Foxtons in Brixton hires Security Guards as Protesters target Letting Agent Offices

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May 032013
 

protests against letting agents in HaringeyLetting agents were the subject of protests across London last weekend, causing some to shut their offices for the day, whilst Foxtons in Brixton hired private security guards as a precaution.

Dozens of angry demonstrators gathered outside the Foxtons office, claiming that they were being priced out of the area by gentrification, encouraged by letting agents charging “extortionate” fees. It is not the first time that the branch, which only opened in March, has been the subject of protests. The office was given a “worst letting agent” award by the protesters.

The activists now appear to be getting more organised. The scenes on Saturday were part of a day of co-ordinated action across London.

In Upper Street, Islington, members of a coalition calling themselves London Renters – dressed up as Monopoly characters and invited members of the public to play “Housing Crisis Chance” and compete for a flat in East London.

In Haringey, protesters dressed-up as “Community Housing Inspectors”, wearing high visibility jackets. They had previously “inspected” local letting agents in October 2012, claiming to have uncovered high rents, high fees and lack of secure tenancies.  The “inspectors” carried out a “re-inspection” on Saturday to find out if their demands for change had been met.  They served “Cease and Desist” notices on 8 letting agents which they claimed were engaging in greedy and anti-social practices:  Wilkinson Byrne, Easy Properties Ltd, A1 Estates, Hane Estates, Kings Lettings, Winkworth, Bairstow Eve and Brian Thomas.  The self-styled inspectors then cordoned off the offices with tape, declaring them to be crime scenes and handed out leaflets to passers-by.

Protests against letting agents have been gathering momentum in recent months.  The key demands include an outlawing of agent fees charged to tenants (following the example of Scotland), an end to discrimination against people on housing benefit and for letting agents to stop encouraging landlords to drive up rents to unaffordable levels.

Heather Kennedy, of campaign group Digs, part of London Renters, said “Our message to letting agents is that private tenants have had enough.  Right across the country private tenants groups are springing up, demanding an end to the destructive impact of letting agents on the housing market.”

“We call on letting agents and MPs to follow the example of Scotland by scrapping rip-off fees. And we must remove the totally unacceptable discrimination which bars housing benefit tenants from accessing a home in the private rented sector. This has a devastating human cost, particularly because social housing and home ownership are simply not an option for many Londoners”

The protesters have vowed to continue to inspect and monitor letting agents and have said that Saturday’s action was just the start of a series of planned demonstrations and events across the capital.

 Posted by RentFair on May 3, 2013  Agents, Latest Property News

A Cheering Tale

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Feb 282013
 

landlord reclassification of property exempts tenants from bedroom taxAt a time when cynicism of landlords and authority is everywhere, a story reported in the Guardian this week shows how common sense and decency still sometimes prevail.

Knowsley Housing Trust is to re-classify nearly 600 family homes as smaller properties from 1 April. Knowsley says that demand for the 2 and 3 bedroom flats and maisonettes had dwindled and that they no longer provided suitable modern accommodation for families with young children. Rather than leaving them empty, the housing association had offered them to single people and couples without children.

However, many of these tenants had been faced with the prospect of paying extra rent from April 2013 when the government’s under-occupancy rules take effect (the so-called “bedroom tax“).  Having taken legal advice, Knowsley is to re-classify these homes as smaller properties, reducing the rent accordingly and exempting the properties from the effects of the welfare change.  The re-classification will cost the housing association £250,000 a year in rental income.

Under the new welfare rules, anyone living in social housing with one or more spare bedrooms would have a suffered a reduction in their housing benefit payments. They would either have to downsize or pay the shortfall themselves. The government reforms are designed to (a) save money and (b) free up larger homes for families on the housing waiting list.

The bold action by Knowsley means that where there is little demand for larger homes from families on the waiting list, existing tenants can stay put without having a reduction in their benefit. The government saves money through the decrease in rent, the housing association does not have to re-house tenants and those living in the re-classified properties can sleep at night without worrying about how to pay the rent come April.

