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The EMPO Messenger (March 2016)

Article by Giles Inman on Mar 29, 2016 View in browser

The EMPO Messenger (March 2016)

Private rents on the rise across Britain  

Private rental prices paid by tenants in Great Britain rose by 2.6% in the 12 months to January 2016, up from 2.5% in the year to December 2015.

Private rental prices grew by 2.7% in England, 0.3% in Wales and 0.8% in Scotland in the 12 months to January 2016.

Rental prices increased in all the English regions over the year to January 2016, increasing the most in London (3.9%).

The ONS survey gives no actual rent figures.

One in six tenants has sub-let with more likely to do so

Recent research Direct Line reveals that one in six tenants in the UK admits to having rented out part or all of their property to someone not on the lease agreement.

A quarter of tenants who sub-let their property did not check the terms of their agreement to see if it was permitted, while over a third had not informed their landlord of the decision.

Of those who did not inform their landlord, a fifth got found out anyway.

In 11% of cases the tenants named on the lease were evicted with 6% losing their deposit in the process. Other repercussions include increased rent.

Over the last two years, Landlord Action have seen an 18% increase in the number of instructions from from landlords with sub-letting cases.

Paul Shamplina, founder of Landlord Action, said: “Sub-letting is fast becoming one of the leading grounds for eviction.”

“This has been fuelled by sky-high rents preventing some tenants from being able to afford even single-unit accommodation, forcing many to resort to bedsits or shared accommodation.”

“Organised sub-letting scams are also becoming more prevalent, where tenants, or sometimes even fake tenants, advertise properties and rooms on holiday/accommodation websites in order to cream a profit without the landlord’s consent.”

Landlords who turn down tenants on benefits ‘are not breaking law

It is not unlawful discrimination for a landlord to refuse to let to a prospective tenant who is on benefit.

Receipt of benefits is not one of the protected characteristics as set out in the Equality Act 2010.

A new paper, placed in the House of Commons library this month, specifically addresses the issue of letting to benefit claimants.

It says there are a number of reasons why landlords do not let to claimants: they associate them with rent arrears, anti-social behaviour and damage to property.

A key concern is that Local Housing Allowance is paid to claimants, not landlords. The claimants are trusted to pass the money to their landlords, rather than spend it on other things.

Another issue for landlords is that market rents in their areas may be far higher than LHA.

A newer issue is the roll-out of Universal Credit, where all benefits are paid as one.

Lenders and insurers can also be problematic when a landlord is letting to claimants.

The new paper gives no definitive information on the extent to which claimants are turned away as private tenants, but quotes evidence, including a 2016 survey for Crisis.

This found that 55% of landlords are unwilling to let to tenants on benefits.

Click HERE to read the Paper

Councils told to stop telling tenants in process of eviction to stay put

Local authorities must stop routinely advising tenants to stay put until the bailiff arrives before they can be accepted as homeless.

Housing minister Brandon Lewis has written to all chief executives of local councils saying that households should not be put in this position, and clarifying the guidance about homelessness.

In his letter he says: “Authorities should not routinely be advising tenants to stay until the bailiffs arrive; there is no barrier to them assisting the tenant before this. By doing this, local authorities miss a valuable opportunity to prevent homelessness.”

The letter follows pressure from ARLA, whose managing director David Cox has repeatedly raised the issue of local authorities advising tenants to stay in their property beyond the notice period, compelling the landlord to go to court to gain possession, running up considerable costs.

In his letter, Lewis says: “Landlords and tenants continue to raise concerns about local authorities advising tenants to stay when issued with a Notice seeking possession of a property let on an Assured Shorthold Tenancy under Section 21 (1) or (4) of the Housing Act 1988.  

“I receive a large amount of correspondence on this.”

He continues: “The statutory Homelessness Code of Guidance, which local authorities are required by law to have regard to, is clear on this matter.

“It contains guidance on how authorities should treat homelessness applications in circumstances where a tenant has received a valid S21 notice.

“It says that housing authorities should not, in every case, insist upon a court order for possession and that no local authority should adopt a blanket policy in this respect.

“The Guidance states that if the landlord intends to seek possession and there would be no defence to an application for a possession order, then it is unlikely that it would be reasonable for the applicant to continue to occupy the accommodation.

