & Sons, Haart, Hunters, and Your Move were visited:

  • One in 10 had a branch policy not to let to anyone on housing benefit, regardless of whether they could afford the rent;
  • 48% of branches said they had no suitable homes or landlords willing to let to someone on housing benefit.
  • The charities’ report claimed Haart was the worst offender with eight out of 25 branches having an outright ban on housing benefit tenants.
  • Hunters was the only organisation found to have no such ban in place at any office.

Responding to the report, David Cox, chief executive of letting agents’ body Arla Propertymark highlights that these issues are a systemic problem with how housing benefit works: “Rents are paid in advance, whereas housing benefit is paid in arrears, and therefore with such a shortage of rental accommodation, landlords and agents will naturally choose a tenant who can pay the rent when it is due, rather than a tenant who is always a month in arrears.

He added: “To make the situation worse, many lenders also have a clause in their buy-to-let mortgage agreements which prevent landlords from letting to housing benefit tenants.

“This situation does not exist because of landlords or letting agents, it is a systemic problem caused by government and the banks.”

 

You can read the full Shelter report here

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Mydeposits chief executive hits back at ‘broken system’ Which? report

Posted on August 17, 2018 by

which-logo-300x192The chief executive of mydeposits has hit back at a new Which? report published this week calling for reform of the deposit system for tenants in the private rented sector.

Eddie Hooker highlighted that since their introduction 12 years ago, Tenancy Deposit Protection schemes have consistently delivered a good service for the majority of tenants.

“I recognise that the systems and processes of deposit protection may need updating to deal with today’s rental market [but] having carried out extensive research I do not believe that overhauling the current system in favour of, for example, no deposit insurance alternatives, offers any greater protection for tenants”

Hooker concedes that there is an affordability issue for tenants in the market, with the average deposit in London now reaching £2500, this is a situation that must be addressed.

However, Hooker believes that some proposed alternatives could have negative consequences for tenants, adding that ultimately tenants are still liable for recompense to an insurance company which many simply do not realise.

“However, purchasing an insurance policy which reimburses a landlord if the tenant cannot or will not pay any losses, simply buys the tenant out of having to pay a deposit and could place tenants is a worse situation some years down the line” he says.

“The fees and/or premiums charged over a 10 year renting period, could end up costing the tenant £6,000 to £7,000 for nothing. What many don’t understand is that deposits are refundable if the tenant abides by the terms of the tenancy agreement. Insurance premiums are not” adds Hooker.

Hooker argues that any proposed change to the current TDP system should recognise the existing benefits, such as Alternative Dispute Resolution, but be enhanced for a modern rental market.

“Options such as deposit loans, custodial only schemes or deposit passporting could address affordability issues and offer tenants greater control, while continuing to give landlords the confidence to remain in the buy to let market.”

Read the full Which? report here

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Rents to rise 15% as landlords squeezed by regulation and running costs

Posted on August 10, 2018 by

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Rents are expected to increase 15% over the next five years due to increasing demand and limited supply following the Governments section 24 tax assault on buy to let investors. 

A Royal Institution of Chartered Surveyors (RICS) market snapshot shows nearly a quarter of respondents reporting a fall in new landlord instructions in the last three months.

New NLA research for quarter 2, 2018 found that among landlords planning to raise rents in their portfolio, the key reasons for doing so were covering the increased costs of running a property (47%) and strengthening tenant competition (42%).

Interestingly, only 15% surveyed reported the recent stamp duty changes as a key reason.

The increasing of costs for landlords means rents are projected to increase. The NLA Small Landlords Panel report found those planning to raise rents have reported they will raise them by an average of 8%, with some analysts in the industry predicting a 15% increase by 2023.

The institution says the surge reflects the changes in the rental sector after small-scale landlords quit thanks to section 24, increasing running costs and an ever increasing regulatory burden.

East Anglia and the South West are expected to see the sharpest growth over the period.

RICS chief economist Simon Rubinsohn says: “The impact of recent and ongoing tax changes is clearly having a material impact on the Buy to Let sector as intended.

“The risk, as we have highlighted previously, is that a reduced pipeline of supply will gradually feed through into higher rents in the absence of either a significant uplift in the Build to Rent programme or government funded social housing.

“At the present time, there is little evidence that either is likely to make up the shortfall. This augers ill for those many households for whom owner occupation is either out of reach financially or just not a suitable tenure.”

And Abdul Choudhury, RICS’ policy manager, adds: “Our survey suggests that recent government policy and legislation changes have impeded the growth of the private rented sector, which is a vital part of a functioning homes market.

“Withdrawing tax breaks that small landlords relied on, placing an extra three per cent on second home stamp duty, and failing to stimulate the corporate build to rent market, has understandably impacted supply.”

“The government must urgently look again at the private rental sector as a whole, including ways to encourage good landlords.”

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Study finds evicting rogue tenants takes 17 weeks

Posted on August 3, 2018 by

clocks-1427746It’s not unusual to see the press churning out stories covering landlords who break the law and exploit vulnerable tenants. However, the same enthusiasm is often missing when it comes to landlords who are forced to deal with rogue tenants and the considerable costs they inflict.

Most often, landlords have no alternative but to claim for possession of their property because the tenant has failed to pay rent, damaged the property or broken the terms of the tenancy contract. Unfortunately, the process of serving a section 8 or 21 to regain vacant possession can often prove to be time consuming and expensive.

It takes an average of 118 days for court-appointed bailiffs to remove tenants from private landlords’ properties after bringing a claim to court, according to new research by the Simple Landlords Insurance.

Their new figures reveal it took an average of 16.9 weeks from claim to bailiff eviction during the first three months of 2018.

