Shortage of Flatshare Rooms pushes up Rents

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Feb 152013
 

rising-rentThe cost of flatsharing in the UK is set to keep on rising, according to research carried out by Easyroommate.co.uk.  Average room rents are expected to reach an almost unaffordable £448 per month by December 2013, compared with the present £430 per month.  Regionally, the West Midlands has seen the biggest increase in rents, with room rates in Wales actually falling.  The research found that the number of bedrooms available for rent has fallen by nearly half (44%) over the last 12 months.

Although many homeowners have turned to letting out a room to help them make ends meet, demand for shared accommodation has also risen significantly.  Buying a property is now out of reach of many, driving up demand for rental property.  As rents have risen across the board, those at the lower end of the market have increasingly been forced to downsize, renting a room only where previously they might have stretched to a self-contained property. Added to this, the government’s housing benefit reforms have put pressure on claimants to downsize.  Single people under 35 who rent from a private landlord can no longer claim the housing benefit rate for a one bedroom flat; payments have been restricted to the rate for renting a single room in a shared house.

But one of the most significant benefit reforms has yet to bite. The so-called “bedroom tax” will cut the amount of housing benefit tenants can claim if they are deemed to have a spare room in their council or housing association home.  The new rules come into force from April 2013 with an expected 600,000 people affected nationwide. Tenants with one spare room will lose £14 per week on average.  The aim is to free up larger council housing, which is in short supply, and often under-occupied.  It is expected that many tenants with spare rooms will struggle to meet the shortfall when their benefit is cut.  They will essentially have two options: downsize to a smaller property, or rent out the spare room to make up the difference. Expect the number of flatshares advertised to increase from April.

 Posted by RentFair on February 15, 2013  Housing Benefit, Property Market

Ed Milliband pledges to crack down on “Rogue Landlords” and “rip-off” letting agents

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Jan 152013
 

Ed Milliband SpeechCome on, Ed. Rogue Landlords? Not that old cliche.

In a speech to the Fabian Society on Saturday, Ed Milliband set out his vision for the private rented sector in England should Labour win the next election. Ironically for a speech about bringing society together in One Nation, the Labour Leader’s plans seem surprisingly divisive with aggressive talk of cracking down on so-called rogue landlords and rip-off letting agents.

The Labour plans include a “National Register” of landlords with greater powers for local authorities to, as Mr Milliband put it, “root out and strike off the rogues”. Labour will “stop families being ripped-off by letting agents” and will “end the confusing, inconsistent fees and charges in the private rented sector”. Perhaps of greatest significance is the pledge to bring greater security to families who rent by encouraging the adoption by landlords of longer term tenancies.

The policy announcements come out of a recently published Labour party Policy Review document on the Private Rented Sector. The document points out that around 8.5 million people in England now rent privately and that nearly a third of households in the private rented sector are families with children. The review highlights the fact that the English model of Assured Shorthold Tenancies lasting usually for no more than 12 months provides very little security to tenants. This can be particularly disruptive to families with children, where it may sometimes be necessary for children to change schools  at short notice when they are given notice on their accommodation. The review raises the possibility of offering tax incentives to landlords who offer longer term tenancies.

A further review paper, yet to be published, will look at how to drive up standards across the sector. Expect this to contain further detail on the National Register and more references to those rogue landlords.

 

RentFair Says…

Short term tenancies are clearly a problem that needs to be addressed.  With home ownership out of reach for many, renting is becoming the norm. The private rented sector has stepped up to meet that demand but it can not be acceptable for a family with children in local schools to be offered a maximum 12 month lease, with just two months’ notice to leave the property. The situation is complex:  many lenders insist on short-term tenancies and there is a balance to be struck between flexibility and security. Going back to the old days of rent controls and sitting tenants will scare off would-be landlords and lenders;  introducing a culture where tenants and landlords are free to agree longer leases with greater security must be the way forward. And if landlords are to have their properties tied up for longer, they should be given an incentive for doing so.

We have less time for some of Mr Milliband’s other ideas. There will always be so-called “rogue landlords”, just as there are rogue builders, rogue car dealers and rogue bankers; introducing more regulation in the form of a National Register will not help and we have made clear our views on landlord licensing. Demonising landlords and letting agents may be popular with Mr Milliband’s audience but a more co-operative and grown-up approach would surely work to everyone’s benefit.

Update

Labour lost a House of Commons bid to regulate private landlords and letting agents and to give tenants longer tenancies, on Wednesday (23 January 2013).  The motion, supported strongly by Housing Charity Shelter, by 292 votes to 225.  A government amendment stating that the Government “supports action to be taken against the small minority of rogue landlords, without burdening the whole sector” was passed.  More commentary on the debate in this article.

 Posted by RentFair on January 15, 2013  Latest Property News

MP’s approve 1% Housing Benefit Increase. But will housing becoming unaffordable for those on welfare?

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Jan 092013
 

r_seaman@hotmail.comLast night MP’s approved the government’s controversial Welfare Benefits Uprating Bill, limiting increases in benefits to 1% for 2 years from April 2014. Pensions and disability benefits are exempt from the cap but housing benefit is not. The bill, which still has to be approved by the House of Lords, was opposed by Labour but passed by 328 votes to 262.

