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Dean Velani, the NLA’s Parliamentary Officer, looks back at the NLA’s contribution to the recent Select Committees.
Recently the National Landlords Association (NLA) was invited to give evidence to Parliamentary Select Committees.
Select Committees hold inquiries and report their findings to Parliament. Investigations can examine an existing or proposed policy, an area of public concern, or the work of one of the bodies associated with their department. As part of their investigations, the Committee calls for written evidence within the terms of reference for the inquiry. Based on this written evidence and who the Committee believe to be key stakeholders they will then put together a list of witnesses to take oral evidence from. Oral evidence is almost always held in public and the public are welcome to attend. The witnesses are questioned by the committee and their testimony taken down verbatim, to be published.
The NLA gave evidence to the Communities and Local Government Select Committee at their inquiry into the Private Rented Sector. Richard Lambert, CEO of the NLA, responded to questions on rogue operators in housing, licensing in Newham, investment to increase supply and regulating landlords. Members of Parliament are not known to be shrinking violets and their lines of enquiry were robust. However, it must be said that the NLA made simple, coherent arguments that buttressed our policy positions.
Likewise, the evidence given to the Welsh Affairs Select Committee on the impact of changes to housing benefit in Wales was a resounding success. Lee Cecil, the NLA’s representative for Wales, gave examples of the impact of welfare reform on landlords and tenants in Merthyr Tydfil. What particularly impressed the Committee and those watching were the practical solutions to current problems put forward by the NLA.
As an organisation which aims to improve the private-rented sector for everyone, it was a privilege to be given the opportunity to explain our policy position, to talk about our industry and to provide practical solutions to some of the UK’s housing problems.
Filed under: NLA
Senior Policy Officer at the NLA, David Cox, shares some good news for NLA members and accredited landlords in Birmingham
Birmingham City Council has sent a strong message to landlords who let in the city. They have committed to supporting good landlords by offering significant HMO license discounts to NLA members and accredited landlords.
Landlords who belong to a professional body such as the NLA and landlords accredited with the NLA or the Midlands Landlord Accreditation Scheme (MLAS) will pay reduced fees for their first five year HMO license applications and their five year license renewals.
For accredited landlords and members of the NLA, the cost of a new five year HMO license application will be £700. The cost of a five year renewal will now be £400. In contrast, those landlords who have chosen not to become accredited through MLAS or the NLA and those who are not members of a professional organisation will pay £1,150 for a new 5 year licence (£450 more than NLA members and accredited landlords) and £850 for a 5 year renewal (£450 more than NLA members and accredited landlords).
And landlords who fail to meet the legal requirement to apply for a licence will only be given a one year licence and will be made to pay the full fee again one year later in order to get a 5 year licence.
These significant discounts are thanks to the hard work of the NLA’s West Midlands Regional Representative, Mary Latham, who has been working with Senior Officers at the Council since 2011.
Mary proposed an alternative approach to the fee structure when the first HMO licenses were due for renewal over two years ago. The proposal was based on offering discounts to those landlords who have taken the trouble to learn, through an education based accreditation scheme, and ensure that they are supported by joining a recognised landlords’ association. On the other side of the coin, those landlords who have broken the law by not applying for a HMO licence on time would be expected to cover the extra costs involved in tracing and chasing them. With the Council recovering their costs from the bad landlords, the good landlords could be licensed at a much lower fee and the council would still balance their books.
After many discussions, Birmingham City Council accepted the proposal in a report. It said:
“The fee structure for the HMO licensing scheme has been reviewed in the light of a proposal submitted by the National Landlord Association on behalf of their members operating in the city.
“The headline cost of the fee has not been altered but the levels of discount to members of certain professional organisations and members of the Midland Landlord Accreditation scheme have been increased. This will encourage landlords to respond more rapidly and penalise those who fail to comply. Those providing incomplete applications will be penalised as will owners and managers of unlicensed properties.”
In addition, Jacqui Kennedy, former Director of Regulation and Enforcement at Birmingham City Council who endorsed the proposal, recognised the need to encourage good landlords to work with the city:
“To continue with the structure of fees and discounts set in February 2012 will cause damage to the reputation of Birmingham City Council in its dealings with the body of reputable private landlords and have a negative impact on dialogue intended to encourage owners to provide decent secure homes for the vulnerable and in need.”
This just goes to show what we can achieve when working in conjunction with our local authorities.
