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RLA find errors in wording of proposed deregulation act

RLA find errors in wording of proposed deregulation act

RLA Find Serious Drafting Error In Rented Housing Regulations Of Proposed Deregulation Bill

The Residential Landlords Association (RLA) have called on the Government to delay the implementation of the proposed Deregulation Act after they found errors in the wording of the document that would expose private rental sector landlords to a legal minefield.

The RLA published the following on their newshub

A major drafting error in Government regulations affecting the private rented sector risks undermining confidence in new legislation being applied to the sector.

The Deregulation Act, passed prior to the General Election, provides Ministers with the power to introduce a new standard form for landlords to complete and provide to a tenant when seeking to regain possession of a property on a no fault basis, known as a Section 21 notice.

With the form due to become legally binding from the 1st October, the Residential Landlords Association (RLA) has written to the Housing Minister, Brandon Lewis MP, to seek a delay following the revelation of a serious drafting error.

The standard form, as currently drafted, notes that where a fixed term tenancy ends and then turns into a rolling or periodic tenancy the Section 21 notice would only be valid for four months from the date that it is served on the tenant*.

This contradicts the Deregulation Act, which makes clear that the required period to regain possession of a property where a tenancy is a rolling or periodic tenancy, should instead be four months from the date the Section 21 notice expires**.

Despite having engaged thoroughly with the Government on its proposals, the final version of the standard form, published last week, had not been shown to the RLA.

The RLA is warning that the drafting exposes landlords to a legal minefield, and is calling for the implementation of the plans to be delayed to give more time to get them right.

RLA policy director, David Smith, said “The RLA continues to share the Government’s ambitions to ensure that all landlords understand and properly implement their legal responsibilities and obligations. In light of the major changes being introduced for the sector it is vital that all documents published by the Government are clearly understood. This drafting error will serve only to dent the confidence of landlords in the legislation. Whilst Ministers are understandably eager not to let these new measures drift, it would make more sense not to rush their implementation than face the potential legal difficulties that will now arise for landlords.”

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PRS Rental Price Growth Stalls

PRS Rental Price Growth Stalls

UK PRS Rental Price Growth Stalls

It was widely expected that UK private rented sector (PRS) rental prices would increase during the course of 2015, due to the lack of available rental properties on the market and continued strong demand from prospective tenants.

However, research by HomeLet found that the pace of rent rises had begun to slow in the three months prior to August 2015. Average PRS rental prices being charged to new tenants were only 1.6% higher than they were at the start of the year compared to the 2.2% rise that had been observed during the three months to August 2015.

PRS rents remain considerably higher than they were when figures are viewed on an annual basis, with average rental prices reaching £992 (GBP) in the three months to August, 10.5% higher than August 2014. 

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UK PRS Rents Highest In EuropePRS Rents Still Increasing

Rent paid by tenants in the UK’s private rental sector, (PRS), increased by 2.1% in the 12 months up to and including March 2015, according to the latest published figures released by the Office for National Statistics (ONS), drawing claims from the National Housing Federation (NHF), that the UK is the most expensive country to rent property in within the European union.

In the 12 months to March 2015 UK PRS rents increased by:

  • 2.1% in England
  • 2.1% in Scotland
  • 0.8% in Wales

UK PRS rents are the highest in Europe, taking up 40% of tenant income despite having the shortest length of secure tenancies. In comparison our European counterparts only pay an average of 28% of their income on rent.

The NHF analysed the ONS data and found that on average UK PRS rents of approximately £750 per month for properties were almost double the rental costs of dwellings in countries like Germany and Holland, where average earnings are similar. However, it is worse for tenants in shared UK properties, who typically spent around 55% of their income on rent.

Across Europe, 43% of tenants had moved property in the last five years while in the UK this figure was more like 77%.

When the figures are analysed more closely it works out that approximately 23 minutes of every hour worked by UK PRS tenants is spent on rent; elsewhere in Europe, it is more like only 17 minutes.

The NHF also showed that the UK has repeatedly failed to invest in its own housing stock when compared to European standards, between 1996 and 2011 only 3% of the national Gross Domestic Product (GDP) was invested in UK housing, compared to 6% in Germany and 5% in France.

Other findings from the analysis include the fact that 72% of tenants renting in the UK private rental sector are employed compared to 62% of residential owner-occupiers.

NHF chief executive David Orr commented on the findings, stating: “UK tenants get a raw deal in comparison to their continental counterparts. High rents are just one symptom of the UK’s housing crisis, as a nation, we are simply not building enough houses due to under investment and problems with the land market.”

Labour Manifesto Aims To Change PRS Forever

Labour Manifesto Aims To Change PRS Forever

Labour’s PRS Rent Control And Tenure Plans Under Attack

Labour’s manifesto confirms their plan to introduce 3 year tenancies and a ceiling on excessive rent rises in the UK’s private rental sector (PRS).

Previous Government’s have tried introducing rent controls and the result discouraged the building of new homes as well as reducing more financial investment in their rental property portfolios by landlords.

For years rent controls caused damage to the nation’s housing market, reducing the number of properties being built and recovery took almost a decade. The current rhetoric being touted around by politicians could have disastrous consequences for house builders and landlords alike.

The introduction of longer term tenancies is very much geared towards tenants but fails to address the problems already faced by landlords when tenants abscond without giving any notice, leaving the landlord out of pocket and looking for new tenants.

The UK’s private rental sector (PRS) has improved dramatically over recent year’s thanks in part to the introduction of tighter legislation, but there remains a delicate balance between regulation and altering the relationship between tenant and landlord. Intervention on rents and security of tenure has in the past damaged both market liquidity and good business values within the PRS.

