So a man is on his hands and knees under a street light looking carefully at the ground.

A copper comes along and asks him what he is doing. “Looking for my car keys” he replies. “Oh I’ll give you a hand, where did you drop them?” and the man points 100 yards away to where his car is parked. The cop says “If you dropped them over there, why are you looking under this street light?” and the man replies “Because the light is better here”.

Life’s a joke …

I met a real life version of that yesterday. A man came into our reception and told me that he had paid £2,500 to a letting agent to move into a property but when he turned up it was already occupied. When he went to the agent they wouldn’t give him his money back.

I said I didn’t recognise the street name and asked him where it was, “Barnet” he replied cheerily, which is about 25 miles north of Catford. I asked him why he had come to South London for help with a problem on the edge of North London and he replied “Well, I was in the area, so I thought…….”.

How dodgy agents do it

I mention this because we have agents in our area who do the same thing as his letting agent. How? You may well ask, when they have a walk-in shop front?

Well they employ 2 way mirrors and CCTV to spot disgruntled customers coming through the door and nip out the back when they come in.

They stay in business for a few weeks, dodging irate tenants whilst raking in huge amounts of cash and then disappear before the council can get their arse in gear.

Looking into subletting

Which is why I was surprised to read in the Telegraph this week  of a massive and proactive project looking into just how many homes may be being sub-let. I stopped being surprised when I read the project was in fact run by a private company, HJK Investigations not a council. That explains it.

For once even I was shocked. I wrote last week somewhere that I thought the government’s estimate of 160,000 unlawful sub-lets was probably on the conservative side but this report suggests the problem could be even bigger than I thought.

HJK ran the details of a mere 27,000 London social tenants in 2 out of the 33 boroughs and 4 housing associations and compared them against things like mortgage accounts, utility bills and active credit accounts and found in 5,300 cases they didn’t match up. What HJK call “Fraud indicators”

Are one fifth of social tenants fraudsters then??

That’s a fifth of the group surveyed, and there are 8 million social tenancies in the UK. Quite sobering huh? [Course it depends on which 27K they checked - was it random? Ed]

One of the useful things of being a front line housing worker, especially when like me you also write about housing, is you become a very effective thermometer of subtle changes in housing world and pick up trends long before many others do.

Writing this column I regularly read shock-horror news stories about something that we have been seeing for the past year. Letting agents and landlords will be able to see the same things, most journalists are latecomers in many respects.

High rents = high risk of default

I have been writing for a long time now about the effects of high rents on tenants and the way that this is setting up problems for landlords in future.

I have been rubbished, ridiculed and attacked on many occasions for either being a party pooper, ignorant of landlord’s true costs or a good old fashioned tenant whinger [we don't do that here though Ben - Ed].  But I interview people everyday, tenants mainly, and I get to examine their finances closely.

Last week I mentioned the Shelter report that showed a third of tenants are cutting back on food and fuel to pay rent and this week I noticed a marked increase in concerns being expressed about rent levels from the landlord press.

Landlord support service website Property 118, who Tessa and I also write for, ran a story “Landlords ready for massive rise in rent arrears”  The article took on board Shelter’s figures as a warning to landlords. I predicted before Xmas that many tenants, sick of living so austerely for so long may well splash out and not worry about the rent. The article says:-

“Landlords are bracing for a flood of rent arrears cases as renters struggle with their bills over the festive period”.

Landlords, not being every tenant’s favourite people, come low down on the list of priority debts for many at Xmas time. The Property 118 article reported figures from Britain’s largest landlord LSL Property Services that rent arrears jumped by 10% from November to December and shows rent arrears are at highest level since 2009.

Landlords mortgage default

This report on “Letting a Property” website quotes Paul Jardine of LPA Receivers Templeman, who would normally take back properties from buy to let landlords, talking about problems with rent arrears and their knock on effect to the mortgage market. Mr Jardine said:-

“The growing level of severe tenant arrears has yet to filter through into mortgage payment problems for landlords. Mortgage rates have kept monthly payments low, but there has also been a change in landlords’ behaviour.

With capital gains falling by the wayside in the past six months, rental income has become the most important component in an investor’s annual return – but it also pays a landlord’s mortgage cheque”.