Mary Latham, Regional Representative for Birmingham, says:
“I am delighted that Birmingham City Council is supporting the good landlords. Professional landlords, who provide much needed affordable HMO accommodation, will really appreciate this recognition of their efforts.
“The NLA have an excellent relationship with this Birmingham City Council and we will continue to work with them to meet the housing needs of people living in the city.”
Filed under: NLA
Chloe Bryer, a student from the University of Kent, shares her tips for student tenants.
Over the past week I have dipped into the wonderful NLA PR Office, gathering information about the private landlord sector, writing blogs, news and press releases. With my experience of renting for a year combined with work experience for the NLA, I thought I might be well placed to pass on some tips to students renting for the first time…
Most of the student accommodation in Canterbury is relatively nice however you can find a few places not quite up to scratch. Our house was relatively new and came with unlimited bills, internet and a TV package – this seemed a good deal at the time. We opted out of the hassle of paying individual bills but we were soon to learn we had chosen a more expensive year for ourselves, and as Christmas approached we had an epiphany: we would be paying for heating, gas, and electricity throughout the holidays! It definitely would have been cheaper and more sustainable to have had normal bills, especially as we were feeling optimistic about the weather during the summer term.
- Students beware! This is not a money-saving option! Of course there are perks, living in a sauna throughout the winter was luxury, but not if you’ve only got little dollar in your pocket!
We also had a revelation that we were liaising with an agent, not the landlord of our sweet little house. Having an agent shouldn’t be problematic, but trying to contact them and never hearing a reply is. On the whole our agent was relatively good in solving our problems; however it appeared he was juggling other properties as well as his own property portfolio, meaning he had little time left for us. In addition, if it was a parent who rang him instead of us students, the issue would be resolved in a matter of hours.
- Students it is okay to pester your landlord if you need something fixing urgently.
- You’re allowed to be persistent. It is also okay to act professionally.
- They are running a business and are getting paid to provide you a service.
- However, you are using their service and should want them to trust you, e.g. care for the house!
Students you should also know where money is going – especially your deposit! If you DONT have mummy and daddy paying for you then make sure you know who your paying and when!
- Try to plan, save and don’t leave your payments outstanding! You may receive a reminder, but not all agents/landlords are this kind.
- The better you are at this the better your credit history will be.
- Do not hand over unprotected money up front, it is absolutely necessary to check if your deposit is protected and part of a Tenancy Deposit Scheme, like my|deposits.
Hope this has given a few pointers, but remember student tenants; you have the right to question and liaise with whoever you’re renting from, just like any other tenant.
Filed under: NLA
Richard Blanco, London Representative for the National Landlords Association (NLA) explains why the UK must not return to Rent Control.
There has been a worrying increase in calls for rent controls recently. In December 2012 the Labour Party Private Housing Policy Review called for annual indexation of rent increases once the initial rent has been set. More worryingly, MPs including Jeremy Corbyn, and this week David Lammy, seem to be calling for a return to something akin to 1970s housing policy. Lammy’s comments were in response to the testing of the Government’s overall benefit caps, equivalent to a benefit ceiling of £350 per week for single individuals and £500 for families.
During an interview about the caps on LBC Radio, David Lammy stated that rents in London had risen by 7% in 2012. This is indeed the case and it is so because house prices also rose by 6.8% in the capital during the same period; increasing rents merely reflects the increasing cost of buying and maintaining rental property.
The government hopes that the relaxation of planning constraints will encourage more house building and it has set local authorities ambitious targets. The Bank of England’s funding for lending scheme has increased the flow of mortgage finance and the government hopes its help to buy scheme will enable buyers with small deposits to gain access to home ownership. However, fundamentally we need to build more housing and free up mortgage finance to take pressure off rents. The private rented sector now stands at just below 18% of all housing stock while social housing’s role continues to decline.
All of the government measures – if they are successful – could take years to feed through into the housing market. Meanwhile, benefit claimants affected by the welfare cap are, on average, £93 per week short of the amount they need to pay their rent. The answer according to many is for landlords to reduce their rents accordingly.
But we forget that landlords need to cover their costs to stay in business and will only continue to invest if there is the possibility of profit. Why is it that shops, garages, plumbers and other small enterprises can make a profit but landlords shouldn’t?
The idea that landlords are raising rents just because they can also seems to be gaining currency at the moment. Yet according to the NLA’s latest tenant survey, 67% of tenants say their rents had not risen in the last twelve months. Many landlords opt not to raise rents once the tenant is in situ, only reassessing rents between tenancies.
So, are rents controls really a viable solution?