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Tenants Fighting Each Other Over Rental Properties As Supply Drops And Demand Increases

Tenants Fighting Each Other Over Rental Properties As Supply Drops And Demand Increases

Tenants Fighting Each Other Over Rental Properties
As Supply Drops And Demand Increases

Tenants looking to rent in the UK’s private rented sector face competition from other would be tenants as demand increases and supply contracts, according the Association of Residential Letting Agents (ARLA).

ARLA’s latest report has discovered that 68% of landlords surveyed reported more interested tenants than available rental properties.

This is the largest successive increase in tenant demand in the last 12 months, with tenant demand figures up from 46% in Q3 2013, 54% in Q1 2014, 59% in Q2 2014; meaning an increase of 9% between the second and third quarters of the year to date.

The tenant demand data is reinforced by the fact that supply of suitable rental properties in the private rental sector has decreased in the last quarter, with ARLA letting agent members recording a 6% drop in the average number of managed Buy To Let properties on their books, down from 143 to 135 per member agency.

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Landlords Warned To Get Ready For Universal Credit

Landlords Warned To Get Ready For Universal Credit  Chaos!

National Universal Credit Roll-Out
Starts February 2015 

Department of Work and Pensions (DWP) Secretary, Iain Duncan Smith surprised commentators with an announcement that Universal Credit (UC) will be rolled out to all Jobcentres and local authorities in the UK by February 2015 following the apparent success of the pilot scheme that was originally trialled in the North West.

Many Universal Credit detractors predicted that nothing significant would happen, before next year’s General Election, however, Iain Duncan Smith stunned everyone by announcing that Universal Credit will be rolled out to all Jobcentres and local authorities across the country, starting February 2015.

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MPPT Spotlight are focusing on Tenants this week with a series of articles on getting the best out of tenant

MPPT Spotlight are focusing on Tenants this week with a series of articles on getting the best out of tenants

Its Tenant Focus Week on Spotlight and we are going to publish a few helpful hints and tips over the next few days for landlords to incorporate into their rental property businesses and also pass on to tenants in rental properties.

The whole point is to raise awareness and overall standards within the UK’s private rental sector, whilst educating landlords and tenants about their respective rights and responsibilities.

All parties involved in renting property should behave respectfully towards each other to minimise misunderstandings and keep the lines of communication between the landlord, letting agent and tenants open and free from irrelavant clutter over silly unconnected issues that can sometimes spoil a tenancy.

Below is an excerpt from the general advice published and offered to all parties involved in property rentals issued by the Housing Ombudsman

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More Details Emerge On Government Demand For Transparency Over Letting Agent Fees

More Details Emerge On Government Demand For Transparency Over Letting Agent Fees

More Details Emerge From Government
On Letting Agent Fees Debate

The Government have declared that all UK letting agents and property management agents must display full details of all fees charged to tenants on websites and in offices.

Deputy Prime Minister, Nick Clegg faced a tough grilling at his House Of Commons session from Labour MP Harriet Harman, who wanted the Government to back the ban on letting agents charging fees to tenants.

Ms Harman told MPs: “Not least because of the difficulties of affording to buy a home, there are now 9 million people renting, including 1.3 million families with children – security and continuity are particularly important for them. It is time to move from one-year tenancies with unpredictable rents to three-year tenancies with predictable rents. What we need to be sure is that letting agents do not rip tenants off by charging fees to the tenants, as well as charging the landlords.”

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UK PRS Landlords Expect Tenant Demand To Increase

UK PRS Landlords Expect Tenant Demand To Increase

UK PRS Landlords Confident About Continued

Strong Tenant Demand

As we reported yesterday (UK Property Boom ContinuesSpotlight – 7th January 2014), the private rented sector boom looks set to continue throughout 2014 and a recent survey conducted by LSL Property Services, has discovered that six in ten UK private rented sector landlords agree.

The LSL survey of 2,195 private rental sector landlords found:

  • 58% of UK PRS landlords are confident that tenant demand will continue to increase over the next twelve months
  • 41% of UK PRS landlords reported growth in tenant demand in past six months
  • 16% of UK PRS landlords expanded rental property portfolios during 2013
  • 18% of UK PRS landlords expect to expand their rental property portfolios in 2014
  • 10% of UK PRS landlords expect tenant demand to fall
  • 6% of UK PRS landlords experienced a drop in tenant demand
  • 77% of UK PRS landlords believe now is a good time to buy or sell rental property
  • 71% of landlords cited attractive property prices
  • 50% of UK PRS landlords highlighted better capital returns on offer compared to other types of investments
  • 47% of landlords said that strong tenant demand was a key investment driver

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Good news for landlords

Good news for landlords

There is a lot of Good News For Landlords Around As PRS rents Increase, Tenancies Last Longer And Demand Remains Strong

Good news for landlords as monthly PRS rents have increased by 1.1% year on year to average £845 (GBP) per calendar month (pcm). Scotland has witnessed the greatest rental price increase at 6.7% compared with the first quarter of 2013.

There has also been an increase in the number of older private rented sector tenants according to the latest quarterly index published by Countrywide lettings agency, who noted a 6% annual growth in the number of tenants over the age of 50 renting property in the UK private rented sector (PRS). The lettings agency also report that there has been a 7% annual decline in the number of tenants aged under 25 in the second quarter of 2013.

Buy-To-Let yields are strengthening across the UK, with the average yields being recorded in 3 regions:

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