Devon Landlords Newsletter Issue 1

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Issue: 1

DEVON LANDLORDS A S S O C I AT I O N NEWSLETTER The DLA Is A Not For Profit Company

October 2008


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Issue: 1

Your Advert HERE Contact the Office on 01803 314750 For more information


DEVON LANDLORDS ASSOCIATION NEWSLETTER

CONTENTS Pg 4: Residential Property Tribunal Pg 5: Changes to the Housing Act Pg 6: Landlord Fined / Convicted Pg 7: Rental Sector ‘Needs a Shake Up’ Pg 8: EPCs & HIPs Pg 9: Jail for Tenants Pg 10: Enforced SelfRegulation Pg 11: Council Trailblazers Pg 12: Stamp Duty Pg 13: Improvements to Home Rental Pg 14: Don’t Suffer from a sinking feeling Pg 15: Governments £1 Billion Housing Package Pg 16: Landlords Insurance Policies Pg 17 & 18: BPF Planning Manifesto Unveiled Pg 18: Credit Crunch Effect

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CONTACT DETAILS The Committee Stuart McNeall (Chairman) Peter Lewis (Secretary) Ted Bundy (Treasurer)

Devon Landlords Association Torquay Office: The Chambers 141 St Marychurch Road Torquay TQ1 3HW Exeter Office: Queensgate House 48 Queens Street Exeter EX4 3SR Website: www.devonlandlords.co.uk All Enquiries: 01803 314750 Email: equiries@devonlandlords.co.uk

All rights in and relating to this publication are expressly reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without written permission from the DLA. The views expressed in this newsletter are not necessarily those of the DLA and readers should seek the guidance of a suitably qualified professional before taking any action or entering into any agreement or documentation generally in reliance upon the information contained in this publication. Whilst the publishers have taken every care in compiling this publication to ensure accuracy at the time of going to press, they do not accept liability or responsibility for errors or omissions therein however caused.


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RESIDENTIAL PROPERTY TRIBUNAL What have residential property tribunals been doing since they were set up under the Housing Act? Quite a wide range of interesting cases. You may be interested in a few examples. You will remember that to apply for an HMO licence you have to show that you are a fit and proper person. Mr Lamont applied to Forest Heath District Council and in January of this year they refused him a licence on that ground. He appealed to the Tribunal. The council had decided in May 2006 that Mr Lamont's property needed a licence and sent him an application form. For a year they sent him reminders by letter and phone but without response until Mr Lamont abused and threatened to harm a council officer. Eventually he did fill in the form but with the wrong supporting papers. The council refused his application because they said he was not a fit and proper person. He had a conviction for racially aggravated harassment, his conduct towards the council staff was derisory, abusive and threatened violence and it took him 15 months to complete a valid application. Mr Lamont had also submitted a schedule of works dated March 2005 which had still not been completed. His solicitors told the tribunal that he had certain personal and financial problems and Mr Lamont claimed he was dyslexic, left school at 16 and had chosen property development because there would be little paperwork to process. His appeal was dismissed. In another case Manchester City Council obtained an interim management order of an HMO owned by a Mr Yang. They said that two tenants were evicted in an intimidating way and without due process, Mr Yang was aggressive towards council and police officers, repairs were needed to remedy category 1 and 2 hazards under the HHSRS, Mr Yang had not complied with statutory notices served by the council and did not have the correct procedures to manage the house and provide a safe home. On the day of the hearing Mr Yang submitted a timetable for repairs and management and so the tribunal was adjourned. When it next met Mr Yang said it was no longer an HMO because all of the tenants had left. This was accepted by the tribunal. The council asked for the order anyway in case similar conditions might arise in the future but the tribunal said it did not have authority to do that. In a third case Mr Parsons appealed against an order by Arun District Council which had serves two notices on him, an improvement notice for electrical defects and a prohibition notice relating to adjacent land. The improvement notice related to dangerous electrical wiring in the cottage. The prohibition notice related to adjoining land on which there was a mobile home and a group of dilapidated buildings, one of which contained a tiled swimming pool with a kitchen and living room/

