Latest Renting News

Rental Increases

According to the Office for National Statistics, rents in the private rental sector are up by an average of 1.4% in England, 0.6% in Scotland and 1.2% in Wales since December 2018. Between January 2015 and December 2019, rents have risen by 8.5%. However, the numbers don’t tell us everything. A survey performed by ONS found that landlords are much less likely to increase rents for existing tenants and, if they do, the increases are a smaller percentage. This indicated that landlords are eager to keep reliable, existing tenants rather than experience a period where their property doesn’t provide an income and the other costs associated with finding a new tenant.

Though there has also been an increase in inflation, this doesn’t match the rent increases perfectly, meaning that renting is still lucrative for landlords. Finding a new tenant may offer financial benefits, but it’s necessary to consider the costs involved in advertising, vetting as well as the other associated impacts.

The Opposition Call for Housing Court

MP for Sheffield South East and chair of the HCLG Select Committee, Clive Betts, has called for a housing court that can help landlords with legitimate repossession cases. There is a call for and by the government to implement policy that both protects tenants and supports landlords. The government is looking to abolish no-fault evictions and mandate a certain standard of living for tenants.

However, Clive Betts has warned that, without section 21 evictions, there will need to be an increase in rents to protect landlords and a way for landlords to evict tenants that do not pay their rent.

Things seem to be moving in a positive direction, but finding a balance between protecting tenants and supporting landlords will take time and hard work. This is something we’ll be keeping our eyes on.

Proving Right to Rent

With all the uncertainty that comes with Brexit means that EU citizens in the UK are looking for some reassurance about what will happen after the transition period. Labour MP, Catherine West, received an answer to her question about whether the Home Office plans to provide physical documentation to EU nationals with settled status to ensure they are not victims of discrimination from potential landlords and prospective employers. The Home Office have said that those with settled statements will be able to evidence their entitlements and status online. For the moment, EU citizens can rely on their passports or other identity documents.

COVID-19 UPDATE

Date: 17th March 2020

Dear all,

We are writing to advise that we are continuing business as usual and wanted to tell you about a few changes we have made to ensure the health and wellbeing of our residents.

  • All contractors especially those operating on multiple sites have been instructed to wash their hands before leaving site and again upon arrival at another.
  • Site inspections/meetings with residents may be suspended temporarily.
  • We have advised the multipurpose cleaner to ensure they are instructed/continue to use anti-bacterial dettol spay for all hard surfaces.


The management is continuing to monitor the situation closely.

Please see below helpful guidelines on washing your hands and how to reduce the spread of germs. Please feel free to share with your colleagues as well as further information available from NHS and WHO:

The NHS website has provided these current guidelines as of 16th March 2020:

covid 19


You can find more detailed official information on these pages here:

https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response

https://www.nhs.uk/conditions/coronavirus-covid-19/

Kind Regards

Advance Block Management

Additional Licensing and What it Could Mean for you

Residents in Camden could see their rents rise after the council has confirmed they’re considering renewing a scheme which would mean all landlords would be required to take out a license in order to rent out their property. At the moment, only homes of multiple occupancy need this sort of licensing unless there is a local or additional licensing scheme in place. If considered successful in Camden, this could spread throughout the country and renting more costly for landlords in Birmingham, Manchester and throughout the UK.

Camden Borough Council started a 3-month consultation period allowing landlords, tenants and other residents the opportunity to express their thoughts, reservations and hopes for the scheme. According to the council, the continuation of the scheme will protect tenants from rogue landlords, but there are some real concerns.

Firstly, the council proposed charge is around £1300 per applications. These costs are unlikely to stay with the landlords, therefore tenants in Camden will be looking at a significant increase in their rents just to cover this charge.

Another concern is the fact the national government already has the tools to tackle poor management. With over 400 regulations and more than 150 acts of Parliament affecting private landlords and how they are allowed to operate, the authorities should already be doing more to root out bad behaviour through civil penalties and rent repayment orders by landlords without adding an extra fee on top.

In addition, will these charges even lead to better conditions? The council will pursue landlords that haven’t paid the charge, but will they be vigilant against those who pay the fine but still rent out properties in substandard conditions? These questions have yet to be answered by the council and many tenants and residents don’t hold out much hope. Staff will be focused on chasing the fee rather than improving the property management standards.

Instead of renewing the current scheme, we believe the council should establish landlords and rental properties through council tax records. This won’t require self-identification, unlike licensing, and will ensure landlords can’t operate under the radar. Additional licensing has some potential benefits, but the costs on both sides, are worrying for landlords, tenants and residents alike.