Knowsley Housing Trust is a not-for-profit organisation which owns and manages around 14,000 homes in Knowsley, Merseyside.

 Posted by RentFair on February 28, 2013  Latest Property News

All about Guarantors

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Feb 232013
 

rent guarantorsIn this guest post, Elli Rivers examines the responsibilities placed on a guarantor and concludes it is not a contract to be entered into lightly.

Many renters will at some point be asked to provide a Guarantor, or maybe they wish to be one themselves for a family member or friend. Although the principle is simple, it is well worth understanding the full implications of this contract before you enter into it from either angle – as the position is legally binding, it holds a significant level of responsibility.

So what is a Rent Guarantor?

As the name suggests, the Rent Guarantor guarantees the rent. But this is not necessarily the whole story and many agents or landlords write other clauses into the contract which mean that the Guarantor in effect becomes responsible for all the tenant’s liabilities. In practice this means that if your trusted relative pegs it without paying the leccy, you, as Guarantor, will be expected to pick up the bill for the landlord. Not only this, it may mean that if they break a window and throw their glass of Chianti on the cream carpet, you’ll be expected to sort that out too, and the landlord could legally take you to court if you fail to do so.

Essentially, the Guarantor acts as an insurance policy for the tenant. The typical situation is that the tenant is, say, a student and therefore doesn’t have reliable employment at the time, and they possibly don’t have a rental track record either. The Guarantor is expected to pass a credit scoring with flying colours, and this will likely mean they are a homeowner and in secure employment of some form.

Sign on the dotted line

Once the Guarantor has signed the contract to say they are happy to take on this responsibility, there is no going back. Even if you fall out with your beloved tenant, you will still be their Guarantor, so it’s worth being sure that you feel happy with the situation. You are legally bound to pay the whole rent for the term of the tenancy, so if they fail to even move in for example, you may still have to pay the full sum.

Can you reduce the responsibility?

If you examine the contract and feel that the landlord is placing a little more on your shoulders than you really feel comfortable with, you can, in theory, ask the landlord if you can adjust the contract to reflect this. For example, you might be prepared to guarantee the rent, but not the household fixtures if your tenant is a bit of a party animal. But this is unlikely to be satisfactory to the landlord, as they are looking to the Guarantor to provide a level of security and confidence that they don’t feel is provided by the tenant alone. So this may cause the landlord to get cold feet about the whole arrangement in the end.

Be clear from the start

In the first instance, you should make sure that you have thoroughly read the tenancy agreement, and that there’s nothing lurking in there that you don’t like the sound of. Make sure you are clear on the rental amount, how long the tenancy is for, whether any other tenants will be in effect ‘covered’ by your guarantee, and whether your home will be used to secure the guarantee.

Look before you leap, and always take reliable legal advice if you are in any doubt at all!

 Posted by RentFair on February 23, 2013  Legal, Tenancy Agreements

What is going on in Scotland?

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Dec 132012
 
scottish-housing-red-tape

Too much red tape?

The Scottish government has been indulging in a bit of landlord-bashing of late.

Scotland, which has devolved powers in housing, claims to be leading the way in reforming the private rented sector. Well, they have certainly made some big changes, which have left landlords and letting agents north of the border squealing in protest. But whether they are leading the way or have taken a serious wrong turning somewhere remains to be seen.

So what are these reforms?

Compulsory landlord registration for a start. This was already in place in Scotland but the regime has been strengthened further. All private landlords must register with their local authority before letting out a property. The maximum fine for operating as an “unregistered landlord” is a whopping £50,000.

The purpose of registration is so that the local authority can decide whether the landlord is a “fit and proper person” to let property. Councils are required to check an applicant’s criminal record as well as take into account any complaints they have received or any information they have that the would-be landlord has breached property regulations in the past.  Registration lasts for three years.  Landlords then have to apply again. The current charge to register as a landlord is £55, with an additional fee payable for each property. There are reports that about 6,000 landlords in Glasgow alone have so far failed to register.