office and changing rooms. There were also some smaller buildings used for storage. Mr Parsons said that the council failed to discuss matters with him but there was evidence that he had attended meetings with council officers. He said he had done the work required by the notices but could not produce a certificate of completion. Because he was in the process of refurbishing the property, the notices were, he said, inappropriate but there was no evidence that he was actually refurbishing. Finally he said the mobile home and dilapidated buildings could not be described as a dwelling but from their own inspection, the tribunal confirmed that the buildings were in use and they believed Mr Parsons himself was occupying the mobile home. The appeal was dismissed. There have also been a couple of interesting cases involving enforcement. Liverpool City Council used the Proceeds of Crime Act which is usually used against heavy criminals who stash away their ill gotten gains. The Council used it against a landlord who was managing a HMO without a licence, renting out dangerous property in breach of a Prohibition Order and claiming housing benefit when the property was subject to a Prohibition Order. In that case the landlord was subject to a fine of ÂŁ39,000 and a Confiscation Order of ÂŁ23,000 under the Proceeds of Crime Act. In another case 16 students reclaimed ÂŁ18,540, 50% of the rent they had paid in the 9 month period before they moved out against a landlord who operated an unlicensed HMO. Further cases can be viewed on the Residential Property Tribunal website: www.rpts.gov.uk


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CHANGES IN HOUSING AND COUNCIL TAX BENEFIT OCTOBER 2008 There are several changes to Housing and Council Tax Benefit Legislation with effect from October 2008. Extended Payment Scheme The current extended payment scheme will be changing slightly from 6th October 2008. From 6th October 2008 an extended payment of 4 weeks housing and/or council tax benefit will be awarded to a customer, where they or their partner stops receiving Income Support, Income Based Jobseekers Allowance, Incapacity Benefit, Employment Support Allowance or Severe Disablement Allowance due to their commencing work or increasing the amount of hours they work. The 4 weeks extended payment will be paid at the same rate as was being paid before they stopped receiving the qualifying benefit. The Local Authority must check as part of its usual assessment routine that the customer satisfies the conditions for an extended payment:• has started employment, or has increased earnings or hours of employment which is expected to last at least five weeks • has been continuously in receipt of the qualifying benefit for a period of at least 26 weeks immediately prior to it ceasing Should the claimant wish to continue claiming HB /CTB whilst earning, the movement into work is treated as a change of circumstances for benefit purposes and a new claim is not required. This means that the claimant will continue on the same rent scheme as he was prior to the cessation of the qualifying benefit. Income from Child Maintenance payments Currently £15 per week is disregarded from child maintenance payments, in the calculation of housing and council tax benefit. With effect from 27th October 2008 the income will be fully disregarded. The condition for this is that the payment is made for the maintenance of a child who is resident in the claimant’s household. Backdating benefit The housing and benefit regulations allow for the date a customer makes a claim to be treated as made earlier:Pension aged customers – a claim can be treated being made up to 12 months prior to the actual date of claim where the claimant/partner is aged 60 or more Working age customers – a working age customer can apply for their claim date to be backdated for up to 52 weeks from the date of request for backdate. However, this group must demonstrate that they had good cause for not claiming earlier i.e. in hospital, out of the country, bereavement etc The Department for Works and Pension wishes to change the regulations to reduce the maximum length of time a claim can be backdated to 3 months. It is envisaged this change will take effect from October 2008, but the date has not yet been confirmed. It is important that landlords tackle rent arrears early,

and ensure that their tenants have made a claim for housing benefit at the earliest opportunity. Employment and Support Allowance (ESA) As part of the Governments reform of Welfare Benefits, it has introduced the ESA from 27th October 2008. The aim is to tackle inactivity amongst people claiming incapacity benefits. From 27th October it will no longer be possible to make a new claim for incapacity benefit; those existing recipients will still remain on ICB for the time being. People between the ages of 16 and pensionable age will claim ESA. There are two element to ESA:- Contributory and Income Related. Each element is paid in two stages:Assessment phase – a 13 week phase where the applicant will receive a basic rate. They will undergo a Work Capability Assessment during this phase, where it will be established if they have limited capacity for work. Main Phase – if the applicant is considered to have limited capacity for work they will receive an added component either a work-related component or a support component (for the more severely disabled) from the 14th week. For Housing and Council Tax Benefit the Income Related ESA will be treated in the same way as Income Support and Income based Jobseekers Allowance and the customer will be passported to maximum eligible benefit. The contribution based ESA will be treated as an income along with any other income or capital they may have.

