Update on Universal Credit

Government data released on 17th September 2014 shows that more than 11,000 households were claiming Universal Credit during August of this year.

This is a considerable increase on July, when 7,460 households were claiming and June, when 6,630 were claiming. As anticipated, the rate at which the programme is rolling out is accelerating.

39 job centres were processing claims for Universal Credit by mid-August and all are now accepting claims from couples, as well as single people. It is anticipated that roll-out to families will follow later this year, though dates for expansion have not been announced, yet.

Between April 2013 and August 2014, 13,260 started to claim Universal Credit; as one of the selling points of Universal Credit was that it would encourage people into work, how successful has this been? In fact, over 2,000 had moved off benefit before 14th August 2014. It is difficult to gauge how successful this is, without looking at comparable figures for a similar period before Universal Credit, it would appear that even in the very early stages, it seems to indicate that for some, at least, it has worked.

A DWP spokesman has said that by the end of 2014, “around one in eight job centres in Britain will be offering Universal Credit” and by the time Universal Credit is fully implemented, eight million people will receive their benefits by Universal Credit.

So far, results are being seen as positive, despite the arrears that social landlords now find they are struggling with.  However, claims so far have been “clean” claims, the single homeless who would not, generally have multiple benefits.  As it implementation progresses, the claims will become more complex.  Be prepared – you may think it can’t happen yet, but you need to be ready for it.  Make sure your tenants have bank accounts, tell them you understand the difficulties when their claims transfer and payment is made monthly in arrears; if your tenants have had difficulties in payment of the rent, make sure you ask them to apply for direct payments to you.  Ignoring it and hoping it won’t happen won’t help; being prepared and ready for it, will.

By Sharon Betton

Housing Factory by Sharon Betton

Procure Plus is a North West consortium with 40 social landlord members. They have hired consultants to look at the feasibility of developing an off-site assembly plant, which it is believed could produce 1000 properties a year for the members and could be up and running by 2016. It would be the first of its’ kind in the social sector and would cost between £2m and £3m to develop.

I am a great fan of pre-fabricated housing, because I saw this at first hand when visiting Japan. Virtually every house there is “new” and my own little house, built in 1936, was considered quite an ancient monument!

Japanese houses are expected to last 25 years, and then start again!  The home-buyer goes to a house “super-store” – a site with examples of every kind of property they build.  The purchaser then chooses the rooms that are needed, the wood finishes, wall decoration, built-in furniture.  Of course, with a 25 year life-span, that means that all the latest innovations are installed at the time of assembly.

Why am I such a fan?  Well, no decorating for a start!  Walls have a vinyl wall covering.  Toilets have warm seats, a built in bidet and blow-dry facility and automatic flush – I would kill for one of those!  No radiators cluttering up walls – heating is via fan heaters at ceiling height.  Built-in cupboards in the lounge but little other furniture – a table and chairs and a small couch;  this was used by the dog, I was told (after I had sat on it!), because others either used the dining chairs or knelt on the floor. Light switches have a small light when they are off, so no scrabbling around for a light-switch in the dark.  Houses have a space on the ground floor which is for storage; in Britain, we would make it into another room, but storage is important in Japan so it is built into the properties.  Bathroom and a toilet are also on the ground floor, with most of the  living accommodation on the upper floors, though in the house I stayed in, there was a room on the ground floor for the grandmother of the family.

We would probably feel the living accommodation was small, with a lounge area with a table and chairs and a small, but very well-planned, kitchen. Another toilet and a washing alcove with a sink were just off the kitchen.  A novelty is the “Special room”, which houses a Shinto shrine and is used only for special occasions.  Upstairs were 3 bedrooms with built in wardrobes.  No bathroom on the top floor!    2 of the bedrooms were quite small, though space maximised by using sliding doors.  Futons Japanese sleep on are not like the European version we see in Ikea – they are thin mattresses which are folded up during the day with no supporting framework.

The one European bed in the house was slept on by the mother – a single bed.  Having slept on both, I preferred the futon.