What Landlords Need to Know About Coronavirus

With the country on lockdown, people are losing their jobs or being forced to go on leave, the spread of COVID-19 is raising questions for landlords. This blog aims to help you get all the information you need in regards to lettings and this pandemic.

If your tenant has been financially impacted by the virus, as a landlord, you can apply for a three month buy-to-let mortgage holiday. Mortgage providers have agreed to let landlords self-certify that their tenants have been affected and on the understanding this holiday will be passed down to tenants. The financial burden can therefore be lifted temporarily on both parties.

In addition to mortgage holidays, employers can access a HMRC grant that covers 80% of their worker’s salary up to £2,500 in order keep employees when operations are shut down. There is also support for those who are self-employed or freelancers. Anyone who doesn’t benefit from these schemes can apply for universal credit.

Gas safety inspections are able to continue as they are deemed as key workers during the coronavirus crisis. Everyone involved must practice social distancing and be careful at the time of the inspection. Landlords have been encouraged by GasSafe to organise an inspection as there are a limited number of inspectors and there may be issues with tenants being struck ill. If it’s not possible to book an appointment, landlords need to make sure this is documented and that they have made a reasonable attempt by contacting at least 5 or 6 inspectors.

If the tenant refuses access to the property for any reason, it’s imperative landlords attempt to rearrange the appointment as soon as possible and document this process too.

If student tenants have returned to their parents’ homes, they may try to demand a refund of rent or an end to their contact. This is entirely up to you. It’s important to note that your contracts are still binding in these cases and you would be within your legal rights to continue your contract.

This is a very uncertain time for everyone, including landlords. The guidelines by the government should help landlords be able to continue their business and retain goodwill with tenants. Please keep safe and well during this difficult time.

New Electrical Safety Rules

From July the first, five-year safety checks will be mandatory for all new tenancies and rolled out for all existing tenancies in the spring of 2021. Landlords who fail to comply will be faced with charges of up to £30,000!

The new rules state that landlords must perform pre-tenancy and five yearly checks of all wiring and appliances. Though this is a great way to ensure the safety of tenants and the property itself, there are concerns about the timeframe. Landlords have mere months to ensure they’re complying and the system takes time. To comply property owners must:

  • Have the electrical testing inspected
  • Receive a written report with the results and when the next inspection must take place
  • Give a copy to tenants within 28 days
  • Give a copy to the local authority, if it asks for one, within seven days
  • Keep a copy and give it to the person carrying out the next inspection. 

If work needs to be performed on the property to meet renting requirements, these improvements must be made within 28 days, the property owner must get written confirmation that the work is done, a copy of which will be given to new tenants along with the copies of the initial report.

If landlords don’t comply, the local authority can get involved by serving a remedial notice. Once this is served, a property owner has 28 days to comply or 21 days to object to the decision. If the changes are not made within 28 days, the local authority can gain access to the property to make the changes themselves though the landlord can appeal this decision. When the local authority performs the work, they can then recover the cost from the property owner. However, if the tenants refuse access, the landlord will not be considered in breach of their duty.

It’s absolutely vital that the electrics and wiring in a property are safe and further checks are a great way to do it. However, the timeframe offered by these new regulations could cause difficulties to property management throughout the country.

Neighbours Using Loudspeakers

Noise complaints are one of the biggest causes of disputes between neighbours and, unfortunately, too many people have had to deal with neighbours playing incredibly loud music with no regard for the time of day or any consideration for their neighbours.

People who enjoy having their music loud may argue that they have the right to enjoy their leisure time however they see fit, especially at a reasonable time. However, the law unambiguously comes down on the side of people who wish to be protected from excessive noise. Thanks to the Environmental Act 1990, the Noise Act 1996 and the common law of nuisance, refusing to lower the volume can result in both the Environmental Health Department and the police getting involved. This can lead to an abatement and even an anti social behaviour order that can have harsh punishments if violated.

As a residential management company, it is vital we understand how to minimise and mitigate any problems before they get to that point. We would encourage residents to move speakers away from adjoining walls, get acoustic mats, suspend speakers from the ceiling or even get smaller speakers in a modern, surround sound set up. This would allow you to retain the same noise satisfaction while minimising any disruption to your neighbours. We also advise turning down the base control and communicating with your neighbours. If you know when they’ll be out of the home, save the music blasting until then. More often than not, this compromise will be greatly appreciated.

As a block management firm with clients in Birmingham, Manchester and other bustling cities, we also understand that noise complaints are often directed at businesses situated in residential areas. These premises are not immune to the law and we recommend they work to understand what their requirements are to avoid tension with their neighbours or involvement from police and other enforcement agencies.

As for residents, if the advice we’ve offered above still isn’t helping things with your neighbours, maybe invest in some high quality headphones. These won’t bother your neighbours and the sound can follow you around your property.

