Welcome to our weekly Newsround, a relatively quiet week in the housing news this week so let’s see what the Landlord Law team have found.
Not-for-profit Letting Agents to launch
A great new initiative is being launched that tenants will be pleased about. Lloyds Banking Group is supporting Crisis financially to develop and hopefully launch a not-for-profit lettings agency. It will be the first not-for-profits lettings agency ever to launch.
It will be, we are told, ‘fair for tenants and fair for landlords’. Homeless people will not be asked for rent in advance or be referenced, they will not need to provide a guarantor either. All profits will be reinvested into supporting homeless people to find new housing.
Both Crisis and Lloyds are asking for one million genuinely affordable homes to be built and made available to those in most need. Decent quality homes for those at most risk is seen to be the one way of solving homelessness and these homes are becoming increasingly scarce.
Lloyds bank has, up until now provided almost £15bn in financing to the social housing sector, supporting 200 housing associations across the UK. It will now support Crisis in raising funds to help people experiencing homelessness move into education, employment and even start up small businesses. Further help will be in fundraising, volunteering and sharing skills.
Charlie Nunn, Chief exec at Lloyds Banking Group said
A good home is a fundamental human need, and yet the reality is a chronic lack of affordable housing in the UK. This means there are too many people trapped in a cycle of temporary accommodation, or living in poor, sometimes dangerous conditions. This cannot be right and is why today we are announcing our new partnership with Crisis – calling for one million new social homes to be built by 2033, with the clear focus on helping people who are most at risk of homelessness.
We are committed to working with Crisis, business and community organisations across UK regions and the government, to end homelessness for good.
This is excellent news and we hope to see the success stories in due course.
EPC rules leave landlords in the dark
A Mortgage Advice Bureau claims that landlords are still very much in the dark regarding EPC requirements, with 47% of them thinking that the EPC band C rating is only a guidance, not law and are not aware of the pending changes due to come in, in 2025. Only and third of landlords have received guidance about what changes they need to make.
There are reports that these changes will be pushed back to 2028 for all rentals but the Mortgage Advice Bureau reveals that even this is causing confusion amongst landlords where only 35% know the law and one fifth are not even aware of the problem. Even more surprisingly, 30% only knew about the changes through friends and family.
Ben Thompson from the Mortgage Advice Bureau says
As well as cost of living pressures and higher interest rates working against landlords meeting the initial 2025 deadline, they were also clearly in the dark about the changes that they needed to make. While delaying the cut-off date before the law comes into place is clearly a sensible move, unless there is clear help unveiled to support with the cost of retrofitting, they could find themselves up against the deadline again in a few years’ time.
EPC’s are one of the hot topics in the news every week, and now a company has released some rather startling research, read on.
40 years to reach EPC rating of C
A further study by a property data company Propalt has identified that the private rented sector is not upgrading at the rate that it is needed to reach the government’s targets. They compared the number of newly issued EPC certificates in 2021, 2022 and so far in 2023 and they have calculated that at the current rate of retrofit and reassessment, it would take another 40 years to reach the government’s ambitious targets. CO-founder Kieran Slinger noted
Because we can see the full portfolios of Landlords we are uniquely placed to see what’s happening. Looking at nearly 2 million rented homes and tracing back their EPC ratings we can see quite clearly that there are two distinct categories. Smaller Landlords with 10-20 homes in their portfolios are simply selling properties that are D and below. We can see an uplift in homes coming for sale at auction that belong to smaller landlords as they look to exit the market quickly.
Larger landlords with the capacity to undertake the retrofit assessments are making the changes to their stock but not with anywhere near the voracity needed for the targets to be met. There was only a 1.6% increase in A-C certification on private rental stock compared with 3.8% of council and housing association properties in the same timeframe. Homeowners and councils have the most energy efficient homes with over 50% to a c or above rating privately and 60% of council stock achieving the same rating.
Rents keep rising
Statistics are still showing that rents continue to rise heavily, with the average rent in the London capital up 20% year on year and for the first time ever there is not a single postcode in London with an average monthly rent under £700. In fact, more than 30 postcodes now command rents of £1000.00 or more, with Chelsea passing £1500.00 for the first time.
Going further afield UK rents increased by 15% in quarter one of this year, with North East and North West being the biggest risers.
Spare Room director, Matt Hutchinson who has shared this data says
Combined with higher interest rates and an increased cost of living, that’s continuing to push rents up. Demand is likely to fall a little over the course of the year, but unless something is done to stop the continuing decline in rental supply, things aren’t likely to improve much for renters. Government has to do much, much more to help, or the housing crisis will become a housing disaster.
This is a comment that we are now hearing very often, when will something be done?
Licencing clauses to agent contracts advisable
A first tier tribunal judge in Leeds has warned landlords to ensure they have clauses in their contract with letting agents that specifically states that agents must keep the landlord informed of licencing requirements and changes, otherwise, it will be the landlord who ends up paying the fine for non-compliance.
This came about because a landlord had objected to a financial penalty imposed on him by the city’s council where he had let out a property without a licence in a selective licence area. The landlord, David Howarth used a local letting agent to manage the property but now faces a £4000.00 fine.
The judge said a previous landmark case Aytans vs Moore established that unless a landlord has a ‘contractual agreement’ with their letting agent to inform them of licensing changes, it is the landlord who is culpable. And in addition, a contractual agreement will not get the landlord off the hook but would be included in the decision-making. Because under agency law it is generally landlords who are liable for agents’ default.
As the landlord has an otherwise good history the penalty of £5000.00 was reduced by £1000.00.
Landlords, be warned.
Snippets
Majority of landlords in favour of a Decent Homes Standard for the PRS
Landlord must have known his property was an HMO says Judge
Will you? Two thirds of landlords to sell up if forced to upgrade EPC’s
Agency advises landlords on how to handle most common tenant gripes
Tenancy law reform will give renters more rights – claim
Governement’s plans for reform ‘looking to destroy’ private rented sector
Newsround will be back next week.