According to LSL Property Services, nationwide rents increased by an average 3.4% in the year to November 2012, with a 6.9% increase in London over the same period. It is easy to see why the government wants to get a grip on the spiralling welfare budget but we can not help but wonder the effect of a 1% cap on those benefit claimants seeking to find a home in the private rental sector.

At RentFair, we receive more enquiries from people looking for private landlords who will accept housing benefit tenants than on any other subject. With the supply of rental properties in most parts of the country exceeding demand, landlords can afford to be choosy about who they accept as tenants. Most landlords, given the option, would prefer so-called “young professionals” to occupy their property as opposed to someone claiming benefit. And the point is that most do have that option. There is little logic to this:  a single parent, pensioner or someone recently made redundant would not make a worse tenant simply because circumstances mean they have to depend on housing benefit. Logical or not, it is a fact that benefit claimants are excluded from the majority of private rental properties. Capping housing benefit payments to well below the level of rent inflation will presumably exacerbate the problem.

Some argue that housing benefit has been far to generous for too long and that capping payments to “greedy private landlords” is the only way to get rent inflation under control. There is some merit to this argument and certainly we are aware of landlords who have taken on benefit tenants and then simply raised the rent to the maximum claimable LHA rate. But in many parts of the country there is no shortage of working tenants who are willing to pay the asking rent and the fact that benefit claimants are priced-out of the market will be irrelevant to most landlords.

What are the likely consequences? A gradual exodus of benefit-claimants to areas of cheaper housing? Living with mum and dad? More homeless? The country can not afford to subsidise rents as it has done in the past but the transition is going to be painful.

 Posted by RentFair on January 9, 2013  Housing Benefit, Latest Property News

Your views count

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Nov 282012
 

submit views to housing committeeAnyone who wants to see a change in the regulation of the private rented sector should submit their views to the Communities and Local Government Committee here.

The Committee is holding an enquiry into the private rented housing sector and has invited submissions of no more than 3,000 words by 11am on 17 January 2012.  There is no guarantee that the report will bring about any changes but the Committee’s views will be influential and may be taken into account in deciding how to frame future government policy.

Views on all aspects of the private rented sector are welcomed including:

      • the quality of housing
      • the level of rents
      • regulation of landlords
      • regulation of letting agents
      • regulation of HMO’s
      • tenancy agreements and length of tenancies
      • how council’s are discharging their homelessness duty using private landlords

Now’s your chance to get those opinions off your chest!

 Posted by RentFair on November 28, 2012  Latest Property News, Property Market

Landlord and Tenant Disputes

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Nov 092012
 

Tenancy agreements can run for many years so it is unsurprising that disputes arise from time to time.

In the event of a dispute it’s good to initially establish where you stand legally. This may be clear from the tenancy agreement. If not, there is a large body of law on landlord and tenant disputes, particularly under the Housing Acts of 1988 and 1996.

Here are examples of the rights of landlords and tenants:

Tenants’ rights

  • To know the identity of the landlord;
  • For the landlord to ensure the property is safe and well maintained;
  • For the deposit to be placed into a government approved protection scheme;
  • Not to be harassed or disturbed in the property; and
  • Protection from unfair charges and rent increases.

Landlords’ rights:

  • Access to the property at 24 hours notice for inspections and repairs;
  • To charge the tenant for repairs to damage caused by them or their guests;
  • To receive the agreed rent and other charges; and
  • For the tenant to seek permission where required (eg. to sublet the property).

In most cases it’s best to try to resolve matters informally at first. If this doesn’t work, the next step is generally to use a form of alternative dispute resolution (mediation or arbitration). Mediation involves a neutral third party who assists the disputing parties to come to an agreement. In the case of Arbitration, the dispute is referred to an expert third party to make a decision.

Alternative dispute resolution is becoming more popular as it is perceived as less expensive, time-consuming and stressful than court action. It also enables the parties to choose who will resolve their dispute and gives them more confidentiality. In some circumstances the law requires the parties to use alternative dispute resolution before taking court action. In addition, tenancy agreements often state that a specific arbitrator is to be used to resolve disputes.

Some private landlords are registered with the Housing Ombudsman. In this case, the parties can refer the dispute to the Ombudsman for a non-binding decision free of charge.

Specialised forums are in place to resolve certain kinds of landlord and tenant disputes. Private tenants who think their rent is too high can appeal to a Rent Assessment Committee. The Committee makes a decision to lower or raise the rent which can only be challenged in the High Court.

If the dispute relates to a deposit that has been placed in a government approved protection scheme, the body running the scheme will resolve the matter in the first instance. They will provide a dispute resolution service free of charge and will hold the deposit until the matter is resolved.

If it is not possible to resolve the dispute using these methods it might be necessary to take legal action. However, before doing so it is strongly advisable to seek advice from a solicitor specialised in landlord and tenant law.

This is a guest post provided by Contact Law.

 Posted by RentFair on November 9, 2012  Landlords, Legal, Tenants
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