Another Name for Universal Credit

Just a snippet from “Inside Housing” – it appears that the Department of Work and Pensions IT team have been having difficulties with various design faults and delays.  It is in such disarray that panic and disorder are widespread.  A little levity helps with problem situations, so the IT have started to refer to it as “ubiquitous chaos”!

Seems little hope for the rest of us!

By Sharon Betton

 

Private Rent Scaremongering

A survey of 2,000 people across the country found that 39% of private sector tenants feared that the cost of housing may force them to move out of their local area.  It also found that people living in the private sector are more unhappy with their homes than the average person in Great Britain.

2,000 is a very small sample with the size of the private rented in Britain – over 10 million people at present and set to increase further;   less than half had complaints – again, not significant numbers; in addition, where did they get this sample from?  It goes against previous findings where private sector tenants were very happy with their accommodation.

Undoubtedly, tenants living in London and the South East may feel themselves priced out of the private rented market; in that case, they live with little security and possibly a poorer standard of landlord and management, even if the property is itself to a good standard.

Although the survey is not accredited, this really does play into the hands of the Labour party, already starting their election campaign and planning big changes to private renting, this seems to support their calls for a rent cap.  Many areas do not see rapid rent rises, have found their rents static for some time, in some cases, years. Many landlords will also say there is no necessity for longer tenancies, having tenants that live with them happily for many years.

Labour’s plans for a rent cap may  be pre-empted by Camden, who are considering a rent cap scheme.  The London School of Economics have been commissioned to examine the feasibility of some form of rent control, as it is an area which has rapidly-rising rents. They will consider incentives to landlords for property improvements, which will help tenants by improving standards.

It seems that other boroughs are considering similar steps.  This is the way to combat areas with uncontrolled rents spiralling, leading to the fears expressed by the 2,000 that were subject to the survey – authorities where they know this is a problem should take action themselves, rather than waiting for Government to impose restrictions across the country, in many areas of which it is totally unnecessary.

By Sharon Betton

 

 

Commercial Tenancies

A recent case made me think about “commercial tenancies”.  The landlord in question had let a property to his brother.  The brother put in a claim for housing benefit and had it refused – it was not a “commercial”  tenancy.

In looking at the details, it was easy to see why they had reached this conclusion.  There are rare occasions when housing benefit will be paid to a tenant related to the landlord, but it must be clear that this is a proper tenancy, set up the same as any other.  I don’t guarantee it would work, but it at least gives you something to argue with!

-          Don’t lie about the relationship – if asked, be honest; if it is later discovered that you did not disclose a relationship, it would constitute fraud and would create suspicion of any future dealings with housing benefit/Department of Work and Pensions.

-          Do not buy a property and put a relative in it as the first tenant – it needs to be part of your portfolio, not purchased just to help your relative.

-          Since 2007, landlords have been able to be certain exactly how much local housing allowance the  tenant is entitled to – so don’t give relatives properties that are bigger than they require.  You would not do this for a stranger, so don’t do it for your brother!

-          Set the tenancy up in exactly the way you do others – so take a deposit and protect it.

-          If the rent you want is higher than their housing benefit/universal credit allowance, then make sure he starts paying this shortfall immediately.  This again proves this is a commercial tenancy.

-          Have a proper rent account, clearly showing arrears and follow the normal procedure with arrears.  Send warning letters and serve a section 8 notice as soon as the tenant is in 8 weeks arrears.

-          Don’t put anything in writing which you would not give to a tenant who has approached you from a newspaper advert.  For example, don’t write “I will not evict” – again, indicates this is not  a commercial tenancy.

Using these tips does not guarantee that the claim will be allowed as not a commercial tenancy, but it gives a better idea that you are a professional landlord, unlikely to rent to a relative as a favour.  The best advice is usually, don’t mix family with business, if you want to be sure of your rental income.

Bolton Members Meeting – 5th August 2014

Dear Landlords,

You areBolton Arena Meeting invited to an open meeting at:

Bolton Arena Middlebrook Leisure & Retail Park

Arena Approach, Horwich, Bolton

BL6 6LB

ON TUESDAY 5th AUGUST 2014 AT 8.00 PM

 The speakers on the evening will include:

Inayat Adam – Oyster Energy

Inayat along with a colleague will be presenting on reducing energy use within the home using several innovative products available.

Michael Regan, Jamie Oliver – Bridge Insurance and Keith Winder – QBE

Will update members with information about the NWLA Insurance Scheme.

Peter Watson – Housing Standards Unit – Bolton Council

Peter will be giving us an update on “Developments and Projects in Bolton”.

Matthew Watson -Trade Point – B & Q 

Matthew will explain how best to use the Trade Point card and make the most of the savings available by shopping as smart as possible in tandem with other offers.

We will of course have the last 30 minutes for time to network with tonight’s speakers, guests and other members.

We have arranged for tea, coffee and biscuits to be available from 7.30 pm, the meeting will start at 8.00 pm prompt.