Most properties had no garage space though bicycles were left at the front.  There was a small garden at the back, but very little used, other than for the dog.  Japanese people prefer to go to the large ornamental parks that seem to abound, picnicking and barbecuing under the cherry blossom.

Properties built in this manner are sensibly planned and give the purchaser exactly what they want; they keep up with innovation and economies of scale are possible.  I am glad that social landlords are considering the advantages of a “housing factory” – it would be nice if an entrepreneur decided to build one for private landlords to access.

A pronouncement from the Lib Dems!

Electioneering is hotting up prior to next years’ general election and the party conferences.  The most recent is the Lib Dems announcement that if returned to power they intend to build 300,000 homes – a year!

This seems ambitious in the extreme and given the amount of money that is being put-in to bring empty properties up to a lettable standard, perhaps unlikely.  It seems whoever is asked to form a Government in 2015, the country will be full of building sites!

We can only hope that some of this comes to fruition, if only for the sake of the jobs created.

An exciting development  is  planned for the 10 local authorities that make-up Greater Manchester to set-up a new organisation, TopCo.  This will negotiate long-term funding schemes with the Government, Europe and agencies, to make up the short-fall between homes currently in construction (4000) and the 9-10,000 which it is believed are required.  Pooling investments between authorities, pension funds and wealth funds could stimulate development.

Chancellor George Osbourne is being urged to raise the level of stamp duty to £500,000 in the Conservative manifesto.

Anne Main, Conservative MP for St. Albans, calls the duty ‘perverse’ which  disproportionately affect London and the South East; Dominic Raab, Conservative MP for Esher and Walton has called for opposition to the Mansion Tax, which will affect anyone with a highly valued property and to overhaul stamp duty.

Many will feel that both these measures would be helpful to home-owners and landlords.  What a pity it is all lumped into  vote-catching.

By Sharon Betton

Sanction problems acknowledged by DWP by Sharon Betton

Finally acknowledging what has been said since the new legislation around jobseekers came into force, the Department of Work and Pensions have been criticised in a report they commissioned, written by former Policy Exchange economist, Matthew Oakley; they have promised they will tackle the issues and put in place some of the recommended 17 improvements.

Sanctions for Jobseekers and Employment and Support Allowance claimants can trigger the stopping of housing benefit.  This is because the claimants have not realised that a sanction is a major change in their financial circumstances and the council should be notified of this.  A new claim can be in-put on the basis of “nil income” so the housing benefit will continue to be paid.  It is also possible that claimants have not realised that there is no automatic notification through the computer system.

The DWP, in responding to the report, have said claimants will be advised that they must keep the authority advised of their situation and that eventually, there will be an IT solution, but that is in the future.  I would advise that you make it part of your new tenant procedures to remind any who are 100% benefit dependent that if they are sanctioned, they must contact their local authorities.

Traffic Light Scheme for Tenant Assessment by Sharon Betton

A scheme introduced in Hartlepool in 2008 is now being suggested by the National Landlords Association as the way forward and should be adopted country wide, to help landlords to decide which prospective tenant to take. Information  from “Inside Housing” 25th July.

It is a traffic light scheme, with prospective tenants applying to the Council for membership, and then being granted a rating of green, amber or red.  A green card means they have full membership with no anti-social behaviour or rent arrears; the amber (yellow) card gives provisional membership and may indicate an arrears problem in the past, or perhaps because they are unable to obtain a reference due to release from prison or homelessness; a red card shows rejected membership and indicates issues of anti-social behaviour or a history of rent arrears – so either avoid or be prepared to put intensive management in.

Though Linda Igoe, housing advice manager at Hartlepool, said the scheme was designed to “help landlords to sustain tenancies”, but it could also be very useful for young people, often not looked on as good tenants, working or not, for those that cannot get a reference from an obstructive former landlord or those who have had a period of homelessness.

Daniel Brewer of the Real Lettings Scheme has concerns that tenants should not be black-listed.  Sadly, whether intended or not, there will always be an element of this; if this scheme was introduced nationally, not only those with the red card would be viewed with caution, but those who choose not to be registered would be questionable.

