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TODAY'S OTHER NEWS

Government approves new PRS licensing scheme

Plans to introduce a new licensing scheme for privately rented homes in Barking and Dagenham has been approved by the government.

Under the terms of the new borough wide five-year Property Licensing Scheme, which is expected to cover around 20,000 privately rented homes, every privately rented property in Barking and Dagenham will need to be licensed and comply with strict conditions to ensure each property is safe and properly managed.

The council currently has a Private Rented Property and additional HMO Licensing Scheme which will end on 31 August 2019. It will be replaced by the new scheme which will start on 1 September 2019.

Private rented homes currently make up 27% of the borough’s housing.

The current licensing schemes has helped the council to instigate 70 prosecutions and serve 570 enforcement notices requiring properties to be made safe.

Cllr Margaret Mullane, cabinet member for enforcement and community safety, commented: “It is fantastic news that the Government has approved our new Property Licensing Scheme for five years, right across the borough – the first of this kind to be given government approval anywhere.

“It will be a key weapon in our continuing fight to improve standards in the private rented sector. We are absolutely determined to protect our tenants, making sure they live in safe homes that are in good condition and well managed.

“The scheme will help us to continue to weed out rogue landlords who put tenants at risk, and to crack down on crime, antisocial behaviour and overcrowding. We will also ensure that landlords deal with problems including rubbish in front gardens and noise which are often linked with over-crowded accommodation.

“Everyone deserves a decent and safe home and we will continue to drive up standards in Barking and Dagenham to protect our tenants, ensuring that no one is left behind - and we will come down hard on landlords who feel they can put profit before people.”

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    None of my properties require a licence, at present, i have nothing to hide, and have nothing against licencing other than the cost, which of course will be passed onto the tenant by means of increased rent, governments can hit us landlords all they like, it's the tenants that will be paying.

  • John Cart

    "governments can hit us landlords all they like, it's the tenants that will be paying"...…………..until the a***holes decide that rent control would be a good idea.

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    No rent controls as yet, will worry about them if or when they happen.

     
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    I know what next renters will want security of tenancy & to know their rents cant go up above a certain amount & as for rent control that will effect my bottom line, ill just make more rooms in my many HMO's

     
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    scheme is to make money

  • Paul Barrett

    Since when did LL become responsible for how tenants dispose of their rubbish!?
    Surely the Council addresses such issues with the tenant!?
    So where will all the illegal immigrants live if every LL will require to be licenced!?
    There are probably more illegals in Barking and Dagenham than any other part of the UK.
    Perhaps they should have some vans driving round with an an advert inviting ILLEGAL immigrants to go home!!!!?
    I suggest Govt is facilitating this scheme as a testbed for future nationwide licencing.
    I presume Govt is aware that there are millions of fraudulent tenancies out there!?
    If Govt wants to introduce such nationwide licensing it first needs to ban ALL Lenders from having any mortgage conditions which ban LL from taking on HB tenants.
    Then it needs to ban insurers from having differential premiums for HB tenants with LL insurance.
    It would then need to ban residential mortgage lenders from requiring CTL if the homeowner needs to let the property.
    It would need to ensure that lenders would accept LL insurance for residential properties that are let out.
    It would need to ensure that where LL are letting on a short-term basis that any freeholder would be required to automatically give permission for such activities to take place in a block.
    Block insurance would need to be amended to include those LL letting to AirBnB etc.
    There would have to be 90 day checks to ensure that licenced LL are not exceeding the 90 day maximum.
    Govt and councils will do none of this.
    Which will just go to show that it is nothing but a money making scheme


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    No need for Rent Controls too late for that, the market has already collapsed, the Government has achieved its objective. The cow has gone dry.

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    Hardly those who brought years ago own outright and will go on making a killing

     
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    From 1st June as I understand it the LL cannot reduce the Rent for the Tenant once a Contract has been entered into or continuing. The amount of rent charged cannot change & has to remain the same every month of the Tenancy.

    Paul Barrett

    Not my understanding.
    A new AST is a new contract.
    A LL may issue a new contract.
    If it is considered that a new 6 month AST is an extension of the old AST then LL will have to give a free rental day to tenants who then move in the following day having vacated the previous day.
    As far as I am aware such rent reductions are meant for the 2nd month though I confess I am not sure.
    But surely rent reduction may not occur during a FTT which means that many LL will start issuing only 6 month AST.
    That gives them the flexibility to reduce or INCREASE rents!!!
    Doesn't matter what Govt tries it will not prevent LL making sure the tenant pays.
    Govt is trying to ensure the LL suffers the financial hit.
    It won't work.