Hope to see you there!

Yours sincerely,

Harold Lever

NWLA Chairman

 

Manchester Members Meeting, 1st July 2014. By Sharon Betton

The July meeting we marketed as “the Summer Event” at the Irish World Heritage Centre.  We had a good turnout as we had arranged a buffet and had an excellent speaker arranged.  Comment from two members who attended was “venue was great, the buffet was exceptional, loads to eat for all tastes, the apple pie was the best I have had in a very long time” – definitely agreed with that!  Are you sorry you missed it?

Our old friend, Phil Gibbs, of P. R. Gibbs & Co gave an in-depth presentation overview of Market Value and Worth, with a commentary on valuation methodology, investment appraisal, investment yields and the benefits versus risks of debt funding.  As always, Phil’s delivery was excellent and gave a lot of useful and interesting information but, perhaps aware that a lot of people like to mull over information, he also provided a really informative pack, a useful resource for anyone considering investment.  We will have a few packs available in the office next week, should you have been unable to attend but want to benefit from Phil’s expertise. He is also happy for anyone to ring him to discuss.

Following a main speaker cancelling on the day we were very lucky, in that Peter Whitehead, of Whitehead’s solicitors , was attending and though without preparation, he managed to speak well for a short time on what they do and what they can offer.  He has already written one article for the newsletter and has since offered some guidance on deposit protection in the light of Superstrike. We very much look forward to working with Peter and his team in the future.

Dr. Margaret Collier ended the meeting with an explanation of how the Rent Service has changed its’ method of calculating the rents payable in a Broad Rental Market Area.  They are now only required to use a representative sample of 20% of the rents in an area, which seems low and not likely to be truly representative.  Another case of the private landlord getting the rough end of the stick!

It was a useful and enjoyable meeting and we were glad to see so many attend, though like Oliver, we always want some more!

Come to the next meeting in Manchester on 2nd September 2014, the next in Bolton on 5th August 2014. Both meetings start at 7.30pm.

 

 

Deregulation Bill

Tenancy Deposits (Clause 31)

A new clause was inserted which would amend the tenancy deposit provisions in the Housing Act 2004. Oliver Heald explained that the 2004 Act was not intended to affect deposits paid to landlords prior to 2007 (when the relevant part of the 2004 Act came into force) and that “it was never the intention that landlords who had protected deposits and who had given their tenants information about that protection should then have to reissue the same information about the deposit protection each and every time the tenancy was renewed, although the same deposit would continue to be protected in the same scheme from one tenancy to the next”.20 However, in the case of Superstrike v Rodrigues [2013] EWCA Civ 669, the Court of Appeal had held that “the deposit must be treated as having been paid by the tenant afresh at the start of the statutory periodic tenancy”.

Mr Heald said this case put a large number of landlords “at risk of court action and open to a financial penalty, despite having done what the sector and successive Governments considered to be the right thing”.

Clause 31 would therefore ensure that if a landlord had complied with the tenancy deposit protections requirements for a tenancy, s/he would not need to comply with them again for a replacement tenancy with the same tenant.

Where the requirements were not complied with for the original tenancy (for example if it began prior to 2007) and a replacement statutory tenancy was in place, clause 31 would give the landlord extra time to comply with the requirements.

The link is

http://www.parliament.uk/briefing-papers/LLN-2014-024/deregulation-bill-hl-bill-33-of-201415

By Margaret Collier

 

 

Meeting with DWP, Salford 3rd July 2014 by Sharon Betton

I have been to several of these meetings now and am pleased to say that I am managing to make the voice of the private landlord heard.

The main content of this meeting was Salford going “live” with Universal Credit on 21st July, in Eccles and Worsley Jobcentres for selected postcodes. As clients will be told where they must make their applications, I have concerns for how they are meant to get to their designated Jobcentre Plus; certainly where I live, it would be 2 buses to get to Worsley, one to get to Eccles but this is a service that runs twice an hour.  Cost and time implications should be considered.

There were a few points made which may be of interest.

-          Credit union accounts can be used, it appears, but how soon particular credit unions will be able to do this is dependent on individual credit unions;

-          Although it is being looked into, there is no provision currently to save an application half way through.  Tenants need advising of the documents they need to provide before they start the application process so they can go through it in one go – estimates for completing a claim were about 45 minutes, with appointments to use the IT being given for 1 hour;

-          For people in temporary accommodation, the housing costs can be taken out of universal credit and the housing element paid direct to the landlord;

-          Change-of-circumstances can be done over the telephone, but change of bank details must be done face-to-face;

-          Although a tenant on housing benefit may have his rent paid direct to the landlord, there will be no automatic transfer when they go onto universal credit – the tenant will have to make another case on grounds of vulnerability for an alternative payment arrangement.