changes to Housing and Council Tax Benefit Legislation with effect from October 2008

These changes in benefits will be nationwide—please contact your local Housing Benefits office if you have any queries.


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LANDLORD FINED FOR POOR STATE OF PROPERTY A Bristol landlord of two flats and a shop, in such a poor condition that the health and safety of the tenants was threatened, has been fined £12,600 plus costs in Bristol Magistrates Court. Shemim Yaqub, owner of the properties at 109 East Street, in Bedminster pleaded guilty to 11 offences under the Housing Act 2004 and the Licensing and Management of Houses in Multiple Occupation (Additional Provisions)(England) Regulations 2007. The prosecution followed a Council investigation after a tenant complained about the poor state of the property. Council action was stepped up after a fire in the flats during which the fire detection system did not function and the fire separation between the shop and the flats above was inadequate. (Smoke and fumes spread into the escape route from the flat, but fortunately all occupants managed to leave the premises without injury). The property was found to be in a poor state of repair with a number of problems that threatened the health and safety of the tenants. Problems within the property included a leaking WC causing sewage to leak into a hallway, dangerous electrics and a large pigeon infestation in the roof. The Council served formal notices on the 8th December 2006 under the Housing Act 2004. These required the landlord to correct problems found at the property for fire safety, electrical hazards and lack of heating. These gave until the 15 July 2007 for the works to be carried out to remedy the problems. The property was re-visited by officers from the Council on the 2 July 2007. Officers accessed most parts of the premises and found no evidence that the landlord had carried out works. “We gave every opportunity to the landlord to put these serious faults right but we were forced to prosecute finally for the safety of her tenants”, said Councillor Judith Price, Cabinet Member for Homes and Streetscene. “We hope that the level of this fine will be a warning to other landlords From Bristol City Council website

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FIRE-TRAP HMO LANDLORDS CONVICTED OF FAILING TO LICENSE PROPERTY Two landlords have been fined £16,000 for renting an unlicensed three-storey house in multiple occupation that posed a ‘major fire risk’. Nayab and Bushra Haider, of Silicon Court in Milton Keynes, let the HMO to eight tenants but did not register it with Milton Keynes Council. A joint inspection last August by housing officers and the fire service revealed there were no adequate fire escapes. An order was immediately issued banning the use of the second and third floors of the premises. The probe also uncovered concerns over gas leaks and poor electrical wiring. The landlords pleaded not guilty at Milton Keynes magistrates court to failing to licence the property causing a fire risk. Passing a guilty sentence Phillipa Cook, chair of the magistrates said it was ‘a very serious matter’. In addition to the fine they were ordered to pay legal costs of £2,085.77. Jane Harrison, senior private sector housing officer, said: ‘It is important that landlords are aware of the legislation and those who choose to disregard it can expect to face similar stiff penalties. Landlords should also note that the conversion of a house into a HMO, flats or bed-sits is a matter that would require written planning consent from the council.’ From Environmental Health News


