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

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.