Not only that. It is now an offence in Scotland (that’s right – an actual criminal offence) for a landlord to use a letting agent without notifying the local authority.  Failure to do so is punishable by a fine of up to £1000.  Yes, you have read that right: you can get fined for using a letting agent without permission.

And if that wasn’t enough to make any landlord run for the glens, wait until you hear about the “Tenant Information Pack“, or TIP.  TIPs are supposed to become mandatory from early 2013. The TIP is a bit like the disastrous “Home Information Pack” (or HIP) – remember those? – but for rentals, not sales. Landlords will be required to provide all new tenants with a TIP – a sizeable booklet which has to be in a standard format – and which will contain information on things such as property condition, tenancy agreements, EPCs, gas safety, levels of occupancy and rights and responsibilities of landlords and tenants. Failure to provide tenants with a TIP will also be a criminal offence.

Oh, and it is also now illegal in Scotland to charge tenants fees.   This is aimed at those so-called “admin fees” charged to tenants by letting agents, supposedly to check tenant references etc (and we thought that’s what the landlord was paying the agents for).

Further proposals that may be in the pipeline include compulsory licensing for letting agents and possible reforms to tenancy agreements, to give tenants more security of tenure.

RentFair says…

We welcome the outlawing of fees charged to tenants.   Letting agents charge landlords up to 10% of the annual rent to find tenants, reference them and draw up a tenancy agreement.  It is clearly wrong for them to charge the tenants for the same tasks.  It is only because good rental property is in high demand that agents have been able to get away with this practice and it is time it stopped in the rest of the UK too.

But that aside, these proposals are a backward step and will not achieve their stated aims. The vast majority of landlords and letting agents (well, landlords anyway) are decent honest people, perhaps with one or two buy-to-let properties that they are hoping will suffice for a pension. Others may be so-called “accidental landlords” who are driven into letting out their home because they have been unable to sell it and need to move, perhaps for work reasons.   Demonising these people and threatening them with criminal sanctions or massive fines if they fail to register or if they – heaven forbid – dare to use a letting agent without Big Brother’s permission is not the way forward.

As for Tenant Information Packs. How many tenants care about occupancy levels or their EPC rating? They will be more concerned as to whether the production of the mound of paper sheepishly handed to them by their landlord is likely to have resulted in a rent increase. The TIP will go straight in the recycling box, unread. Most of the information is readily available anyway if tenants are interested.

And anyway, how are all these new laws going to be policed?  The reports that 6,000 landlords in Glasgow alone have failed to obtain licences is hardly surprising.  Is Glasgow council really going to start fining these law breakers up to £50,000 each?  And how will it trace unregistered landlords anyway?  If they can’t get round to registering they are not going to advertise that fact.

And what happens if a landlord is declared unfit to be a landlord?  Does he have to evict his tenants or face prosecution?

The result of all this Scottish regulation is likely to be this:  badly-behaved landlords will continue to flout the law, as they do now, good landlords will think twice about taking on any more properties, and many would-be landlords will be put off the whole idea.  Some letting agents will go out of business. Fewer landlords may be welcomed by some, but fewer landlords means fewer rental properties,which inevitably means higher rents. Unless the Scottish government plans to regulate rents too, of course. Our advice to investors: don’t buy in Scotland.

 

 Posted by RentFair on December 13, 2012  Latest Property News

East of England most profitable region for Landlords

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Nov 022012
 

Landlords surveyed by Paragon Mortgages reported an average yield of 6.7% in the third quarter of 2012, up from 6.2% in the previous quarter. This makes buy to let a very attractive investment when compared with the average interest rate on savings accounts, or recent stock market performance.

The research revealed that Landlords with portfolios in the East of England fared even better, with average reported yields of 7.5%, followed by Wales (7.3%), the North East (7.2%) and central London with 7.1%.

Landlords with larger portfolios tended to generate higher yields overall, perhaps because they were more focussed on income rather than capital growth.

Yield, of course, is only one factor to consider. Although outer London (at 5.6%) reported an average lower yield than other regions, historically London has out-performed the rest of the country in terms of capital growth.

 Posted by RentFair on November 2, 2012  Landlords, Property Market
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