Residential letting contracts were de-regulated by the Housing Act of 1988 and the 1989 introduction of the Assured Shorthold Tenancy. Prior to that, rent controls were the norm and the private rented sector shrank to 8% of all housing stock. A re-introduction of rent controls would cause the sector to shrink back into decline.
In addition, lenders would be less likely to offer buy-to-let mortgage finance if there uncertainty over whether rents could cover mortgage payments. Landlords would stop buying and many would withdraw from the market as their businesses cease to be viable.
And institutional investors who work on a 20 to 30 year timescale and are just starting to take an interest in building to let on a large scale would certainly about-turn on any investment proposals.
Indeed, the artificial suppression of rents sounds like an easy solution. But it would reduce the stock available through the private-rented sector. The lack of growth in the social sector means that demand would not be met, so we would see an increase in homelessness and families would be placed in temporary accommodation at huge cost to the public purse.
Rent is a product of the value of housing, which is in turn a consequence of its availability and the cost of provision. You cannot influence the former without addressing the latter. Rent control is not the answer.
Filed under: NLA
There’s good news for landlords and tenants alike with rent arrears at their lowest level since March 2010.
According to the latest NLA Landlords’ Panel, 41 per cent of landlords have experienced instances of rental arrears in the last 12 months, down nine per cent year on year and back to levels previously seen in quarter one 2010.
This is great news for all parties and shows that tenants are coping financially, despite the welfare changes.
And in more good news for landlords, void periods in private-residential property have fallen to their lowest level in over a year, helped by strong and consistent tenant demand.
According to the research, enduring tenancies are on the rise with only 33 per cent of landlords experiencing vacant periods in the last three months, down 13 per cent year on year.
At a regional level, voids are greatest in the North East of England where 54 per cent of landlords have experienced empty periods in the last three months and lowest in London where only 20 per cent of landlords have experienced voids over the same time frame.
Additionally, the average duration of a void has reduced to 60 days from 63 days in quarter three and 69 days earlier in 2012.
It is in every landlords’ business interest to maintain good, long lasting tenancies and avoid arrears.
To keep instances of arrears at bay, be sure to carry out the appropriate tenant checks when recruiting tenants to ensure they are in a position to meet their rental commitment. It is also wise to build a good, open relationship upon meeting new tenants to ensure tenants feel able to approach you if they are experiencing problems. This open relationship will allow you to work through the situation to help ensure an enduring tenancy using a short term repayment plan or reduced rent arrangement.
Issuing a Section 8 Notice to initiate possession proceedings as a result of long term arrears must always be a last resort – professional landlords will favour good, sustainable tenancies over short lived tenancies that result in periods in which their property will lie vacant.
And at a time when demand far outstrips supply, it is imperative that empty properties are filled quickly, following any necessary maintenance and improvements.
The private-rented sector affords tenants flexibility, so as tenants’ circumstances change, there are occasions when a property might be empty.
The NLA’s advice to landlords looking to minimise void periods is to talk openly with their tenants about their future plans. This will give the landlord some idea of when the property might next be empty and allow them to make any improvements and plan advertising activity in good time.
Filed under: NLA
Dean Velani, the NLA’s Parliamentary Officer, takes a look at the 2013 Budget and what it means for the UK’s housing market.
Today the Chancellor of the Exchequer, George Osborne MP, delivered his annual Budget Statement.
There were no shock announcements for the landlord community. Unfortunately the speech didn’t grant the reform of Capital Gains Tax (CGT), Stamp Duty Land Tax or Energy Saving Allowance that we were hoping for but there was good news for home buyers as George Osborne took the Budget as an opportunity to unveil the Help to Buy Scheme.
The scheme will be available to all buyers of new build properties, including first time buyers and those looking for support to step up the property ladder.
It offers two levels of support. The first offers an equity loan for those who can afford a mortgage and who can provide five per cent of the deposit. The government will then offer the remaining 20 per cent contribution to the deposit. This loan will be interest free for 5 years and can be repaid when the property is sold and the only constraint is that the property cannot be worth more than £600,000.
The second level of support is the Mortgage Guarantee in which buyers will have access to high loan to value mortgages to help more tenants to buy their own homes.
Help to Buy will launch in April 2014 and will be available for an initial period of three years
The NLA welcomes the new scheme and hopes that it will encourage a fair and balanced housing market. Increasing the supply of new housing is imperative to getting the country’s finances moving. Encouraging a diverse housing stock is central to this and we hope that the Government’s Help-to-Buy scheme will stimulate the owner occupied market.