If you’re having issues with the noise from your neighbour’s speakers, politely speak to them if it is safe to do so. Most people don’t even realise they’re being annoying and will endeavour to solve the problem once they know about it. There are other routes to take if that’s unsuccessful but we suggest talking first or involving the block management team.

Our Short Guide to Dealing with Noisy Neighbours

A recent Which? Survey found that almost 25% of people have had an issue with nuisance neighbours in the last year. This survey also found that 64% of people dealing with this problem had no idea where to find help and advice.

People are most likely to have disputes with their neighbours in the UK and the most common reason for this contention is noise.

There is only so much a property manager can do when it comes to noisy neighbours so it’s important to check your lease if you live in a block of flats.

So what do you do if you’re having an issue with noisy neighbours?

This guide aims to help and advise residents through all possible options and contingencies to ensure they have all the tools needed to get this issue resolved.

To residents – this is what you need to do

The first thing you should do is speak to your neighbours. One in three people find that this is the only step they need to take and often a chat will solve this problem immediately. Most noisy neighbours genuinely just don’t realise they’re being annoying! Very few people are actually unbothered about the people around them and most are simply unaware.Pick a good time to speak to your neighbour.

For example, avoid doing so if they’re having a party or approach it in a very careful manner. Try and catch them in a public place or have a casual chat over the garden fence or in your building’s landing. This can make it a loss less intimidating for you than knocking on the door and also helps your neighbour not feel attacked. Be reasonable when speaking to your neighbour rather than throwing accusations but have examples on hand to back up your points. It is also a good idea to have a solution in mind (for example, that you would appreciate if they kept their trombone practice before 8pm). If you do feel unsafe, have a friend or relative accompany you.

If talking to your neighbour doesn’t work, you might consider getting the local authority involved. Be aware that noise complaints will go on record and could make it more difficult to sell your property. Escalating the complaint may also escalate tensions. Your neighbour could end up in court so keep this in mind.

Your local authority may suggest mediation and this is something you should consider if you’re serious about reducing the noise. A trained mediator can help you and your neighbour understand each other better, it’s free and often very successful. Mediation is government funded but doesn’t involve the law, which can make it a great alternative to court if both parties are willing to go and get involved with resolving the issue. Court action should only be considered as a last resort.

If the neighbour is a leaseholder, their noisy ways could be in breach of their lease. It is very possible that they could potentially lose their property. Of course, we still recommend talking to your neighbours first!

This is a general letter and some of it may or may not apply to your property. If in doubt please refer to your lease or contact us for more information on 0345 652 0026.

Published: 25th September 2019

Landmark Discrimination Case Puts Fault with Management Company – Not Landlord

A man with Multiple Sclerosis in London was awarded £9,000 by a judge after successfully arguing the management company did not make reasonable adjustments, which would have allowed him access to the leisure club in the block of flats in which he lived.

In addition to the money awarded to the man for injury to feelings, the court also ruled the management company had breached its duty to make reasonable adjustments and applied a discriminatory practice in what works it undertook.

This landmark case has found that management companies are not landlords but, in fact, service providers, which means they have a duty under the 2010 Equality Act to make adjustments for disabled people. This is a consideration landlords do not need to make under the law. This wide ranging judgement is likely to have an impact on management companies that have facilities similar to the ones found in Mr Plummer’s building.

Mr Plummer moved into his luxury apartment in 2010, the main appeal of which was access to Leisure Club situated in the building. As swimming is one of the few kinds of exercise suitable for those suffering with MS, he was hoping to be able to limit the progression of his illness as well as retain his independence by swimming. However, he found that accessing the facilities was difficult and unsafe with his disabilities.

The court heard that the management company running the estate for the benefit of leaseholders which also owns the leisure club, rejected requests brought to them by Mr Plummer and his wife to make the club more safely accessible to their disabled patrons. During the month the management company announced that the Council was refunding the club £78,500 in overpaid business rates, Mr Plummer submitted costing for adaptations, which had been recommended by an inclusive design and accessibility audit. This audit estimated the cost of the adaptations at approximately £5,000 plus VAT.

The judge noted that the management company had never made a proactive move to make adjustments. The court also found that the company applied a policy of only undertaking works that benefitted all residents. This placed people with disabilities at a particular disadvantage including Mr Plummer who had faced indirect discrimination. This was furthered by a “humiliating”survey that asked all residents their opinion on Mr Plummer’s requests, whilst emphasising the disputed costs of the adjustments. The court said this “reinforced existing prejudices” and was used to “justify its unreasonable stance in circumstances where it knew very well what the outcome was likely to be.”

