Rent ‘good value for money’, say tenants

Good value say tenants

Good value, say tenants

The majority of tenants say their rent provides good value for money, according to the National Landlords Association’s latest research findings.

More than seven in 10 tenants (73 per cent) rated their rent as ‘good’ or ‘very good’ when asked their opinion on whether it represented value for money. One in five (20 per cent) perceived their rent as ‘poor’ value, while just three per cent rated it as ‘very poor’.

The findings also show that the majority of landlords haven’t increased rents in the last 12 months, with three quarters of tenants reporting they’re paying the same rent (72 per cent) or a lesser amount (3 per cent) compared with a year ago.

In total, 85 per cent of tenants said they were happy with the length of their most recent tenancy agreement and four in five (79 per cent) said that their tenancy was either renewed or continued on to a rolling Statutory Periodic Tenancy (SPT) at the end of the previous fixed term period.

When it comes to the end of the tenancy, fewer than two per cent of tenants said their landlord ended their last tenancy (1 per cent) or felt they were forced to move out because of increases to their rent (0.6 per cent). Three per cent of tenants said they decided to move on or end their last tenancy of their own accord.

Carolyn Uphill, Chairman of the National Landlords Association, said:

“It’s pleasing to see that so many tenants perceive their rent as good value because landlords face a lot of unjustified criticism for the rising costs of living.

“The NLA has long argued that rent levels in the UK are a consequence of a market economy, with the determining factor at present being a chronic undersupply of affordable housing, compounded by lethargic efforts on the part of Government to foster more construction.

“On the whole the findings are encouraging for tenants: they demonstrate that rents on private lets over the past year have remained fairly stable and show that, in reality, very few feel pressured to move out or actually have their tenancy terminated by their landlord – a common misconception.

“However, most important of all the findings suggest that the majority of landlords are in the business of providing good quality, affordable homes and are making sustainable tenancies a mainstay of most tenants’ rental experience”.

Is your rent good value for money? What do your tenants think?

Arrears? Save your tears

With 37 per cent of landlords experiencing rent arrears in the last 12 months, it is a very real risk to landlords.

With 37 per cent of landlords experiencing rent arrears in the last 12 months, it is a very real risk to landlords.

Does the thought of rent arrears make your stomach churn?

With 37 per cent of landlords experiencing rent arrears in the last 12 months, it is a very real risk to landlords. And unlike any other type of service provider, landlords are providing homes and are unable to terminate a contract with their tenant immediately in the event of non-payment. But don’t despair, there are a number of precautions that can minimise the impact of rent arrears on a landlord’s ability to meet their mortgage payments.

Firstly, build a buffer into your business plan
We suggest a business plan based on 10 months rather than 12 months’ rent.  This allows you to cover the majority of unexpected costs.

Prevention starts before you grant a tenancy
It’s essential to vet a potential tenant to check they are in a position to meet their rental payments and have a good track record with previous landlords. It’s possible to do this yourself by requesting proof of income, an employer’s reference and a previous landlord’s reference or alternatively, you could employ a professional tenant checking service to carry out checks. There are a variety of services on the market. The NLA offers a basic tenant check and a more detailed search available at a 15 per cent discount to NLA Members.

Next think about insurance cover
Landlord insurance offers additional cover to your average home insurance policy. It covers risks such as public liability and accidental damage, loss of rent and alternative accommodation cover. And rent guarantee insurance provides protection in the event that the tenant doesn’t pay the rent.

Consider a guarantor
This is a good idea if you are uncertain about the tenants’ ability to meet their rental payments – likely to be the case with tenant groups including students and those who have poor credit scores. A guarantor can be a friend or relative of the tenant who agrees to meet the rental payments if the tenant fails to do so. Ideally, the guarantor should be a UK based homeowner and you’d be wise to carry out background checks on the proposed guarantor before providing the guarantor agreement. When you’re happy, be sure to issue a guarantor agreement, available to download from the NLA website, allowing plenty of time for the guarantor to read and understand what is required of them.