However, more targeted measures are needed to address the chronic shortage of housing across all tenures. Had the Government decided to offer Capital Gains Tax Rollover Relief for landlords, they would have enabled capital gains reinvestment that could have provided more housing for rent in an increasingly pressured market.
On a poisitve note for the rental market, we welcome the significant increase in funding for Build to Rent. This is an acknowledgement of the evolving and increasingly important role of the private-rented sector in the UK’s housing market and we look forward to this initiative providing more good quality affordable accommodation for rent.
We hope that increased supply and the Help to Buy scheme can together support the Government in its journey towards an ‘aspiration nation’.
Filed under: NLA
The NLA’s Richard Price shares news of two new fire safety videos.
Regular visitors to the NLA’s You Tube Channel will know that, with videographer Jon Smith, we have launched two new videos to promote and help explain the complex world of fire safety.
The first video details information and guidance on fire risk assessments, and types of systems, from the simple smoke alarm to the more complex. This should be viewed by all landlords. The second video goes on to explain additional fire safety considerations for larger Houses of Multiple Occupation (HMOs).
We hope that the videos will remind landlords of their duty of care to their tenants. The NLA recommends that landlords carry out regular fire risk assessments to identify what fire hazards exist, the level of risk to occupants and visitors and what can be done to mitigate and control risks.
The NLA highly recommends that all residential properties are fitted with a fire detection and alarm system. More complex systems are required for certain types of accommodation such as large HMOs or where vulnerable people are housed.
Landlords are also required to ensure any furnishings provided adhere to the fire safety standards and ensure the property has adequate escape routes.
With an increasing private-rented sector, landlords who take their responsibilities and duty of care to tenants seriously contribute a positive impact on the number of preventable injuries and fatalities caused by fire in the home.
To learn more about your fire safety obligations, visit the NLA’s Online Library at http://www.landlords.org.uk/library/safety/fire-safety-overview
The NLA provides a Fire Safety Logbook which will help landlords be aware of their fire safety responsibilities. It can also be used to record the significant findings of a risk assessment, log the regular tests undertaken, and includes a cut off notice of advice for tenants. Visit www.landlords.org.uk/shop to purchase a copy.
Filed under: NLA
Last month the UK lost its AAA credit rating from Moody’s to an AA1 rating. Dean Velani, the NLA’s Parliamentary Officer, reflects on what this could mean for landlords.
According to Moody’s, the UK’s “subdued” growth prospects and “high and rising debt burden” are weighing heavily on the economy and, as a result, the credit rating agency has opted to reduce the UK’s credit rating to AA1, with other agencies including Standard and Poor’s and Fitch expected to follow suit.
Whilst this has a great many consequences for the UK at a national and international level, it is sure to have an impact on families and businesses of all sizes, including landlords and property investors.
In essence the ratings provided by Moody’s and their ilk are no different from the type of credit reports landlords order to assess prospective tenants, they are a rough indication of whether or not the subject is ‘good for it’ . i.e. will they pay me what they owe. In the case of the UK’s rating it means that lending will become slightly higher risk and therefore slightly more expensive for the Government, trickling down to effect the cost of other credit eventually.
This all means the downgrade will only reaffirm lenders’ caution and could mean that landlords find it increasingly difficult – if that is possible – to access affordable finance. In the last year 32% of landlords have not been able to expand their portfolio due to difficulties accessing buy-to-let finance. This figure could well increase as a result of the credit rating downgrade.
And reading between the lines, interest rates on existing lending are likely to increase. Whilst George Osborne claims that “the UK’s creditworthiness remains extremely high”, it is likely that it will become more expensive to borrow money.
Whilst the Chancellor is seemingly sticking to his guns on his economic plan for economic recovery, his strategy isn’t going as he had hoped and we may well see a change of course. In fact, Tory backbenchers are upping calls for cuts in next month’s Budget.
If the Chancellor were to restructure his economic plans, we could see further cuts to welfare. This will serve to stretch benefit recipients’ finances further and could lead to increased rental arrears and thus encourage more landlords to exit the LHA market.
Changes to the economy could also bring tax reform, in particular the removal of tax exemptions. This is not the news landlords want to hear as local authorities are discussing reduced council tax benefit for empty properties.
The future looks pretty grim for investors, landlords and tenants alike but the true impact of the credit rating downgrade will become clear in this month’s Budget. All eyes really are on George Osborne.