This ruling has made a very clear distinction between management companies and landlords and what is expected of each. Although landlords are expected to soon have to follow similar rules, at the moment, management companies in Birmingham, Manchester and throughout the country will be expected to proactively work towards allowing those with disabilities access to all the services provided.

Tenant Fee Explained

On June 1st 2019, the Tenants Fees Act came into effect, which is going to have major repercussions for tenants and landlords alike. This act drastically limits what costs landlords are permitted to pass down to tenants and can result in a £5,000 fine if violated. This act is designed to protect tenants from unfair fees and predatory landlords by making it more affordable to move between rental properties. This came into effect on the 1st of June for new tenants and will be universal on May 31st 2020.

Here’s what you need to know about the new law. The landlord will be financially responsible for paying for the services they contract; all upfront costs (except those we detail below) are now prohibited. This includes administration charges, inventory fees and reference checks. Landlords are still able to charge a deposit (capped at five weeks rent) and a holding fee as well as charge for:

  • Lost keys  – Though the cost must be deemed reasonable and they should be able to provide a receipt
  • Late Rent Repayment Fees- If a tenant is more than two weeks late with a payment, Landlords and letting agents can charge a late rent fee of 3% plus the Bank of England base interest rate. However, they can no longer charge for the costs incurred while chasing a late fee such as letters and admin costs
  • Changes Made to the Tenancy Agreement at the Tenant’s Request – Landlords and letting agents can charge £50 if a tenant requests a change to the agreement. If the landlord or letting agent can demonstrate that the costs of making a change to the agreement comes to more than £50, tenants can be charged more. This £50 does not apply to renewals or extensions to the tenancy.

It has been said that Landlords will have to recoup these lost fees from somewhere, which some believe will inevitably lead to higher rents. As a property management company covering many major cities in England (including Manchester and Birmingham), we are concerned about the knock on effects to the people and properties we take care of as we aim to provide top quality block management services.

As block managers we would primarily speak to the leaseholder/owner of the property. However when they are rented out we would speak to the tenants too and often hear their concerns about the rental market.

We understand that there are some landlords that unfortunately take advantage, which is why we always advocate for transparent costs and fees. However, we also know that keeping a property up to specification can be a costly endeavour.

So how does all this affect property management companies? We deliver a valuable property management service and ensure properties are safe, meets statutory requirements and are well managed. We believe that fees should be reasonable and transparent.

We’re passionate about property management and are hopeful this will positively improve the lives of landlords or tenants.

Time will tell how this will affect the rental market.

SECTION 24: big change for landlords

A big change for landlords as the government has introduced the much feared change by landlords, Section 24.

Section 24 of the Finance (no. 2) Act 2015 might mean that over half of UK landlords will be pushed into a higher rate of tax despite their income not having increased, and some might end up renting at a loss.

Landlords used to have been able to deduct the full cost of their mortgage or loan interest payments on their rental properties before they pay tax. Unfortunately from April 2017, these costs will no longer be considered in calculating taxable rental income.

The government marked a start in April this year of a four year phase in of section 24. This change will gradually be made over the next four years and therefore will not impact on tax returns being submitted now however it can make major change to a landlords financial situation.

Who will this impact?

This change will impact landlords who have one or more residential properties which earn a rental income and are owned in their own name. Commercial properties are excluded along with properties being owned by limited companies.

What is the change?

The government announced that interest and financial cost related to the mortgage or loans will no longer be an allowance expense for landlords when calculating the rental profit. This is a major change in the property industry and will affect many landlords who use their property as either a top up on their salary, nice income for retirement or a complete business income from the many properties the landlord(s) own.

Limited company

The change will not affect limited companies that own the properties. Subject to the landlords financial situation, many are changing their ways and incorporating companies to own the property. Legal and tax advice must be sought in order to determine this option being suitable for yourself as each landlord circumstance can be different to another.

 

Interests to be restricted

Under the change interest charges will no longer be an allowable expense. This means that the full income of the rent will be taxed rather than the amount after the interest expense. This may make life very difficult to landlords who have adopted an interest only business plan to rent out properties.

Example of costs:

If a property earns you a rental income of £1,000 per month, with £2,000 allowable expenses and £2,000 interest costs, prior to this change your rental profit would be £8,000. Under the new change the interest cost will no longer be an allowable expense, and therefore the rental profit would be increased to £10,000. This amount would than be taxed subject to your tax bracket.
The change will gradually be phased in over the next few years. In the tax year 2017/2018 the mortgage interest and finance cost will be restricted to 75%. In 2018/2019 it will be restricted to 50%, in 2019/2020 to 25% and in 2020/2021 it will be 0%.

If you are a landlord or thinking of becoming a landlord, we would recommend you to seek independent legal and tax advice.

Advance Block Management