Weekly landlord news digest: Issue 25

Landlords can keep in touch with the latest property, tax and financial news in one place with Hamilton Fraser Total Landlord Insurance’s weekly landlord news round-up.

This week, Housing Minister Heather Wheeler raises concerns over landlord and council enforcement issues, we look at a mortgage lenders spotlight on how buy to let in the Northern Powerhouse is bucking national trends and research reveals how landlords are planning to extend their portfolios. In addition, we also investigate how section 21 changes could make landlords more selective and calls for improved fraud detection in the private rented sector.


Housing Minister backs landlords in enforcement row

Housing Minister Heather Wheeler has stepped in between landlords and their local council over how health and safety standards are enforced in private rented homes.

Hull City Council has scrapped issuing informal improvement notices for landlords, unless the work needed is viewed as insignificant, or the property owner belongs to the council’s accreditation scheme.

The free scheme was replaced with a formal improvement notice that comes with a charge of around £250.

The minister is urging the council to better communicate the policy to landlords, after hearing of landlord concerns at a meeting with the Humber Landlords Association and National Landlords Association (NLA)

“I was extremely concerned to hear reports that many landlords in Hull are not fully aware of, or have misunderstood, the standards they must meet to become a member of the scheme. It is crucial that you work to bring landlords with you and are communicating effectively to do so.”

– Housing Minister, Heather Wheeler

The long-running row has seen the Humber Landlords Association mount a legal challenge against the council, but the case was dismissed in the High Court. An appeal has been lodged.

The council says last year 1,400 complaints relating to defective private rented homes were received.

“Before introducing the policy and updating the Humber Landlords Accreditation Scheme, the council will communicate with landlord association members and other private landlords,” said a council spokesman.

“Hull City Council has been unfairly penalising landlords. While it should penalise landlords who don’t provide safe, habitable homes, it isn’t right that good landlords should be punished before having the chance to fix any problems they weren’t previously aware of. The vast majority of landlords want to rectify issues as soon as they arise. Councils must not tarnish all landlords with the same brush.”

– Gavin Dick, Local Authority Policy Officer at the NLA

Gavin Dick, Local Authority Policy Officer at the NLA, said: “It’s unfortunate that we had to take this matter to the minister, but we are encouraged that our collective voices have been heard and Hull City Council now needs to take immediate steps to ensure all landlords in Hull understand the Hull Accredited Landlords Scheme.”

Read more about private housing enforcement.

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Landlords could become ‘more selective’ as a result of section 21 changes

The National Landlords Association (NLA) have voiced fears that vulnerable tenants on state benefits will likely be the most affected by the abolishment of section 21.

A survey conducted by the NLA found that 57 per cent of landlords who had sought to end a tenancy in the last five years, regardless of whether they followed a no-fault eviction process or specified they had grounds for the eviction, listed rent arrears as the reason.

In addition, 43 per cent of landlords surveyed responded stating that should these government plans go ahead they would become more selective with the type of tenant they let their property to.

In a separate survey, the NLA also report that 76 per cent of landlords letting their property to tenants on Universal Credit tenants, 66 per cent of those letting to tenants on housing benefit, and 63 per cent of those letting to migrant workers had experienced rent arrears in the last 12 months.

“Rent arrears are the biggest problem that landlords face, and the main reason why they use Section 21 to evict a tenant. So if the government removes what they see as their only safety net – Section 21 – they will have no option but to become more selective. That will hit people on Universal Credit, housing benefit and other state benefits which have fallen way behind rents. They will become the biggest casualties of this ill-thought-out government policy. It’s surely not right that the most vulnerable in our society should have to struggle to find accommodation because of the government’s failure to provide landlords with appropriate powers of eviction when faced with rent arrears. We urge the government to think twice before taking this retrograde step.”

– Richard Lambert, CEO of the NLA

Landlords look north for buy to let boom

Low house prices, good job prospects and a strong demand from renters has triggered a booming buy to let market in Northern England. Rental yields of around 8 per cent  are encouraging buy to let investors to increase their portfolios when landlords across the UK are seeing investment returns decline.

UK Finance, the trade body for buy to let lenders, says tax and regulatory changes have seen landlord loans drop more than 10 per cent in the past year across the country and by 20 per cent in the south.

The changes include cuts in mortgage interest relief, increased stamp duty and capital gains tax bills and the scrapping of fees to set up tenancies.

“Lower house prices across the north, coupled with a healthy labour market and economy to underpin rental demand, mean that landlords can look to achieve yields well in excess of the UK average”

said the UK Finance Northern Powerhouse Mortgage Briefing.