A total of 21,429 possession claims were brought to court last year, of which 6,260 ended in eviction by bailiff.

Speaking on the new findings, Tom Cooper, director of underwriting at Simple Landlords Insurance, commented:

“The good news for everyone is that in 2017 only 0.5% of landlords made a possession claim in court. And only a third of those had to go through to the bitter bailiff end. The bad news is that if it does happen to you, it can cost a lot of money – and not just the average £1,700- £2,000 in legal fees.

“We wanted to get a more realistic idea of the impact of the process in terms of lost income, inconvenience, and ongoing legal fees in the worst and longest case scenarios.

“Just looking at lost rent, there are few landlords who can afford to lose up to 6 months’ worth – the time it takes for a tenant to go into arrears, for them to issue a Section 21 notice, and then for them wait 17 weeks to see the court process through.”

Often the best way for a landlord to protect themselves, their property and indeed their tenant is to take out appropriate landlords’ insurance, which differs from standard home insurance.

Getting the right tenant is crucial for landlords and agents, with NLA Tenant Check, you can perform extensive background checks on tenants to ensure you find the best matches for your properties. You can also cover unpaid rental income of up to £2,500 per month and cover legal expenses claims of up to £100,000, ensuring you and your portfolio are protected.

For best protection, you can also take out NLA Landlord Property Insurance. Developed specifically for landlords, the service takes into account your landlord building insurance requirements gives you highly competitive premiums and cover lock replacements up to £1,000.

 

Posted in Blog, Business, NLA, Possession, Regulation, Repairs, research | Leave a comment

Five-year electrical checks to be compulsory for the private rented sector

Posted on July 27, 2018 by

Architect man holding pencil working with laptop and blueprints for architectural plan, engineer sketching a construction project concept.

Last week, the Government announced a number of measures around building safety in England, including the launch of a consultation on building regulations and fire safety guidance.

However, the Government is yet to publish further details concerning the announced requirement for electrical installation safety checks every five years for properties in the private rented sector. The NLA will be pressing the department for more information concerning:

  •  the full scope of the inspections required
  •  the regulatory and enforcement regime
  •  who will be deemed competent, or authorised to carry out the checks
  •  any exemptions which may be created, for instance in respect of new buildings
  •  when the testing requirement is likely to come into force, and whether the Government is confident there will be sufficient qualified electricians to carry out the volume of inspections required.

The NLA will also seek confirmation that portable appliances are not to be included in the checking regime, arguing that this could introduce unreasonable practical costs and burdens for private landlords, relative to the risk posed by landlord-supplied appliances.

The Secretary of State for Communities, Rt Hon James Brokenshire MP, said there will be a full-scale technical review of the guidelines covering fire safety matters within and around buildings, known as ‘Approved Document B’, this autumn.

The Government are seeking views on the proposed clarification of statutory guidance on fire safety that aims to improve usability and reduce the risk of misinterpretation by those carrying out and inspecting building work. The key aim is to update the existing guidance to reflect modern building practices and technical and scientific innovations, including the latest understanding of fire risks.

In addition to the new electrical checks the Minister announced:

  • a residents panel will be established to ensure proposed safety improvements are grounded in the experience of those who live in high-rise buildings
  • Dame Judith Hackitt will chair an Industry Safety Steering Group to drive the culture change needed to improve safety and hold industry to account
  • working with a small group of organisations from industry, safety improvements will be piloted, in line with Dame Judith Hackitt’s recommendations, demonstrating early leadership on building safety reform.

Speaking at the launch of the consultation, he commented: “There is nothing more important than ensuring people are safe in their own homes.

“That is why I am announcing a package of measures focused on improving building safety, having listened carefully to the concerns which have been raised.

“Dame Judith’s report sets out the right framework to improve safety, but I will not hesitate to go further than the recommendations where I deem it necessary.

“That is why I am going further than my original commitment to simply clarify the guidelines, by commencing an end-to-end technical review of the fire safety aspects of building regulations in the autumn.”

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An average eviction now takes 118 days

Posted on July 20, 2018 by

35957363-close-up-of-wooden-gavel-isolated-on-white-backgroundAnalysis by the Simple Landlords Insurance Company has found that it takes an average of 118 days for court appointed bailiffs to remove tenants from private homes after a claim is brought to court.

According to researchers, this is the first time the length of the eviction process has been made public.

The study found that landlords in London are the most likely to have to evict, while those in the South West, North East and West Midlands were the least likely to do so.

Key Findings

  • During 2017, private landlords brought 21,439 possession claims to courts in England and Wales;
  • 27 per cent of claims didn’t receive a court order. Many claims are rejected for failing to follow the correct eviction proceedings;
  • The average insurance payment made for eviction support is £4,341.22, which includes legal expenses and lost rent;
  • Landlords in London are more likely to have to evict a tenant.
  • Buy-to-let investors in the capital brought 195.3 claims per 100,000 households last year;

Speaking on the study and its results, SLI Director of Underwriting Tom Cooper, said:

“In 2017 only 0.5 per cent of landlords made a possession claim in court and only a third of those had to go through to the bitter bailiff end. The bad news is that if it does happen to you, it can cost a lot of money – and not just the average £1,700- £2,000 in legal fees” cautions Tom Cooper, director of underwriting at Simple Landlords Insurance.

“Just looking at lost rent, there are few landlords who can afford to lose up to 6 months’ worth –  the time it takes for a tenant to go into arrears, for them to issue a Section 21 notice, and then for them wait 17 weeks to see the court process through.”

 

Posted in Blog, Possession, Regulation, research | Leave a comment