It’s a good thing we have now dropped the ‘Friday’ from the Newsround title because today is Thursday!
Newsround is a day early this week because we are closing down the blog for Easter with no posts after today until Tuesday.
So what news items have we had in the past week?
Renters Lose £80m per year to Deposit System
Mind you that’s not just one renter, it’s a culminative figure and is based on a report from Generation Rent criticising the current tenancy deposit scheme system.
They are basically proposing three changes:
- That as only a proportion of deposit funds need to be available to refund at any one time – the rest of the money should be put to good use, such as financing house building
- That the costs of running the three schemes are high and prevent tenants getting a decent return on their money and
- That it should be possible to transfer deposit money between tenancies
Dan Wilson Craw, Director of Generation Rent, said:
“Deposit funds are inherently stable so could be put to work properly, not just for the tenants but wider society as well. By adopting our proposals, the government could unlock these funds for investment in new homes and help to bring down rents.”
Sounds good but is it possible? Read the article here and see what you think. I think they make some good points. As the article says
Of the £4 billion protected by the current government-accredited schemes, only £57 million is required in cash at any one times. This leaves £3.96 million to be invested. If this was used to finance new homes, 35,000 could be built in 5 years. By way of comparison, in October 2017, the prime minister announced new funding for 25,000 affordable homes.
Drone on
It’s not really about landlord and tenant, but I found this post about drones fascinating. Apparently, they are potentially going to be used for
- Deliveries
- An in the air taxi service
Which will probably result in changes to houses to allow drone delivery points and maybe also gridlock in the skies as well as on the roads (remember the Dr Who program Gridlock from 2007? It may not be as far off as you think…)
Government Inspector slams right to rent scheme
This item is based on a press release I got from the RLA.
The press release is about a new report from David Bolt, Independent Chief Inspector of Borders and Immigration, who has concluded the policy has “yet to demonstrate its worth as a tool to encourage immigration compliance” and that the Home Office is “failing to coordinate, maximise or even measure effectively its use, while at the same time doing little to address the concerns of stakeholders.”
The RLA is now calling for the Right to Rent rules to be suspended pending a full evaluation of its impact, in particular, how the policy impacts on people who cannot easily prove their identity.
As landlords are threatened by criminal prosecution if they make a mistake, it’s hardly surprising that 48% of landlords are unwilling to rent to someone without a British passport. Which is bad news for the 17 percent of UK residents who don’t have one.
The Joint Council for the Welfare of Immigrants is seeking a judicial review of Right to Rent (which is supported by the RLA), with legal director Chai Patel saying:
“It’s disgraceful that the Home Office has refused to properly evaluate whether or not the right to rent scheme is actually working to reduce irregular migration. They have no idea
Apparently, the Home Office has also refused to allow groups representing the migrants and ethnic minorities affected by the scheme to sit on its consultative panel.
Commenting, David Smith, Director of Policy for the RLA said:
“Today’s report is a damning critique of a failing policy. The Inspector is clear that it has yet to demonstrate its worth and the Government has failed to take on board the concerns of key stakeholders in the sector.
“Landlords should not be used as scapegoats for the failures of the border agencies. It is time to suspend this controversial and unwelcome policy.”
Amendment Proposals to the Draft Tenant Fees Bill
A report on Property Industry Eye lists a number of proposed amendments to the bill, after MPs meetings with several tenants, landlord and letting agent groups as well as local councils, as follows:
- Reducing the cap on deposits to 5 weeks rent
- Only allowing landlords to retain the full holding deposit if the tenant knowingly provides false or misleading information
- Where the tenant provides information in good faith and subsequently fails a reference check, the landlord should only be permitted to retain the cost of a reference check, limited to an amount set by the Secretary of State
- Making it clear in the bill that landlords can’t charge a higher rent in the first month and then reduce it for the rest of the tenancy to cover the fee
- More clarity on permitted and prohibited fees, and more guidance on the type and level of default fees where a tenancy agreement is breached
- More guidance on the type and level of default fees where a tenancy agreement is breached
- Providing for tenants to use the First Tier Tribunal to recover o/s fees rather than the County Court
- Landlords to be unable to obtain possession until these have been repaid
- The First Tier Tribunal to be given enforcement powers
- Additional funding for local authorities to enforce the legislation
To see the various quotes of comments on these proposals, see the Eye report.
Minimum EPC deadline
Remember that if your property has an EPC rating below E, you cannot rent it out after 1 April and you will risk a fine of £4,000 if you do so.
According to ARLA, thousands of properties are coming off the market while landlords try to sort this, although I suspect many landlords will still be unaware of the new rules and will re-let, risking the fine.
The new rules will apply to all properties, not just new lets, after 2020.
NB I did a post about the new rules here.
DPS Leaflet problem
It looks as if the link to the DPS leaflet used for service as part of the Prescribed Information is no longer working.
Which could cause problems for landlords as failure to serve the information contained in the leaflet will put them in breach of the deposit regulations (and mean they are unable to evict under s21).
If anyone has the new link to the leaflet let me know via the comments below and I will put it online here.
In the meantime, you can comply with the prescribed information rules by serving the DPS terms and conditions document for the scheme you are using.
Note: DPS have now directed me to this page which has guidance to help.
Snippets
- The Guardian has an interesting report of a new ‘rebel bank’ in Walthamstow, printing bank notes and buying up people’s debts.
- A buy-to-let landlord who rented out a converted British Telecom station in Osterley without proper planning consent has been ordered to pay over £20,000
- Grenfell – 100 households are still in temporary accommodation and only 7 out of 160 social housing blocks have been made safe since the fire
Newsround will be back next week. Have a good Easter!
Drones do have a housing application. Several council and housing associations now use them to survey the conditions of a roof as opposed to sticking up scaffolding and some councils use them to detect beds in sheds.
I was talking with a council bod the other day who has been around as long as me and we were reminiscing about the days when we had typing pools before going over to green screen word processors and then having to develop computer and admin skills which we hadnt had to before. I can envisage in a couple of years, for many jobs drone flying skills being a standard requirement.
If a Tennant knowingly provides false information isn’t that fraud? Should holding on to the fee be the least of their worries
“Renters Lose £80m per year to Deposit System”
Having read the report in full, it appears that Generation Rent recon that the deposits should be earning interest at 2.5%
They also have not addressed the issue of determining when deductions are likely to be needed from the deposit, other than saying “if the last month’s rent has been paid, then that much should be released as deposit for the next property”.
An interesting proposal, but more critical assessment is needed to prevent poorly-behaved tenants from deliberately or unintentionally shafting landlords.
Regarding the DPS tenant information booklet…That no longer exists. I phoned the DPS when I realised the link was broken. They’ve changed their website and their systems, but as is typical for the DPS literally NO information as to what the changes are has been given to their registered landlords. In the past they used a Repayment ID system, they included the landlords Repayment ID on the Deposit Certificate so it was impossible for landlords to provide this to tenants, so presumably they provided the tenant with the Certificate themselves. They’ve apparently dropped the Repayment ID system (without telling anyone) and the Certificate is now suitable to provide to the tenant. Are we now responsible for giving it to the tenant, or will they do it? No idea…
I don’t know if the phrase charter for rent cheats” is the RLA’s or yours, Neil, but it’s excellent. It gives us an alternative to rogue tenants”. We should start using the expression rent cheats” from now on (just like benefit cheats” caught on).
I also agree with the point in the previous comments regarding how the deposits could be transferred over the time scales are wrong. Eg. tenancy start date for our new tenant is 1st of July and we take a deposit even, say, 1st of February if it’s for students, or eg. 15th of June if not. How could we get the tenant’s deposit on their current home transferred over weeks before the start of the tenancy? We are not going to wait until the 1st of July as the tenant might then just not turn up, having lined up several possibilities.
I wonder if you saw Lionel Shriver’s piece in The Spectator, I read a summary of it in The Week, tittled The Building Blocks of Mass Immigration, she poses that the magority of new building would house immigrants, not surprising as our indigenous population is falling.