Updates from the other partners were interesting, as were some of the statistics given by those who had contacts with housing associations.  One partner is aware of an association with 57 tenants on Universal Credit, with 55 of them needing alternative payment arrangements.  Another knows of an association with 7 on universal credit, 5 of whom owed over £500!  This was a great contrast to a previous meeting where it had been stated 78% had no worries about budgeting.

A question was asked about sanctions – it was answered that where a client is sanctioned, it is the personal allowance that is cut, not housing costs; however, this would be checked to ensure this is the case.  A representative of Citizens Advice stated that private landlords need the same access to the DWP as social landlords and they are working on this.

Few of our landlords are in Salford, but the steps they are going through should be mirrored by other authorities as Universal Credit is rolled out over the NorthWest.

 

MANCHESTER MEMBERS MEETING – MAY 2014

NEW VENUE ATTRACTS INCREASING NUMBERS

Members attending the Manchester members meeting in May at the Irish World Heritage Centre received a class-act presentation entitled Housing Disrepair and Avoiding Claims from solicitor Matthew Wilson of Whiteheads Solicitors.

Matthew has the benefit of having worked on the other side of the tracks, as a representative of tenants who make claims of disrepair, so he has a broad view of the situations that landlords may find themselves in regarding disrepair, some of which has been triggered by tenant behaviour.

The presentation covered the landlord’s repairing obligations, both contractual and statutory, the essentials of the case which a tenant can rely on to make a valid claim and the defences which a landlord can use.

It is a pleasure to find a solicitor who has a proper grasp of landlord and tenant issues and we look forward to further liaison with Matthew in the future.

Sharon Betton, our Business Development Manager was her usual competent self in bringing the group up to date with current reports and developments in the world of renting, ranging from the imminent introduction of Universal Credit in the North West to the current delays in processing benefit claims.

Typically, Sharon is a mine of information on how to manage property effectively and avoid pitfalls which can cost landlords dear.  Proper record-keeping was again identified as a key component of success.

Sharon also drew the attention of the audience to the increased publicity she is generating for the NWLA, both in her numerous contributions to Inside Housing and in her provision of new material for our updated NWLA website.

Finally, Margaret Collier gave a personal insight into the historic effects of rent controls, a topic dealt with more fully elsewhere in this newsletter.

ALERT

Please note that the July meeting is one not to miss.  Not only will it feature Phil Gibbs on investment in property and a representative from Safe Agent, it will also be the occasion of our summer buffet.  Book the date now – 1st July at the Irish World Heritage Centre.  The venue has extensive free parking and is easily accessible.

By Margaret Collier

 

Invitation to Julie Hilling, M.P.’s, listening event

A few weeks ago, I wrote to Ed Miliband, following his announcement that if Labour were returned to power, they would introduce 3 year tenancies and what is described as a “rent cap” but is in fact just a move to regulate the frequency of rent rises by having this specified in the tenancy agreement.  The response I got answered none of my points and merely repeated the party line regarding 3 year tenancies, but made the (incorrect) point that landlords could still evict for rent arrears, giving 2 months notice!

I felt that Julie Hilling, M.P., had seemed to understand the landlord position when she spoke at our meeting in 2012, so I wrote to her, sending copies of my letter and the response.  I got a somewhat better response, because within days I was invited to attend a “Listening Event” for businesses in Bolton.

I was placed on a table with small businesses, which I did not quibble with because most of our members (with one or two notable exceptions) are small businesses.  There was a healthy discussion and some of the businesses were very open that they felt they could not expand because of the VAT system.  It appears that someone earning £80,000 from the business is exempt from VAT, whilst someone earning £85,000 is liable for tax on the full sum.  A suggestion was made that the VAT should only be payable on the sum above £80,000, which would be a considerable saving and could encourage some to allow for some business expansion.

Julie ended the event by asking for suggestions from each table that she could take back to Government, with a promise that what was said was listened to and that there would be more events.

It was an interesting morning and I was glad I went, not least because I managed to put the landlord’s point of view on several occasions.  To make sure the message had been heard, I stayed and had a short conversation with Julie on the specific points that caused me concern.  She was clearly not aware of certain aspects of private renting which hopefully I was able to enlighten her on.

I left feeling that in Julie, we had someone who really did want to listen and carry opinions forward – not a feeling I had from the response from Mr. Miliband’s secretary.

By Sharon Betton

 

Tenants hit by bedroom tax cutting back on food

An item in the 30th May issue of Inside Housing showed the devastating impact of the bedroom tax.  Research was conducted by Ipsos Mori on behalf of the National Housing Federation and interviewed 1,002 housing association tenants.

Findings were that:

  • 32% have cut back on food;
  • 26% have cut back on heating;
  • 46% needed to borrow money to pay their rent.

The physical effects of not being able to feed themselves and not keeping warm are well known.  Having to borrow to pay rent has emotional and psychological effects.  Don’t be surprised if you have tenants approaching you looking for smaller accommodation which will allow them adequate food, decent heating and a degree of self-respect, which seems sadly lacking with social landlords.

By Sharon Betton