Against this backdrop, for the NLA’s roundup of the Budget, keep an eye on the press and campaigns pages and we’ll be blogging about it too!
Filed under: NLA
Changes to Council Tax exemptions are a hot topic for landlords at the moment. NLA Director and Local Representative for East Sussex, Tony Richard, tells us more…
The Government will be reducing the budget for Council Tax benefit by 10% as of the beginning of the next financial year (April 2013). This has implications on individuals and properties which have to date been exempt from Council Tax.
In Scotland and Wales, councils will subsidise the reduction in order to provide the same level of support for 2013 as under the current Council Tax Benefit scheme.
In England, local councils will be making up this 10% by increasing the number of people who are eligible to pay council tax. So those who have previously been exempt from council tax, such as those in receipt of council tax benefit, will now be making a contribution whilst those in receipt of pension credit are still exempt.
In addition, the reduction in Council Tax benefit will affect the amount of council tax relief a landlord receives while their properties are empty for improvements or renovations. This is an issue that the NLA has been campaigning on for some time.
Whilst each local council is able to decide upon the exemption period for empty properties in their area, we are concerned that some landlords will be charged Council Tax whilst their property is empty for improvements or renovations.
Worryingly, in some areas such as Hastings, Councils have opted to reduce the Council Tax exemption period for unoccupied properties from six months to just one month.
It is indeed essential that we encourage property owners to bring empty properties back into use. Although most landlords will want to have their properties tenanted for the majority of the time. But it seems that some councils are unaware that there are in fact times when landlords and property owners need to make use of void periods as they present an opportunity to carry out routine repairs and redecoration. Furthermore, the process of marketing, selecting tenants and referencing can take well in excess of 30 days and it is important not to rush landlords and tenants through this process as the right tenant must be found for the property.
In addition, there is pressure on landlords to conduct energy improvements to their properties such as those under the Green Deal, which the NLA fully supports and promotes. But these changes can take time and void periods are an ideal opportunity for landlords to carry out essential improvements for their tenants’ benefit, as well as to future proof their properties and do their bit for the environment.
Instead of requiring landlords to pay Council Tax after 30 days, the National Landlords Association proposes that a 3 month Council Tax exemption period would be more suitable. Such an approach has already been successfully adopted by several councils, including South Norfolk. This allows landlords and property owners to ensure their properties are in the best condition for their tenant.
Ultimately, landlords will always prefer to see their properties tenanted, but they must be allowed to make important improvements and not be rushed through the process of finding the right tenant.
Filed under: NLA
David Cox, the NLA’s Senior Policy Officer and Green Deal Guru, shares news of the NLA’s exciting new Green Deal solution.
On Monday the 28th January the long awaited, eagerly anticipated Green Deal did finally launch.
And today we have launched an exciting new Green Deal product to help you take advantage of the scheme: NLA Green Deal. NLA Green Deal is an all-in-one solution that provides everything from initial assessment of a property to finding a provider and installing the improvements.
Works can be completed during convenient periods and often at little disruption to the tenant. It’s a win-win situation and the NLA actively encourages all landlords to register their interest by visiting the NLA Green Deal website.
But before you get stuck in, it’s a good idea to read up on the scheme and what it involves. To learn more about the Green Deal, take the time to read this series of articles that explain all there is to know about the scheme and what’s involved.
Whilst it may seem slightly complicated initially, in essence the cost of energy efficiency improvements made under the Green Deal, such as loft and wall insulation, will be paid through a loan attached to the property’s energy bills. However, due to the energy savings achieved by the improvements, the energy bill will never be higher than it would have been if the work had not been carried out – it is cost neutral.
And ultimately, it is in the landlords’ best interest to make their properties more energy efficient as properties found to have a poor Energy Performance Rating (F or G rated) after 2018 will no longer be fit to let under the new legislation. Furthermore, warm tenants are happy tenants and if their energy bills are competitive, even better.
Whilst we’re only at the beginning of the Green Deal journey, it’s reassuring to hear landlords’ enthusiasm towards the scheme. I’ve already spoken to many members about the Green Deal and those who have taken the time to find out exactly what it’s about are keen to get involved early.
One member I spoke to this week was planning his six monthly inspections and was going to take the opportunity to sit down and talk to each tenant about the Green Deal before taking the next step and booking a Green Deal assessment.
The feedback to date has been really encouraging and I hope this scheme really does encourage landlords and home owners alike to improve the energy efficiency of the UK’s housing stock.
To register your interest today, visit http://www.nlagreendeal.org.uk/
Filed under: NLA