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RENTAL SECTOR ‘NEEDS A SHAKE UP’ The report is the third from the Law Commission on housing legislation Too much property in the private rented sector is in a poor condition, is badly managed and requires better regulation, according to a Law Commission report. It wants a central regulator to oversee landlord associations and professional bodies in England and Wales. The proposal is for this to replace the courts or tribunals as the first port of call for disputes between landlords and tenants. The report says the p r iv a t e rented sector has a "poor reputation". H o u s i n g downturn The report is the third on the effectiveness of housing laws published by the Law Commission. It is particularly relevant now as the rented sector tends to see a rise in demand, and thus rising costs for tenants, during a housing market slowdown. The Law Commission - whose remit covers England and Wales - said its project was not proposing major changes in the law, but ways of making it more effective. The report said the sector suffered from a poor reputation which prevented it from playing as full a part as it should in the national and local housing markets. "An increasing number of people are deciding to rent in the current economic climate making it more important than ever that the private rented sector takes its place effectively in the housing market," said Professor Martin Partington, the Commission's consultant on housing law. "Too much privately rented property is in a poor condition and poorly managed." Regulation The Commission said that few landlords belong to a representative body. It has called for landlord accreditation schemes to be set up in every council area. It wants landlords to either join one of these schemes, become a member of a private landlords association or rent out premises through an accredited letting agent. All of these professional bodies would then be overseen by the central regulator, called a housing standards monitor. It would also like to see a single code of housing management practice for landlords. Stronger regulation would remove some of the worst accommodation from the market but the report said it was important to keep up the amount of available rented property. Peter Cosmetatos, of the British Property Federation, said that good landlords would be happy to regulate themselves, but for bad landlords who "slipped under the

radar" regulation would be difficult to enforce. David Salusbury, of the National Landlords Association, said that "building on voluntary self-regulation" would be a good thing for landlords and tenants. From BBC News Many thanks to Robert Jones for spotting this item

An increasing number of people are deciding to rent in the current economic climate Prof Martin Partington


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EPCs Communities and Local Government (CLG) is keen to build on the introduction of energy performance certificates (EPCs) to bring about change in the way householders and businesses use energy. To do so, one suggestion from Government is for the Energy Savings Trust (EST) to write to the owners of those residential properties with an EPC scoring of F to G with suggestions on how to improve the property's energy performance. In order for the EST to do this, it would need access to the EPC register, and a consultation paper seeks the

views of stakeholders on this proposal. Our initial thoughts are to support the Government's proposal, on condition that strict data control guarantees are put in place. The consultation also seeks views on the proposal to allow EPC assessors to access the EPC register to, we believe, better target their services at those whose properties do not have EPC assessments in place. We do not support this proposal and will make representations to Government along these lines. From the BPF

HIPS Caroline Flint has announced plans to increase the amount of information available for potential buyers in home information packs to speed up sales. The proposals include calls for a property information questionnaire, providing information on building work carried out on a property, and an increase in the amount of information on leaseholds. The Conservatives have said it will lead to a council tax revaluation. From RoofBlog

The Law Society has told the BBC that some estate agents are breaking the law by marketing properties without ordering a home information pack. Estate agents say that sellers are reluctant to pay up to £300 for the pack when the housing market is slowing, and they often delay drawing them up until a sale has been agreed. A representative of estate agents confirmed the practice was taking place, but said that the packs were ‘useless’ to both buyers and sellers and were only used as a legal formality once a sale was agreed From RoofBlog

CLONING EPCs Communites and Local Government released guidance yesterday on the “sampling” (i.e. cloning) of Energy Performance Certificates for similar dwellings owned by the same landlord. The document can be found on the CLG website at the following address: http://www.communities.gov.uk/planningandbuilding/ theenvironment/energyperformance/publications/ epcshomes The guidance outlines two methods for the sampling of EPCs: • a common values approach where data from one property is adjusted and customised for variations in other properties. For example an EPC from a midfloor flat could be adjusted to be appropriate to a top-floor flat through this approach, if the dwellings are identical in all other respects. • an average (median) approach which involves identifying a group of similar properties, surveying them, and if the results for the sample are within the required tolerance limits, generating EPCs for other dwellings in the group, using the average (median) result We have been in dialogue with CLG on the requirements of the guidance as we feel the dataset sample sizes required for the ‘accurate’ sampling of EPCs are too high (see table 2, p. 18 “Dataset sample