If private sector landlords are to continue to help the many very vulnerable people in need of homes, there must be some help for them to safe-guard their businesses.  A national traffic light scheme may just provide the extra security they need.

66,000 homes left empty in London by Sharon Betton

As the election looms closer, we will hear plenty of statistics relating to what has been done and is not working, what needs to be done etc.  Mr. Miliband has promised in his manifesto that, should Labour win the election, 200,000 new properties will be built by 2020.  This is an impressive figure and will cost the country many millions to achieve.

I have queried whether this cost is achievable and whether it is necessary.  An article in “Inside Housing”, 25th July, states that one-third of the 200,000 properties required, are left empty in London.  66,000 properties across 22 London boroughs are empty and more than 1,500 homes in the City of London are not in permanent use.

Whilst Camden have imposed a 150% rate of council tax on empty or second homes,  15 boroughs have not, so far, chosen to use this power.  Boris Johnson, the Mayor of London, has lobbied boroughs to up their council tax rate as a means of combatting the empty properties, saying “it is completely unacceptable having so many empty properties lying around when we have a housing crisis that is causing misery”.  The City of London, however, offers a 50% council tax discount to the owners of empty homes.  They are actually offering an incentive to keep homes empty!

We need the homes we have empty to be filled before any future Government engages in profligate spending of our money on further properties to be left empty.

Further Electioneering?

I suppose that following the high profile of Universal Credit, Mr Miliband’s pronouncement about longer tenancies and rent caps,  that Nick Clegg had to put his vote-catching scheme into the arena.

He has now revealed that for months, he was opposed to the “bedroom tax” and would end it for existing tenants, particularly if they had registered to transfer to a smaller property (though often these are unavailable).

How well has he thought this through?  For existing tenants, finding their Housing Benefit cut at present because they are over-accommodated, or at risk of losing their properties due to rent arrears, this will be a popular move and possibly a vote-winner.  However, he is quite happy that housing associations and local authorities should only allocate properties of the size that the applicant(s) require.  Of course, some years down the line, the tenant may no longer need that size property – will he be protected as an existing tenant?  And, of course, this will not assist private sector landlords, who have had to limit either the size of the accommodation they can allocate, or the rental income they can expect.

I think over the next few months, we will be inundated with sound-bites, all designed to persuade the populace that a vote for them will answer the ills of living in modern Britain.  We can only hope it does!

Annual Survey

Annual Survey by Sharon Betton

It seems a long time ago that I started my employment with North West Landlords Association.  It now feel as though I have been here forever and believe me, I enjoy every day.  Thank you to those landlords that have been part of that.

One of the things I was keen to introduce was an annual survey, to find out what we could do better; RLA do quarterly surveys and we felt an annual survey may help with this, as well as putting us on a professional basis, so for the last 2 years, we have sent out a survey by e-mail and also handed them out at meetings.  We have even offered an incentive of a gift voucher, but to little avail – response has been extremely poor.

The Committee have discussed this as we near the time for it to be prepared;  the surveys RLA do allow them to extrapolate important information about the sector. The response to ours as been so poor, all we can extrapolate from that is that our members are too busy to complete surveys!  Of course, there is another interpretation – that our landlords have such frequent contact, through regular meetings and easy accessibility to the office, that any improvements we can make are notified to us – training on Universal Credit being one which we have now devised and will publicise shortly.

The decision has been made that we will not ask members to complete a survey this year.  What we may do, via e-mail or the website, is ask perhaps one significant question.  Only one, but that may give us something to work with!

So here’s the first:

Will Universal Credit change the way you run your letting business?      Yes                  No.

This is a big question because The answer  can be fed back to the Department of Work and Pensions.

As always, any landlord who has a suggestion to make to improve our services, can contact us at any time by telephone, e-mail or in person.  Criticisms are treated  positively, as ways to improve, so don’t hesitate to get in touch. We also like to hear the things we do right, of course!

