Welcome to our Friday Newsround, we where look at what has been trending in the housing news this week.
New case on service of tenancy deposit prescribed information
A tenant has successfully defended a possession claim on the basis that the deposit prescribed information was served before the deposit money was actually paid.
This is due to the wording of the relevant legislation which states that it should be served after receipt of the deposit money.
Landlords and agents who include the prescribed information with their tenancy agreement need to be careful about this. You should check that the deposit money has actually been paid at that time.
This case is particularly significant for section 21 claims (as service of the prescribed information is a condition for serving a valid section 21 notice). However, it will remain significant even after section 21 is abolished as it will almost certainly entitle tenants to claim the penalty fine for non-compliance with the deposit rules.
New data shows tenants’ income v rent
Canopy, a landlord & tenant services provider, has just released their latest data in their rental affordability index, which states that tenants on average are spending 36% of their take-home pay on rent, with 11% spending over 60% on rent, and 4.4% over 80%.
The highest rent-to-income ratio was Bournemouth at 46.9% with Edinburgh is in the top five for the most unaffordable city for renters at 40.6%.
Chris Hutchinson, CEO of Canopy said
What is clear is that the market is in a precarious position, in that steps clearly need to be taken to make life easier for tenants, yet further regulation is likely to drive landlords away from the market and leave a smaller pool of properties available for tenants to choose from.
Council’s first ever confiscation of landlords properties
Merton Council in South London has made history by being the first council to seize a landlords properties due to failure to license them. They introduced a new selective licensing scheme last year. It has taken advantage of a new scheme to take temporary control of the properties including the rental income, to ensure that the HMO’s run to their standards. The owner has been left still paying the mortgage payments.
Following a complaint from one of the tenants the council inspected the property and then issued several notices to the landlord who then proceeded to ignore them! The council then made an ‘Interim Management Order’ to take control of all the landlords properties.
Andrew Judge, a Merton Councillor said
This action sends a clear message to landlords: if you do not license your property, the council can and will use its powers to take over the running of it.
Largest rise in rent arrears
New stats out this week claim that rent arrears has increased by 15% from £1816 to £2092 in the first three months of 2024. Reposit, a deposit alternative state that this is due to the ongoing financial stresses for tenants and also landlords as they have increased their rent by 2% to keep up with their ongoing costs and outgoings.
Reposit also claim that a cash deposit is now not enough to cover any rent arrears or damages in 17% of tenancies. However, the overall amount of tenants leaving a tenancy with rent arrears has dropped by 3% in quarter 1 of this year.
Snippets
High yields for landlords but worries grow over rental controls
No.10 cat ‘backs’ mandatory pet damage insurance campaign
Five licensing schemes to be approved by council today
Property buyer reports vendor landlord to council over illegal HMO
REVEALED: £10k cost of getting rental properties up to Labour’s new EPC minimum
Landlord fined for failing to provide documents to council
See also our Quick News Updates on Landlord Law
Newsround will be back again next week.