     
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    I never renew tenancies, we are able to increase rents once every 12 months without a new tenancy agreement, so I see no reason why rent couldn't be reduced the same way if necessary

     
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    Correct renewal or new and if i want an increase the staying tenant or new tenant pays or they dont stay or take,, simple

  • Paul Barrett

    Self-managing LL are far better able to manage a new FTT.
    LA have a business infrastructure to maintain.
    If they can't charge what is needed then how will the LA stay in business?
    LA may be left with little recourse than to increase LL management charges.
    This may then cause LL to abandon using LA.
    So it would be a self-fulfilling prophecy that even more LA would go out of business.
    LL have their own cost pressures and the LA is the first expense to go.
    Many LL especially those leveraged ones will consider increased LA management fees as unsustainable.
    Many LL will seriously investigate whether they can manage without a LA.
    This is very dangerous for LA.
    LL might discover they are able to manage perfectly well without a LA.
    Doing so immediately increases LL profit.

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    So many young men & women working in Estate Agency likely to loose their livelihood. Rogue regulators non stop to destroy business, do they not know that they are providing a service for a fee, the Potential Tenants are not forced to use them, it’s their option & services cannot exist without a payment. It’s just doing away with jobs.

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    Spot on Michael.
    Unfortunately, estate agents are less thought of than MP's, so the public won't have any sympathy for them.
    They just want us to provide a service as cheaply as possible and 'take the hit' with regard to all the costs that are incurred in setting up a tenancy.
    I can't think of any other situation where you would have such a service provided free of charge?
    Also, I can't see large corporates getting involved in the PRS, especially if Labour get in and introduce rent controls.

     
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    We as LL’s have been strangled & weighted down with unpaid work load since 2004 Deputy Premier Housing Act. I now read at least another dozen of freebies that LL’s has to preform out of unpaid labour. This must surely be in breach of Modern Slavery Act 2015.

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    Do you estate agents out there think its fair to charge £90 to renew a TA for another year, which would be the 3rd year. Is £90 fair and justified please reply Letting Agents.

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    I never renew my tenancy agreements, I just let them carry on until the tenant wishes to give notice.
    Anyway, down here, the agent charges the landlord for the renewal, not the tenant.

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    Missing point. Tenants TA up for renewal and LA trying to charge £90 to renew for 3rd year. As original TA was first signed before 1st June 2019. Both tenant and LL want another 12mth TA, is £90 a fair and justified charge?

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    No it isn't.
    You never gave the circumstances, so I didn't miss the point?
    Down here they would charge the landlord £30, which seems fair.

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    Did give circumstances, has to sign another TA because signed first one before 1st June 2019 ie 2 years before. Now if wants to stay has to sign another TA and LA trying to charge £90, i was asking LAs if they felt this was fair and justified . When you say down here what area ate you covering and are you a LA, JH?
    We all know that you can print off a TA for the cost of the paper and ink and electric to work printer, its charges like theseie £90 that make the government step in with Fee Cap, LAs have only themselves to blame.

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    I have been posting on here for a while and I am from the Newport/Monmouthsire area, where the rents are rock bottom, so I know all about trying to make ends meet.
    I am a landlord and I use an agency on a 'tenant find' basis only.
    Fortunately, I don't have loans on my properties, otherwise I would be in negative equity.
    The prices of the houses down here have risen in some areas by 30% or more, due to the tolls being removed on the bridge and the cost of houses in Bristol, but the rents have remained the same for around 20 years.
    Regards.

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    Cheers.
    I notice an absence of LAs stating what is a fair fee charge!
    Yes down on south cost use LA o ky for TF but tend to source quite a few myself. Typical 3 double bed house in Southsea can achieve £1000 to £1450, but i not fear LAs will be disappearing and LL have to start being realistic .

  • Paul Barrett

    I have always been a self-managing LL.
    Over the years the amount of paperwork required for tenancies has seemingly increased exponentially.
    Now I like to give a full set of paperwork for each tenant.
    Mostly I have about 4 tenants on one 6 month AST.
    I am always shocked at how much printer ink I use.
    Invariably it costs me about £20 just to print out all the bumf we have to give to tenants.
    I appreciate that technically I only need to produce one set of documents.
    I produce more than 4 so that when tenants leave at least they have a record of that tenancy.
    I also do attached rent books.
    Now if I was a LA with a High St office to operate I can see how a fee of say £50 would be justifiable.
    It costs me £20 but I don't charge for my labour and don't have the costs of a LA.
    However there is NO point in renewing an AST and I NEVER have.
    NO tenant has ever requested an AST renewal.
    All my tenancies have proceeded onto a SPT.
    Do LL seriously imagine that a FTT will prevent a tenant vacating prematurely if they need to!!??
    All an AST does is prevent a LL evicting within the FTT period providing the tenant confirms to the AST terms.
    Well if a LL offers a renewal AST they are hardly considering giving the tenant NTQ!!
    There is simply NO need for renewal AST.
    Some tenants may prefer a renewal AST and if they do then they should have to pay for it.
    But for the vast majority of tenants proceeding onto a periodic tenancy from an initial 6 month AST is all that is needed.
    Renewal AST's have basically been a method for LA to extract money from tenants.
    So completely unnecessary!
    Having an AST or periodic tenancy is just the same.
    The tenant will leave whether the LL likes it or not.
    Seriously how many LL would bother pursuing a tenant who vacates early!?
    I find that all I need to do is explain my circumstances and all my tenants have been perfectly content to proceed from AST to periodic tenancy.
    One thing I do tend to do which I know is unnecessary is I send out the latest edition of the How to Rent booklet.
    These things cost me little but for a LA these costs mount up.
    Perhaps now that it costs LA will no longer have renewal AST which achieve nothing.
    Whilst I sympathise with LA where were they when the JR on S24 was occurring!!?
    The sounds of silence from LA was deafening!
    So just like S24 is putting many LL like me out of business so might the TFA do for LA as well.
    New paradigms are occurring in the LA industry.
    Business models for LA and LL alike will need to be adapted.
    If not possible then time to leave the industry.
    There will be survivors who will go onto to thrive.
    But there will be many LL and LA casualties along the way.
    LA and EA employees need to start looking for other employment opportunities as many will be made redundant in the coming year.
    There is not a lot any of us can do about this.
    The various bits of legislation are here to stay.
    It is either adapt or die!