HMRC Webinar for Landlords

Last night we held a training webinar at Bolton Arena for NWLA members. This event was hosted by the Digital Delivery Team at HMRC on the subject of ‘Your Property Income & HMRC’

This session was provided free of charge to members and we had a good turnout of 50 members in total.

The webinar was hosted by a team of four people at HMRC via an open microphone and included a slideshow presentation via the internet. There were no technical issues, the whole thing ran very smoothly and overall seemed to be very well received by all.

The session was around an hour in total and included an overview of subjects including Tax Returns/Registration/Income from property where one or more properties are involved /Running a business/Expenses - what to claim and what not to/Furnished
lettings/Holiday lettings/Overseas properties/Renting a room/Capital gains tax
etc.

After each section there was a chance for landlords to ask questions and have them answered by the technical team. These questions were answered quickly and in full with lots of additional useful information. I am sure everyone who attended came away having learnt something new.

This is a pre-recorded webinar of the subject from last night ‘Your property income and HMRC’

http://www.hmrc.gov.uk/webinars/self-employed.htm#16

Here is the E- Learning link to online courses, this service is free of charge and will be updated and maintained by HMRC.

http://www.hmrc.gov.uk/courses/syob2/letting/index.htm

This link is for pre-recorded webinars, you can also register to watch live webinars.

http://www.hmrc.gov.uk/webinars

A useful telephone number HMRC helpline number for any landlords with questions regarding their rental properties is as follows – 0300 200 3310

Many thanks,

Amy

Avoiding Eviction Proceedings being thrown out of Court

By the time landlords get to the stage of Court proceedings, rent arrears have risen considerably beyond the 8 weeks/2 months arrears level that they have to be when the notice is served; if using a Section 21, the 2 months notice period has well passed and your tenant is still there, delaying any plans to sell or re-furbish.

Taking Court proceedings is the last thing landlords want to do, because of the delays and the high cost – £280 if done through the Court, £250 if the on-line possession claim route is used, but there is worse to come, if it gets to Court and possession is not granted the process then has to start all over again.

This is often because of small errors which can be avoided, with care.

Here are a few pointers to try and make sure that you issue notices correctly and will only have to issue possession proceedings once:

-          Issue the notice to whoever the tenancy was issued to and in the name  used when issuing.  So a joint tenancy should be ended by a joint notice.  If a company name is used for the landlord, then the notice should also have the company name.

-          Make sure you are clear about which notice you are serving.  Most landlords prefer a section 21, as a ground is not needed and it is accelerated possession proceedings.  It requires 2 full months notice, possibly more as it should follow the dates of the tenancy.

-          Although commercially available notices will include a “saving clause”, the easiest way to avoid problems is to use the tenancy dates.  So if a tenancy starts on the 2nd of the month, the tenancy runs monthly to 1st of the following month and the notice should therefore be issued before the 2nd, to end 2 months hence on the 1st.

-          If rent arrears, use a Section 8 notice quoting grounds 8, 10 and 11; ground 8 is the mandatory ground, which means a Court should order possession and says that either 2 months or 8 weeks (dependent on what the tenancy agreement says) rent arrears are owed. Grounds 10 and 11 are discretionary grounds which mean a Court must feel it is reasonable for a landlord to want possession but in cases where there is a ground 8, it adds weight.  The Section 8 notice should also follow dates, but in this case, the last 14 days of a tenancy period, so in the case mentioned, a tenancy ending on 1st of the month must have a notice issued before 15th of the month, to end 1st of the next month.

-          Have a clear rent account showing what is due, what was paid and an accumulating rent arrears total. The best way to show this information is in the form of a spread sheet.  Landlords have been known to present a set of bank statements, a Court will not take the time to go through these and come up with their own figures for rent arrears.  If trying the on-line possession procedure,  dates and figures will have to be inserted, so having a clear rent account is necessary to do this speedily.

-          Though a joint notice can be issued, when it comes to Court proceedings, the Court paperwork must be completed 3 times for each tenant.  This is done automatically in the on-line procedure.

It is bad enough having  tenants you don’t want linger in your property so make sure you issue paperwork correctly; it saves time and money.

By Sharon Betton