size”). On feedback from members, we believe that landlords are likely to experience difficulties in providing access to the number of properties required the guidance (35-50% of properties) to undertake the sampling and we have pushed for a lowering of these threshold requirements. CLG have agreed to keep the sample sized under review and will act to amend the guidance if the threshold requirements prove to onerous for landlords, provided the accuracy of the EPCs remain. If members are undertaking / are likely to undertake the sampling of EPCs using either of the methods above, and have had problems with providing the level of information required in the guidance or can demonstrate that accurate EPCs can be generated from a lower sample size of similar properties please get in touch. This would be excellent ammunition to take to CLG. It would be a great shame if the sampling of EPCs was made too arduous for landlords due to inappropriate sample sizes required in the government guidance. James Anderson BPF


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JAIL FOR TENANTS FILMED LANDLORD HAVING SEX A tenant who secretly used his mobile phone to film his landlord having sex has been given a nine-month prison sentence. Scott Jones, 33, of Chelmer Road, Medway, Kent, Jones was convicted of two charges of voyeurism at Peterborough Crown Court on 13 July and was eventually sentenced at Doncaster Crown Court this week. The offence took place while he was renting accommodation at a house in Huntingdon, Cambridgeshire. A jury at Peterborough Crown Court was shown the 10minute footage. The couple, who cannot be named for legal reasons, had come in from a night out and left the bedroom door ajar. The landlord became suspicious of Jones after sensing someone at the door the landlord later took Jones’ mobile phone while he slept. He downloaded the footage onto his own computer before deleting it from the phone and contacting the police. Jones pleaded not guilty to the two charges of voyeurism. He told police officers that the couple had asked him to film them and have sex with them. The couple denied these suggestions. Before sentencing Jones to his nine month sentence, Judge Jacqueline Davies said the invasion of privacy and considerable amount of embarrassment caused to the couple had to be taken into consideration.

FOR ATTACKING LANDLORD A tenant who repeatedly attacked his 60-year-old landlord over a period of time causing her several injuries has been jailed for three years and two months. Stephen Johnstone, aged 39, of Sandy Lane, Weston Point, pleaded guilty at Warrington Crown Court to causing grievous bodily harm to Ellen Ramanouski. The court heard how he kicked or hit her every day and that the landlord had suffered a broken ankle, punctured lung and fractured ribs as a result of the attacks at her property in Elizabeth Court, Widnes. During a hospital visit to treat the injuries she told a doctor she had been assaulted by a person she knew but was too frightened to name him or tell the police. Ms Ramanouski’s sister called the police and Johnstone and another tenant, Claire Fort, were arrested. The pair initially denied the allegations but police managed to acquire corroborating witness statements from friends and neighbours, plus video interview with the victim in which she revealed Fort had also assaulted her. As well as the prison sentence Judge David Hale also gave Johnstone a lifetime restraining order to protect Ms Ramanouski and her friends and relatives. Fort received a one-year conditional discharge and a £100 fine when she appeared at an earlier hearing in December before Halton magistrates where she pleaded guilty to the assault. From Residential Landlord website

TENANT SUING LANDLORD FOLLOWING BURGLARY A woman who had more than £600,000 worth of jewels and cash stolen from her Mayfair apartment, is suing her landlords for more than £700,000 because she claims they failed to repair or replace a faulty burglar alarm. Rebecca Wang, who is a friend Prince Charles, believes the crime would never have happened if managing agent GVA Grimley had carried out proper maintenance on the

alarm. Court documents reveal Miss Wang is taking the action against landlords Berkeley Square Holdings, a company which is part of a business owned by the Abu Dhabi royal family. The lease on the property was negotiated by Savills. From Residential Landlord website

ANTI SOCIAL TENANT EVICTED FROM FLAT A tenant who carried out a series of acts of anti-social behaviour causing disturbances to his neighbours has been evicted from his flat by a Housing Authority. The incidents included use of foul language; urinating in communal areas, drunken behaviour, indecently exposing himself and indecent acts in public. Selwood Housing took action against Simon Burnley, aged 33, who moved into Haynes Road, Westbury in Wiltshire in January this year on a 12-month starter tenancy.