“Unless a local authority has very good reason to depart from the statutory guidance, then they should not be placing households in this position.”

Lewis says that he will specifically be looking at the way local authorities deal with S21 notices.

Landlords' Responsibilities for Injuries in their Buildings

A recent case has clarified landlords’ responsibilities for injuries in their buildings, after a man died after falling down a staircase in a residential block of flats.

In Megan Dodd (Widow and Executrix of the Estate of Paul Dodd, Deceased) v Raebarn Estates Ltd & 5 Ors [2016] the man, who was visiting a flat on the first floor, suffered brain damage and subsequently died after falling down the stairs. The staircase was steep and had no handrail.

The freeholder of the three storey building used the ground floor for retail premises and leased the other floors to a developer as residential flats.

The man’s widow brought a claim against the freeholder, arguing it had not met its duty of care to her husband as a visitor under the Occupiers’ Liability Act 1957 s.2, and had not kept the staircase reasonably safe under the Defective Premises Act 1972 s.4.

At the High Court hearing, questions arose as to whether the freeholder or the developer was in charge of the staircase, due to contradictory wording in the lease. The judge found that the staircase was under the developer’s control as it was obviously intended as a means of access to the first floor, and the freeholder had no control or duty of care over it.

The widow appealed. On appeal, it was found that the lease’s wording was simply an error and that the obvious intention was for the staircase to be controlled by the developer – it only led to the upper floors and there would have been no point in the freeholder retaining it.

Furthermore, although the stairs were potentially dangerous due to the lack of handrail and steepness, this was not the test for a defect that a landlord had a duty to repair under the Defective Premises Act – an object had to be out of repair for that duty to arise, and the staircase itself was well constructed. If this was the test then it could impose a substantial burden on a landlord to put right matters which are under a tenant’s control.

The appeal was dismissed and the freeholder was not therefore liable for the incident.

This case is a useful clarification of the law surrounding Occupiers’ Liability Act and Defective Premises Act issues for landlords.

Council's private letting agency to cost over £1.3m and has ONE home to let 

The BBC has exposed a London council's new private lettings agency.  The scheduled cost to operate it comes in at well over a million pounds. The business has four staff, five people on its board and only one property to let.

The BBC says that Haringey’s council's agency, called Move51? North, is believed to be the first of its kind to be set up by a local authority. It began trading on October 6 and the BBC's investigation says there has been a meeting to introduce the agency to landlords as well as a post campaign on the London Underground.

"A director, junior consultant and property manager were hired last summer, with the latter job offering a salary of £30,000 plus a guaranteed £5,000 bonus in the first year" says the BBC; the agency's website names four staff members in total, and a board of five people.

However, when checked recently,  the agency had only one property on its books; even that had no photograph, and just scant details of "a spacious three bedroom terraced house comprising; two reception rooms, a large eat-in kitchen with access to a well maintained garden, downstairs shower room and ample storage. Ideally suited to a family or professional sharers, moments from transport links.”

The BBC says the council originally budgeted £200,000 to set up Move51?, according to a council report published in October; however, then it was discovered that an additional £276,000 would be needed by 2018. The BBC investigation into the agency says: "In total, Haringey expects to spend an additional £1.37m on the agency, but expects the agency to make a surplus by 2019 and to cut the amount the council currently pays private landlords to meet its housing obligations.”

Nottingham City Local Plan Pt 2 - Consultation (March 2016)

 East Midlands Property Owners Ltd (EMPO) has submitted their response to the consultation on the draft Pt2 Local Plan. We consider that the policies concerned with Houses in Multiple Occupation (HMOs) and student accommodation affect an essential part of the housing mix across Nottingham, serving broad markets of current undergraduate and postgraduate students, young professionals, single people, and those who have left university but encouragingly have chosen to continue living in Nottingham for employment, further training and development and leisure. To receive a copy of our submission please contact Giles at the office.

 

New EMPO Members-February 2016

Alan Young, Angus Mann, Mr D.Wild, Surelets, Miss A.Ruddock-Brown, Student Cribbs, Mr K. Sherlock, Mrs Robinson