Once you’ve made efforts to try to prevent arrears, you’ll still need to keep a look out for signs. After all, everyone’s circumstances can change.

Try to keep in regular contact with your tenants so that they have the opportunity to tell you about any changes such as loss of income. This allows you to discuss their future housing plans. Also, be sure to monitor receipt of rent so that you can act quickly if payment is not received.

To learn more about how you can protect yourself from the risk of rent arrears and how you can help your tenants, download the NLA’s landlord guide to rent arrears and the tenant guide to rent arrears.

Will landlords evict benefit tenants?

Richard Blanco, London Representative for the National Landlords Association (NLA)

Richard Blanco, London Representative for the National Landlords Association (NLA)

London Representative Richard Blanco gives us his thoughts on the latest news regarding evicting tenants on housing benefit.

The National Landlords Association (NLA) announced in December 2013 that half of landlords (52 per cent) say they will not consider letting to tenants on benefits according to its latest landlord survey.

Three years ago 46 per cent of landlords let to tenants on benefits, this has halved to 22% in the latest findings.  To those of us in the business this was not news, but since Sky News broke the news there has been considerable press interest.

Last week Channel 4 News ran a piece on major landlords, Fergus & Judith Wilson’s decision to evict all tenants on housing benefit, presumably by serving no fault section 21 notices.  This scandalous story has brought into sharp focus rent levels, government welfare reforms and the balance of power between tenants and landlords.  Landlords evicting tenants on benefit has become a hot topic.

The government originally estimated that 40,000 households would be affected by total welfare caps introduced in 2013, which limits families to £500 and single people to £350 of work related benefits per week.  The actual figure is lower than expected and last week was revised down to 31,000. Only two of the local authority areas most affected are outside of London, namely Birmingham and Manchester.  In East London where I am based, Tower Hamlets was originally told that 1400 households would be affected but this figure is actually 568, of which 154 are in the private sector.  Neighbouring boroughs like Hackney and Islington report similar figures.  What is startling is that these families face an average shortfall of £78.76 per week or £341 per month.  That quickly mounts up to a serious level of arrears with a tenant who likely has no other source of income.

Local authority officers are making incredible efforts to help.  Housing Options staff have created multi-agency teams with job centres, social services and other colleagues to provide intensive support.

The first option is to try and help tenants get 16 hours work or more as this exempts them from the cap.  They also investigate whether the tenant is eligible for disability related benefits, also exempt, though the application process can take up to six months.  If neither of these options bear fruit, the tenant can bid for a social tenancy (extremely hard to come by in London), look for an affordable private rented sector (PRS) property or stay put until they are lawfully evicted.  The latter will class them as homeless and the local authority will then have a duty to house them, probably in temporary accommodation.

There is a political conscience that paying benefits of more than the national wage is untenable and we all believe those who can work really should try to.  But we should recognise that the system created these scenarios by allowing people to live on high levels of benefit and that many people need a lot of coaching and help to improve their employability. To create such conflict and anxiety in our communities in such a short period of time is brutal.  The Department for Work and Pensions (DWP) may change its rules in a flash, but tenants need time to change their lives, as do landlords, housing associations and local authorities who are faced with a huge shift.

Arrears in the benefits sector are not new.  They began with the introduction of Local Housing Allowance in 2008 coupled with new rules requiring benefits to be paid directly to the tenant.  This was part of the then Labour government’s responsibility agenda, encouraging tenants to budget and take responsibility for their own income.  Some coped well and with dignity.  More vulnerable tenants struggled and arrears rose sharply.  Universal credit will continue this trend, except payments will be made monthly.  So claimants will receive one lump sum and will need to pay their rent out of it.  If it is capped, there will be a shortfall and the choice will be between food and rent.