He is also being charged for neglecting and damaging his home which broke the terms of his tenancy agreement. Selwood Housing operations director, Paul Moore said: “If anyone in our neighbourhoods is suffering because of antisocial behaviour, by getting involved and having the courage to speak out, we can make individuals like Simon Burnley accountable for their actions.” From Residential Landlord website


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ENFORCED SELF-REGULATION WILL MAKE ‘GOOD’ LANDLORDS BETTER BUT ‘BAD’ LANDLORDS WORSE As the third and final part in its series on housing law reform, the Law Commission has announced its proposals for better regulation of the private rented sector. The report, Housing: Encouraging Responsible Letting, follows consultation with both landlords and tenants. It focuses on improving the overall coherence and stability of the current private rental framework in a cost-effective way. Based on the principles of smart regulation, the Commission recommends a programme of staged reforms designed to promote self-regulation and enhance voluntary initiatives already in place in England and Wales. The proposals include: • Creating a housing standards monitor (for each of England and Wales) for the private rented sector • Establishing an associated stakeholder board to which representatives of all sides of the private residential rented property sector are appointed • Developing a single code of housing management practice for landlords • Making landlord accreditation schemes available in every local authority area • Launching a pilot programme for home condition certificates The Commission proposes that independent evaluation and development of appropriate incentives to make the programme attractive to landlords should supplement these initiatives. Professor Martin Partington, who was the Commission’s Special Consultant on Housing Law in charge of the project, said: “Too much privately rented property is in a poor condition and poorly managed. The law does not operate as Parliament intended. An increasing number of people are deciding to rent in the current economic climate making it more important than ever that the private rented sector takes its place effectively in the housing market. The recommendations in our report are aimed at benefiting both landlords and tenants by enabling them to use existing legal processes more productively thereby more fully realising the intended impact of housing legislation. Implementation of these reforms would not only improve rental conditions for tenants, but also help to build the reputation and professionalism of landlords. More broadly, it would encourage institutional investment in the provision of rental accommodation, enhancing the important role of this sector in the wider economy.” However, the British Property Federation (BPF) believes that there is no shortage of regulation already in the private rented sector. And that what this sector needs is investment not more under-resourced regulation. Ian Fletcher, residential director, said: “The British

Property Federation broadly welcomes the Law Commission’s report because we want a better standard of rental housing for people that would encourage greater investment and spur on more build to let development. “The main problem with improving standards is a shortage of funding for enforcement. Local councils just do not have sufficient staffing or money, something which simply shifting the function to other bodies will not resolve. We oppose enforced selfregulation, because it will only ever make ‘good’ landlords better and ‘bad’ landlords worse. “The good – who are traceable - will generally always comply, while the bad ones will always stay off the radar. “We support voluntary accreditation, backed up by tax incentives, to rapidly increase its use and we advocate having a trade body led accreditation schemes and therefore maintain brand confidence. We are equally supportive of the suggested MOT for rental accommodation, providing it simplifies landlords’ existing commitments and therefore the suggested pilot is a good way forward. “The rental market has the potential to provide truly affordable, long term accommodation for millions. The BPF wants to see tenants treated as customers and with the right balance of legislation, investment and political will, this should be a possibility.” From Residential Landlord website


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12 COUNCIL ‘TRAILBLAZERS’ TO OFFER HOMES AND JOBS ADVICE to be available to everyone. These new trailblazers will Advice on training, employment and childcare are just do just that. They will be a stepping stone to some of the extra services that will be on offer to independence, giving people the people when they discuss their advice they need to find training and housing options with their local Trailblazer Councils: a job as well as a home." authority said Housing Minister 1) Camden Each of the trailblazers will get up to Caroline Flint today as she £350,000 to develop their housing 2) Croydon announced the winners of the advice services, making links to first of two programmes of 3) Greenwich employment advice and other 'trailblazers'. 4) Hammersmith & Fulham services in accordance with their The twelve trailblazers will offer locally identified needs. The funding a greater range of advice to 5) Southwark will enable local authorities to create people looking for housing, with 6) Norwich advice services tailored to the needs some moving towards a 'one stop of their local area and local clients, shop' approach of personalised 7) Nottingham away from the one size fits all advice and links to employment 8) Kettering approach. opportunities and training. One winner, Croydon, plans to link Currently people have to go to 9) Blackpool housing advice with learning and several different places to find 10) Calderdale training services through a scheme the advice they need to make called 'Broadening Horizons', realistic decisions about where to 11) Ashford bringing new skills and expertise to live. 12) Bournemouth frontline housing staff. Two officers The trailblazers intend to change based in the central housing advice this approach by providing centre will go out and about in the community to advice on the full range of housing options from social provide advice and assistance to those in need. Other housing to shared ownership to privately rented trailblazers plan to offer IT lessons or hold a weekly properties, linking this with wider employment-related job club at the housing office, enabling people to learn advice to ensure that people are fully informed and able about their housing options while brushing up on skills to make the right choice for their individual such as CV writing, interview skills and job search circumstances. assistance. Speaking at the 'Focus E15', an East London foyer run The twelve trailblazers will also take on a mentoring by East Potential that provides support, training and role, sharing best practice and support with around 20 accommodation to young people in housing need, councils that will receive funding to kick start their Housing Minister Caroline Flint said: own enhanced housing options schemes in 2009/2010. "I've seen at first hand the real difference that can be From Department for Communities and Local made by giving young people access to both housing Government and employment advice and we want this opportunity

LANDLORD BECAME SUSPICIOUS OF ‘POLICEMAN’ WHO COULDN’T SPELL A prospective tenant who pretended to be a police officer in an attempt to fool a landlord almost ended up in jail. The landlord became suspicious when he visited his Colchester property in July to collect a tenancy agreement from 23-year-old Simon Lucas. He had listed his employers as Essex Police but the landlord noticed there were spelling anomalies. He contacted the local police force and discovered they had never heard of Lucas and that another police officer’s name he had given as a superior was made up. After being arrested, Lucas spent two weeks in custody for breaching the conditions of a community order for an unrelated conviction.

He then appeared before South East Suffolk Magistrates' Court for sentencing, after pleading guilty to impersonating a police constable. The court heard that Lucas, formerly of Kesgrave, had also told his girlfriend he was a police officer. Magistrates imposed a 14 week prison sentence, suspended for 12 months. Edward Draper, chairman of the bench, told the defendant that a custodial sentence was appropriate in his case but it had been decided to suspend any jail term for a year. He was also told to complete 100 hours unpaid work. From Residential Landlord website


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£8,000 FINE FOR HAVING 13 PEOPLE LIVING IN 4-BEDROOMED HOUSE A Lincolnshire landlord has been fined £8,000 and ordered to pay costs after a police discovered 13 people from five different countries living in one of his properties. Boston Magistrates Court heard how Manuel Ridierp was illegally using a four-bedroom house in Queens Road Boston for the tenants. In November last year he had been asked to supply details of his tenants and served with a notice restricting the number of people who could live in the property. After receiving complaints from neighbours regarding noise and litter, council officers and police decided to

raid the house in March. In it they found an Italian family and two Brazilians using the garage and grounds floor as a living area. In the five rooms upstairs were two more Brazilians, a Polish couple, two Portuguese men and a Spanish man. All were living in poor conditions and there was no evidence of any fire safety regulations. Ridierp was prosecuted under two sections of the Housing Act 2004 and fined £4,000 on both counts. He was ordered to pay £150 costs and a £15 surcharge. From Residential Landlord Website

FEWER LANDLORDS GOING TO COURT FOR POSSESSION Fewer landlords are going to court to issue possession claims against their tenants according to the latest figures from the Ministry of Justice. 28,042 landlord possession orders were made during the second quarter of 2008 down, a one per cent drop from the first quarter of the year.

In 2002 the annual number of possession orders by landlords reached 195,473, but by 2007 this had fallen to 146,790. Commenting on the newly-published statistics, the National Landlords Association welcomed the downward trend in landlord possessions From Residential Landlord Website

STAMP DUTY NEEDS MORE THAN A HOLIDAY The government should use a mooted stamp duty holiday to conduct a more fundamental review of the tax but not dither over the decision, says the BPF. Stamp duty is currently paid at one per cent on homes bought for between £125,001 and £250,000, three per cent between £250,001 and £500,000, and four per cent over £500,000. The tax has raised £31.5billion over the last decade. Ian Fletcher, residential director at the BPF, said: “Stamp duty in its current guise distorts the property market. If the government is contemplating a temporary holiday we would urge it to conduct a review of some of the tax’s more fundamental flaws. Hundreds of thousands of people have extended their homes or dug out their basements rather than pay the huge sums in tax which crossing one of the thresholds creates – that is a significant distortion. “Equally, in the residential investment market it is wrong that an institution should pay stamp duty at the top rate on the aggregate amount of a portfolio, whilst individual investors will pay a significantly lower rate per unit.

“Therefore, while any temporary cut will be welcome in the short term if it helps kick start some activity in our moribund housing market, the government needs to think more strategically about reforming stamp duty so that it better supports people moving and encourages institutions to invest in housing supply. Current market difficulties and private misery illustrate that policy should not be promoting ‘ownership at all costs’. Private rented homes have housed more people this century than social housing and owner-occupation combined. We need measures to boost rental and to help shape quality housing that is truly affordable.” From the BPF


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MPS CRITICISE ‘CHAOTIC’ GOVERNMENT FAILURES IN PLANNING A report by the Communities and Local Government Committee has said the long term failures of the planning system risk “paralysis or chaotic and underregulated growth”, threatening housing and regeneration targets. The committee has said that there are too few planners and that many lack the necessary skills to do their jobs, adding that “despite these problems being recognised for more than a decade, little has been done to rectify them”. The British Property Federation (BPF) has welcomed the findings but urged action, saying that the glut of government studies and consultations needs to be replaced by real improvements. The trade body for the UK property industry, representing developers, investors and advisers, also says that local councillors must get proper training before making decisions on which planning applications to approve and reject. Liz Peace, chief executive of the BPF, said: ”The majority of this report is welcome, but it’s time for some action after a decade of frustration. Our overcomplex and unresponsive planning system costs businesses and the taxpayer millions and is putting regeneration and economic growth at risk. One of the principal problems is the lack of suitably trained and experienced planning officers; it needs to be tackled by

serious investment in planning as a career for graduates and a recognition of the skills needed to make the whole system run efficiently. “Local councillors must also get proper training. It is incredible that those involved in a quasi-judicial process do not have to have formal training. You wouldn’t hire an accountant or lawyer without the appropriate certificate, so how can councillors take big decisions about developments without an understanding of, amongst other things, development economics? “However, it is pointless beefing up skills and numbers if they are then employed on low level tasks that do not require that level of skills. We need to ensure that the skilled planners we do have are used on ‘quality’ planning issues and not diverted onto domestic cases that could well be dealt with by a technician.” This report follows a parliamentary inquiry earlier in the year. The BPF’s own planning manifesto will be launched in September fully outlining the BPF’s vision for the future of planning. From the BPF

MOVE TO IMPROVE HOME RENTAL WELCOMED Sweeping reforms to buy to let are set to be recommended in a report by the Law Commission today broadly supported by the British Property Federation. The BPF believes that there is no shortage of regulation already in the private rented sector, and that what this sector needs is investment not more under-resourced regulation. Ian Fletcher, residential director, said: ”The British Property Federation broadly welcomes the Law Commission’s report because we want a better standard of rental housing for people that would encourage greater investment and spur on more build to let development. “The main problem with improving standards is a shortage of funding for enforcement. Local councils just do not have sufficient staffing or money, something which simply shifting the function to other bodies will not resolve. We oppose enforced selfregulation, because it will only ever make ