Weekly landlord news digest: 18/1/19
Another week, another raft of headlines for landlords to navigate and digest.
Read on to find out when the tenant fee ban is expected to start, where in the UK offers the best rental yields, the latest on universal credit and more about a new scheme to tackle rogue landlords.
Tenant fees ban will start from 1st June
Letting agents will no longer be able to charge private renters fees for setting up tenancies from 1st June 2019. The Tenants Fees Bill passed a final reading in the House of Lords with minor amendments, and now faces a final reading by MPs before receiving Royal Assent.
“We need to enable agents and landlords following Royal Assent to become compliant, but we intend for the provisions to come into force on 1st June, 2019,” said Lord Bourne of Aberystwyth after the bill passed through the Lords. “This would mean the ban on lettings fees would apply to all tenancies signed after this date. The sector has been waiting for legislative certainty and agents now need to ensure that they are fully up to speed and taking steps to implement changes.”
Measures in the bill include:
- Landlords and letting agents only allowed to charge fees for replacing locks, tenancy changes requested by the renter and bills such as utilities and council tax
- Holding deposits are capped at one week’s rent
- Security deposits are limited to five week’s rent
Councils given £2.4m to fight rogue landlords
Housing minister Heather Wheeler has offered £2.4 million between 50 councils to pay for extra staff, training and digital tools to identify and prosecute rogue landlords. This follows recent investigations by The Guardian and ITV News.
“Everyone has the right to live in a home that is safe and secure, and it is vital we crack down on the small minority of landlords who are not giving their tenants this security,” said the minister. “This extra funding will further boost councils’ ability to root out rogue landlords and ensure that poor-quality homes in the area are improved, making the housing market fairer for everyone.”
Some of the money will go to Walsall, West Midlands, where the council is flying drones with thermal imaging equipment to pinpoint suspected overcrowded homes. London and Manchester will split a £330,000 award to track down problem landlords with rented homes in more than one council area.
“The new funding will be used to support a range of projects that councils have said will help them to ramp up action against criminal landlords – for example, to build relationships with external organisations such as the emergency services, legal services and local housing advocates,” said a housing spokesman.
Universal Credit U-Turn for rent payments
Work and pensions secretary Amber Rudd has signalled a fresh approach over paying rent to landlords for tenants claiming Universal Credit.
In a wide-ranging speech that introduced changes to some of the more controversial Universal Credit measures, she announced a slow down in extending the benefits overhaul and that the government will remove a cap on claiming the benefit for parents with more than two children.
Speaking later, the move was confirmed by Housing and Communities Secretary James Brokenshire, who said: “The measures will ensure that landlords can receive rent from those on Universal Credit directly into their accounts. This important change will help strengthen the choices and opportunities available for those on Universal Credit to secure the homes they and their families need.”
Buy to let rents keep pace with inflation
Buy to let rent rises are keeping pace with inflation in most parts of the country.
The average UK private tenant was paying £921 a month rent in December – up 1.5% on a year earlier. The monthly increase was 0.3% from November, says data from tenant referencing firm Homelet.
Chief executive Martin Totty said: “This year we’ve seen stability in UK rental price growth, with increases broadly in line with inflation. For landlords there remains a sustained demand for property, with the private rental sector continuing to provide the market with both flexible and long term housing options.
“Average rental values in the capital rose by over 4% in the latter stages of the year. We would expect this to continue in London, if demand for property outweighs supply.”
Go north for the UK’s best rental yields
The best buy to let returns are in the North with yields of up to 5%, according to a new report.
Although rents are falling in the North East, yields are still the highest in the country, says LSL Property Services, which owns letting brands Reed Rains and Your Move.
The North West is also favoured with a 4.8% annual yield. In London, yields fell to 3.2%, followed by drops in the East of England to 3.6% and 4.2% in the East Midlands.
Across the UK the average residential property investment yield was 4.3%.
Compensation row letting agent shuts office
Buy to let landlords in Slough, Berkshire, have protested outside letting agency Berkshire Estates claiming they have lost thousands of pounds in rents and deposits collected for them by the firm.
Two of the landlords – Nick and Angeli Sahota – had won a £4,600 award from the Property Ombudsman against the firm. The money has not been paid.
The Property Ombudsman confirmed the agents had ignored their order to pay compensation to several landlords and that the firm had been reported to trading standards and industry regulator NTSEAT.
Meanwhile, the letting agent has been closed since before Christmas and director Lee Clarke is not responding to email. Slough Council and Thames Valley Police are investigating.
“We can confirm we are doing everything within our powers to establish the scope of the issue. It is a live investigation and is very complex,” said a council spokesman.
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