So why are landlords deserting the benefits sector?  Of the 1.5 million landlords in the UK, many thousands specialise in this area, providing a valuable resource, particularly in areas with high levels of unemployment.  In the past 12 months, seven out of 10 landlords letting to tenants on benefits have arrears, with more than £3,000 owed to them.  Where rent shortfalls are low, £20 or so per week, some local authorities have offered landlords direct payment as a tenancy sustainment incentive.  But the figures show that in many cases the shortfall is much greater.

However, much of a social conscious my NLA colleagues and many landlords have, we are ultimately running a business and have mortgages and other overheads.  So ending the tenancy may be the only solution.  Typically landlords will have to wait until the bailiffs arrive and face even higher arrears as local authorities, mindful of their own scarce resources,  advise tenants to stay as long as possible.  But eviction must be a last resort and certainly not a policy applied to a whole category of tenants regardless of their payment history.  We need the government to extend discretionary payments to give affected families more time to work through their housing options.  The costly alternative is providing these families with temporary accommodation and that makes absolutely no sense for their welfare or the UK deficit.

The NLA calls local authorities in England to account

The NLA calls local authorities in England to account

The NLA calls local authorities in England to account

Back in November the NLA launched a campaign to uncover the excessive fees that local councils are charging landlords for licensed Houses of Multiple Occupation (HMOs) and Selective and Additional Licensed properties.

The first stage of the campaign was to write to all councils in England outlining recent court cases which judged that license charges can only be levied in relation to the processing and administration of licenses (Hemming V Westminster Council judgement), that councils may not charge for variations to licenses (Crompton V Oxford City Council) and that two storey properties with stairways down to the ground floor entrances cannot be classified as licensable HMOs (Bristol City Council v Digs Bristol).

We have asked each council to respond to our letter, stating the charges levied for HMO and discretionary licenses, whether it will be necessary for them to adjust their fees in line with the Hemming V Westminster Council judgement and what mechanism they have in place for reimbursement to landlords of costs already incurred.

Following the Crompton v Oxford City Council case, the NLA has asked councils to explain how they intend to process refunds in respect of any landlords who have been charged for a variation in their HMO license. Several councils have indicated that they will be contacting landlords and refunding money, these include Ipswich Council, Stockton-on-Teas and Dover District Council and several more are reviewing there charging.

Unfortunately, there are a number of councils which have failed to acknowledge the outcome of the court cases. These are somewhat worrying and we will be following up with the council offices in question.

As a result of the Bristol City Council v Digs case, the NLA has asked for information on the number of HMOs that have been licensed unnecessarily and how these charges might be reimbursed. We await this information and will be following up in the coming months with guidance on how councils can best structure their licensing charges.

Smoking tenants? Deposit deductions need not be a drag

I do my best to ensure my properties are of a high standard; well kitted out, a fresh lick of paint between tenancies…you know the drill.

I do my best to ensure my properties are of a high standard; well kitted out, a fresh lick of paint between tenancies…you know the drill.

Sarah Male from Urban Sales and Lettings Online Estate Agents talks about the damage caused by cigarette smoke and how this can effect the return of the deposit.

My first cigarette was a pretty standard affair; shamefully stolen from my mum’s handbag and admired throughout the school day by my mates. Finally at the end of the day round the back of the library we lit it. We each took a drag, proceeded to cough our lungs out and, for me, that was it, never again! Now I’m not 13 anymore I know a bit more about the health hazards, but it’s not just that; it’s the stinky part that really gets my goat as a landlord.

I do my best to ensure my properties are of a high standard; well kitted out, a fresh lick of paint between tenancies…you know the drill. After taking all this care I want to let to good tenants who will take care of my investment and at the end of the tenancy I don’t want to be left with the smell of smoke or cigarette burns in the carpet to deal with. Most smokers seem immune to the smell and don’t seem to realise how it clings to almost everything and for hours after the cigarette was stubbed out. As a non smoker living in a non smoking household I can sniff out a cigarette a mile away which has made for a few interesting encounters with my tenants.

If you’re worried about damage caused by smoking and you don’t want your tenants to smoke in your property you can always make sure:

  • Within your marketing it clearly states “non smoking tenants only”
  • When conducting your own viewings you use your sense of smell to sniff out tenants with a habit and make it clear the property is available only to non smoking tenants
  • The smoking question is included within your referencing process
  • It is clearly stated within your tenancy agreement that tenants are not to smoke inside the property

However, even with the above precautions it’s very difficult to stop your tenants smoking in your property if they want to. Should you find your tenants smoking on a maintenance visit or spy an overflowing ash tray the best thing to do is politely remind them that they are not to smoke in the property.

But if your tenant continues to smoke you can use your inventory as evidence to detail why you might need to make a deduction to the deposit at the end of the tenancy. For example to professionally clean the property or claim for part of the cost to replace badly burned carpets.

Condition issues like cigarette burns in carpets and soft furnishings should be clearly noted alongside those tell-tale signs like discoloured walls in the inventory and should be backed up by photographic evidence that show any discolorations etc. Using a third-party such as an inventory company or even odour specialists to assess the extent of damage from smoke will provide valuable evidence that you can submit to support your deposit deduction claims.

However, without a good, well detailed inventory of a professional standard, claiming for costs to alleviate damage that smoking causes to the property will prove very difficult. If you end up with a case of your word against the tenant’s word, then you won’t fair well if it goes to a dispute, so make sure you’re prepared from the start.

How do you deal with smoking tenants? Have you had a bad experience? Let us know in your comments below and at @Urbansandl and @nationalandlord

Time to stand up and be counted

Time to stand up and be counted

Time to stand up and be counted

Richard Lambert, NLA Chief Executive Officer, offers his thoughts on this year’s National Conference in Swansea…

There’s always a sense of relief when you leave the annual conference feeling that it was a success.  We always work hard to plan a mixture of thought-provoking ideas and commentary from an interesting range of speakers, and hope that a clear idea emerges from the debate of what the next steps should be.  But I’ve done this often enough to know that you only really find out on the day if your plan works.

For me, three main things stood out from this year’s conference.

The first was a brief, and from the audience reaction not entirely convincing, appearance from Wales’ Housing Minister, Carl Sargent. While we were of course grateful to Mr Sargent for attending this year’s conference, I’m not sure many landlords in the room were comforted by his comments that the Welsh Government wants to make it “worthwhile” to work with private residential landlords in Wales.  He said: “Our role as the Welsh Government is to work with you to provide sustainable homes.”

The reason landlords won’t be taking too much solace in his comments is because it is difficult to gain any sense from the new Welsh Housing Bill, published the day before, that the Welsh Government really grasps the landlord perspective.  For example, as it stands, the proposals on the face of the Bill appear to mean that landlords will need to obtain multiple licenses from the multiple local authorities in which they let property.  And local authorities will be able to set their own standards and training requirements to qualify.  An administrative nightmare beckons …

Which takes me nicely on to the second thing that struck me:

The NLA argued against mandatory licensing and accreditation, but the Welsh Government has confirmed that is its policy.  Without doubt the clear message from this Conference was that if that is so, then we need one accreditation scheme for Wales, as we understood was the policy, not a multiplicity of local variations.  As such, the NLA has moved quickly to call for greater clarity over the proposals.

Possibly the most telling comment of the day came during the afternoon debate on ‘self-regulation or mandatory regulation?’, which took an in-depth look at the current balance and pros and cons of both.  A local authority delegate raised their concern with the Bill as drafted, considering “… the work local authorities in Wales had contributed to the proposals” (sic).

For me, this comment acknowledged that Welsh local authorities were as thrown by the published proposals as we were.  It also highlighted the need for guidance on how the registration, licensing and accreditation schemes should be administered locally so as to avoid unnecessary duplication.  We will all benefit from clarity and simplicity.

The third thing that struck me was that, whatever the views on mandatory accreditation, on a show of hands, half the landlords in the room were already accredited.  There’s a benefit to landlords to having a public demonstration of their knowledge and competence.  One thing is certain, if Government is backing accreditation, there is a greater chance than ever before that tenants will start asking for, and eventually choosing, accredited landlords and agents, creating the market push that will really make it worthwhile.

But let’s not forget that it’s not just landlords who benefit from accreditation.  If the good, responsible landlords identify themselves, they can be filtered out of the enforcement process, leaving the local authority an easier task in enforcing against the bad.

Too often landlords are misjudged by the minority who are criminals rather than landlords and who don’t represent the wider landlord demographic.  As the NLA’s Chairman, Carolyn Uphill commented during the discussions, “…accreditation is undoubtedly a value to the PRS as it demonstrates our ability to stand up and be counted”.  What are we waiting for?

MPs attack proposals to make landlords check immigration

Illegal immigration is one of the hot political topics at the moment

Illegal immigration is one of the hot political topics at the moment

Illegal immigration is one of the hot political topics at the moment. To solve the UK’s illegal immigration issues the Government is trying a range of tactics, including deploying controversial anti-illegal immigrant advertising vans and asking private-landlords to carry out immigration checks.

As you can imagine, the Government’s expectation that landlords could become immigration officers caused quite a storm among the landlord community. However, when you take a step back and look at the detail of the proposals, landlords checking potential tenants’ immigration status could involve little more than the current tenant checks carried out by professional landlords.

Keen to ensure the legislation could work in practise, the NLA responded to the Government’s consultation by welcoming the plans for private landlords to play an integral role in developing and maintaining sustainable communities but also raising a number of concerns, which must be addressed before the policy could become a practical reality. The Association highlighted three specific areas, representing a ‘line in the sand’ for private landlords:

  • Firstly the expectation that landlords should carry out periodic checks throughout the term of a tenancy is unrealistic. On-going checking should remain the responsibility of the appropriate authorities and the duty to report overstaying households could present a distinct danger to landlords in a small but significant number of instances.
  • The system must be made clear, accessible and easy to comply with. Doubt about requirements or uncertainty about how to comply may result in landlords favouring applications for accommodation from households which are easier to verify. This would be unhealthy for the diversity of communities, the private-rented sector and the perception of private landlords and could lead to further shortages of available housing.
  • Private landlords tend to interview prospective tenants in the properties they wish to let. They may therefore have reduced access to office equipment such as photocopiers and fax machines. These limitations must be taken into account when devising guidance and support materials

After responding to the consultation, the NLA was invited to give evidence to the House of Commons Committee considering the Immigration Bill. NLA Chairman, Carolyn Uphill highlighted major worries over the practical difficulties and the potential danger to landlords’ safety, as well as issuing a stark warning that the Bill could only serve to nurture a rogue undercurrent of damaging and criminal letting practices.

Carolyn highlighted that landlords may inadvertently discriminate against anyone they believe to be an immigrant, simply in an attempt to avoid the risk of falling foul of regulations they may not fully understand. She said, “in a situation where there is high demand for rented property with potentially several applicants, landlords will be tempted to take the easiest route and those with British passports will get priority.”

The NLA’s concerns were echoed by MPs in the Commons Home Affairs Committee following the evidence sessions. The Committee said that landlords “will discriminate against all immigrants, regardless of their status, rather than take the risk of housing a person without right to remain”. MPs pointed out that there are more than 400 “legitimate European identity documents alone on which landlords will have to base their decision”.

Concerns over the plans have already led to a commitment that the scheme implementation will be phased, beginning in one specific part of England. It will be interesting to see how the initial phase of the scheme goes and what problems are encountered when it begins.