Tenants have been complaining of being crippled by high rents, particularly in London for some time now but as I have also been urging, there will come a time when tenants inability to keep up with these rents will have a knock on effect to a landlord’s ability to pay the mortgage.

I find it interesting that these concerns are now starting to be raised from the landlord’s side.

And finally a tale to warm the hearts of many a PRS landlord.

Government announced this week they will be piloting the rent bit of universal credit where benefit rents will no longer be going direct to the council or housing association.

They will be running 5 pilot schemes with social landlords for a few months from June this year to see if they go out of business through non payment of rent. Something PRS landlords have been enduring for some time now.

Of course, regardless of the true findings of the pilot scheme, payments will be going straight to the tenants anyway. The government are as pig-headed and blinkered as any government and intent on having their way regardless of any inconvenient negatives that the pilot scheme may throw up.

The big difference however is that social landlords don’t have the option of moving away from benefit tenants, in the way that PRS landlords did to protect their investment, so it has the potential to be even more disastrous.

With just about everything I see our government doing with housing I get a strong image in my head of someone studiously sawing through the branch of a tree whilst sitting on the wrong side of it.

IDS, Gobbels and Stalin

Oh and another finally, and on the same subject of Universal Credit, I listened to Ian Duncan-Smith on Radio 4 the other morning fending off concerns by Evan Davis, who was in effect pointing at the branch and waving, only to be shooed away by IDS and noticed he repeatedly referred to people on benefits “Doing the right thing”. A curiously vague phrase in itself but the fact that he must have used it 10 times tells you someone has told him to.

I am now officially on an IDS “Do the right thing” count in his interviews
If you want to know why he uses vagueness to communicate, read ‘Propaganda’ by Edward Bernays (Sigmund not Lord) Freud’s nephew, written in 1928 on how to hoodwink a nation.

The book was a favourite of Dr. Goebbels and Uncle Joe Stalin and you could always count on them to do the right thing.

Ben Reeve Lewis

Ben’s runs  Home Saving Expert, where he shares his secrets on defending people’s homes from mortgage repossession Visit his blog and get some help and advice on mortgage difficulties,  catch up with him on Twitter and check out his free report “An Encouraging note on Dealing with your Mortgage Lender” and have it sent right to your inbox.

CCTV pic by lydiashiningbrightly, house of cards pic by King of the Ants

I have moved into a student rented property.I paid the rent for the first installment. I did not sign any contracts and I did not pay a deposit. I stayed for the time that I had paid for.

Can I leave the property whenever I want? I have left before the other payment was due. Do I still have to pay the landlord anything because of the ‘verbal contract’?

It is not necessary to have a written agreement to create a proper tenancy.  If you just go in and start paying rent of, say, £400 per month, then you will have a ‘periodic’ monthly tenancy at a rent of £400 per month.

In order to end the tenancy you need to give notice, and you need to give notice of either 28 days (for a weekly tenancy) or one month (for a monthly tenancy) AND that notice period must be for a complete month ending at the end of the ‘period’.

So, if you moved in on 4 Jan then the monthly period will go from the 4th day in the month to the 3rd.  So the 3rd day in the month is the last day of the period.  So your notice end date  (in this case) will be the next 3rd day in the month after one month.

So if you give notice on 2 March your notice must end on 3 April.  If you give notice on 5th March, your notice period should end on 3 May.

If you just move out, then you will owe the landlord rent ‘in lieu of notice’ up to the next day when your notice should have ended had you served one.  So in the cases above, if you move out on 2 March you will owe rent to 3 April, if you move out on 5 March you will owe rent to 3 May.

That is if you tell the landlord you are going.  If you say nothing and he does not know that you have gone, then you could end up owing him rent for a much longer period.  Because so far as he was aware you were still living there.

My tenant normally pays his rent on the 2nd day of every month; this was when he signed the AST agreement. He has been paying later and later every month. I have written to him and he now wants to pay on the 10th day of each month.

I am willing to change the payment to the 10th day; he is presently in a periodic tenancy. I have not charge the tenant for the late payment, but if I change his payment day to the 10th there will be 8 days owed.

What is the best way to deal with this?

There are two ways you can deal with it.

1. GIve a new tenancy agreement starting on the 10th of the month rather than the 2nd of the month, and ask him for the extra payment to make up the days.  I suspect however that your tenant will not be able to afford this

2. Continue with the tenancy running from the 2nd day in the month but agree that the rent can be paid on the 10th rather than on the 2nd.  There is no law which says that rent has GOT to be paid a month in advance, in fact on the contrary the default position is that rent is due in arrears.  It is only the fact that there is a  tenancy agreement term saying this which makes it payable a month advance.  So if you agree to it being paid a bit later, it will still be payable in advance but just not the whole month in advance.

With option 2 you can do this either by agreement or (if you prefer) in a new form of tenancy agreement.

Hello! I’m glad I found this website because I have some difficulties to understand the word “rent in advance” in UK (I’m from France). My contract goes from 22th of October 2011 to 21th of April 2012. The part of the contract regarding this is the following:

” The tenant agrees to pay the Rent in advanced by 4 weeks in the following instalments namely a first payment of £1800 on the signature of this Agreement and thereafter the sum of £450 per calendar week commencing on the Friday of each week to 21th of April 2012.”

What I understand is: I have to pay £1800 at the signature and I don’t have to pay anything until the 5th week because I paid that money in advance… But my landlord expects me to pay these 4 first weeks and explain me that “advance” means that he always have 4 weeks front, so I have to pay each week until the end and then I won’t have to pay the last 4 weeks. Nice… But the contract don’t mention this at all so I’m a bit lost. Is that way to pay so standard that it doesn’t have to be mention on the contract or am I right if I refuse to pay the 4 first weeks, considering that I already paid for it?

Under the general law, ie if your landlord did not provide a tenancy agreement, rent is payable in arrears.  However if they use a tenancy agreement, landlords can require tenants to pay rent in advance.  So this means that, if rent is paid monthly and is payable on the first day of the month (for example), the tenant pays rent rent for, say June, on the 1st June rather than on 1 July.

What your landlord is doing is asking for two months rent in advance.  However, you are quite right, the tenancy agreement does not actually say that, other than for the initial payment.  So I don’t see why you should not refuse to pay the second months rent, on the basis that you have already paid it.

What does anyone else think?

Well last week I reported that housing stories were a bit thin on the ground, not because nothing was happening but most of the journos were still on Xmas leave and not a lot was being written.

Its all changed now and its business as usual in a week of foot in mouth gaffes, daft government pronouncements, floors made out of leather belts and haunted lighthouses.

Jellied eels

My own week began on Saturday when Frazzy and I attended an 85th birthday party in an east end social club populated with proper old cockneys done up in their finest and joy of joys, a washing up bowl full of jellied eels as part of the buffet.

Fantastic, the kind of do you wont see much more of in future as a generation dies out, my particular generation of Londoners being more used to Samosas and Brie de Meaux than Tubby Issacs finest. Happy birthday Matt.

To Business;

Well its been hanging about in the wings for sometime now but plans have moved forward to criminalise sub-letting of social housing stock. As reported in Inside Housing  the government believes that 160,000 properties could be sub-let, costing the social housing world £5 billion. With what I see in my job I would guess that the 160,000 could be a conservative estimate to be honest.

Ben agrees but …

What’s remarkable about this story is that for once I actually agree with Grant Shapps, when he says

“Tenancy cheats are taking advantage of a vital support system for some of the most vulnerable people in our society and getting away with a slap on the wrist while our waiting lists continue to grow”.

Up until now, when a council or housing association finds out that a property has been sub let they take back the property but under the new proposals a fine of £50,000 or 2 years in jail will be the penalty.

Five stars for enthusiasm but only 2 for practicality. How are you going to get 50 grand out of anyone but a banker? And are we really going to clog up the prison system with ex council tenants?

Also, in my experience many offenders are very good at staying off of anyone’s radar. I know, I have to try and take legal action against them when they start harassing their sub tenant out of the property for bringing the council down on their necks.

Shocking news on crisis loans

Prize for the most shocking news of the week, again reported in Inside Housing  is government plans to pass the administration of Crisis Loans over to a councils instead of being run by the Department for Work and Pensions.

In short, Crisis Loans do what they say on the tin. It is a statutorily run fund available to people on benefits that they can get when experiencing a crisis. The rules for qualifying are quite tight and it is the most vulnerable and destitute of people who need them.

Twenty organisations have joined forces to write a complaint to the government over this latest rash attempt to cut budgets. At the moment the money for these loans comes out of the social fund but if it falls to councils to decide at a local level it will inevitably be subject to the council’s own budgetary constraints and political leanings.

Yet another austerity measure that hits the poorest in society. To my mind this story hasn’t received the profile it should, probably because for most people those in need of Crisis Loans aren’t part of their daily life so they aren’t aware of how devastating this could be.

Accidental landlords – again

ARLA ran an interesting story on their website this week.  Apparently figures are showing that because so many people can’t sell their homes they are instead turning to letting. Creating a new swathe of reluctant landlords, the figure rising in the last year from 40% to 47%.

As usual with their articles ARLA’s approach is one of self promotion but the idea is interesting. As a serving Tenancy Relations Officer I see many cases of harassment and illegal eviction carried out by these reluctant or as they are sometimes also called ‘Accidental’ landlords by mistake.

Because being accidental they often haven’t the slightest clue of the laws and obligations surrounding a letting.  They then get into hot water with me for breaching laws and with their mortgage company when not knowing how to deal with rent arrears causes a shortfall on their mortgage. Panic sets in and rash behaviour shows up.

I suppose there is a good side. We need more rental properties and the more there are on the market the supply will push rents down, hopefully.

Rents, rents, where are they going?

And on the subject of rents……you didn’t expect me to let a week go by without complaining about poverty inducing rents did you? Upad cites the Belvoir Rental Index (whatever the hell that is) which predicts that rents will stabilise in 2012 and not continue to rise faster than a hot air balloon with Kylie Minogue as it’s sole passenger.

The index suggests that rents will simply rise in line with inflation rather than the scandalous rates we have seen over the past two years. The article also cites the growth in accidental landlords unable to sell that were picked up by ARLA.

Loosing it …

What does annoy me is the most common double speak used in so many articles written on property, this particular example being;-

“join the growing number of people across the UK choosing to rent rather than buy a property”.

AAAAARRRRGGGGHHH!!!!!!!!! When will these people get it???? Nobody CHOOSES to rent rather than buy. Nobody in their right mind would want to live in permanently insecure and crippling expensive rented property. Most people cant afford to buy, it isn’t their CHOICE!

Its alright….I’ve taken some pills and calmed down now.

[Er, Ben, some people DO choose to rent.  In fact this bloke here chooses to live just in hotel rooms ... Ed]

Two  strange stories

Finally two strange stories of the week. The ever reliable and quirky Rat and Mouse ran a story about flooring made from leather belts.  Have a look at the picture, it actually looks quite good, like a Jacobean parquet floor.

The 24 Dash told us all about a haunted lighthouse off of the welsh coast that the owner is looking for planning permission on to turn into living accommodation.  It says that visitors to the area regularly see a ghostly old lighthouse keeper on the balcony. Or maybe its just someone sub-letting and keeping quiet about it.

You can imagine Shapps has got a clipping in his wallet about this that he gets out in the back of his limo between meetings and has instructed his assistant to find out how many abandoned haunted lighthouses there are around our costs that could be turned into living accommodation for the homeless.

As we all know benefit claimants are already being economically cleansed from inner London and now the rents in suburbs are rising to meet the influx, forcing benefit tenants further out into the countryside. If this plan comes off they can even be pushed beyond the coast and into the sea.

Imagine that? A whole nation of the dispossessed living in lighthouses around our coast, luring ships onto the rocks so they can raid the wrecks and pilfer stuff to sell on eBay and supplement their meagre universal credit payments.

Sorry………..I think I had too many of those calming pills as a read my morning Daily Mail.

I’ll be better next week.

Ben Reeve Lewis

Ben has started Home Saving Expert, to share his secrets to defending people’s homes from mortgage repossession Visit his blog and get some help and advice on mortgage difficulties and catch up with him on Twitter and check out his free report “An Encouraging note on Dealing with your Mortgage Lender” and have it sent right to your inbox.

Jellied eel picture by Malias, Minogue in a balloon pic by Dave Parker (adapted by me)