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    London is a stupid market for sure & we are hammered from all angles, yet I get less that 3% return + a whole raft of extra costs including licensing with fees double most other parts of uk. The North West where to could get 4 properties for the price of one in L’don & get 6 / 9% return. Then you won’t be able to pass on even one property on to your family with-in the Nil Rate tax Band where as in NW pass on 3 / 4 properties free of Inheritance
    tax, we are doomed & Discriminated against.

  • Suzanne Morgan

    I am in the same position as you John. I manage my own property and on my second tenant I did all the work as my tenant was a friend of my first tenant who vacated to emigrate to Japan. It can be risky managing your own BTL property but it enables me to maximise return and keep the rent reasonable for my current tenants who are great. Yes the value of the house has risen but the rent return remains stagnant.

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    I can’t get my head around the outcome of Court Case where there was implications with regard to Assured Short Tenancies after say the 6 months ended. Then became Statutory Periodic Tenancy but the argument was whether it was a Contractual or Statutory Tenancy, the difference being if it was one as opposed to the other the LL became responsible for the c/tax, big danger.

  • Paul Barrett

    With many LL having to amend their AST in light of the TFA now would be the ideal time to add the SPT and CPT options.
    Delete whichever one isn't required.
    Personally I would always proceed onto a CPT.
    But because AST of the past automatically included SPT that is what most LL including me did.
    But the Council Tax issue is a very real one.
    CPT is far more effective than a SPT.
    That stops the Council chasing the LL when the Tenant doesn't pay.

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    All of us quiet following Tenants anti-Private LL’s Act 1st June, a list of no no as long as your arm, everything at LL’s expense, we cannot even ask them to keep the garden where they throw all their belongings they don’t want but that doesn’t matter I am free labour dogs body for them. The Act missed an opportunity for LL’s to have to the Tenants to live in our property.

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    Sorry I said We’ll have to pay the Tenants to live in our property. I think they have nobbled my phone it likes to change whatever I say.

  • Paul Barrett

    I presume that the additional costs that LL will be incurring now will be offsetable against tax.
    But of course LL will have to pay out for these costs before receiving the tax offset every year..
    Rents will increase.
    We'll see whether tenants believe they can swap with impunity to other LL.
    If all LL increase their rents it won't be much point in tenants going through all the hassle of moving.
    It is all a question of who blinks first.
    If it comes to a new tenancy my rent will be higher in the first 6 month AST and reduce for the following 6 month tenancy.
    The rent in the first 6 months will include any fees and the extra 3 weeks of rent as a deposit.
    It won't be referred to as such.
    Other LL should do the same totally negating the TFA.

  • Paul Barrett

    @Dave Edmunds
    Yes the cash rich will make a killing until rent controls are introduced.
    But even they don't have the cash resources to buy unencumbered.
    So some will be stiil subject to S24.
    But we will see the cash rich use corporate entities.
    Govt doesn't really care about what the cash rich do.
    But it definitely cares about the little leveraged LL who it wants gone as a sole trader but will permit as a corporate entity with the same number of leveraged properties.
    Govt just hates the sole trader LL which is bizarre as there is no difference between a small corporate LL and a sole trader one.
    Well from now on of course there is...............Corporates don't pay tax on fictitious income unlike the sole trader LL with the bonkers S24 tax policy!!

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    Hi leveraged LL’s got well stitched up at least the existing ones before s24 was introduced because they bought in good faith according to the rules & taxes at that time. They could only have based their decision on those rules & regulations, how else would you make any business decision. Section 24 should only apply to purchases that were made after it was brought in. It’s not much use phasing it in over 4 / 5 years when we buy property based on loans over 25 years.

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    That seems sensible.

     
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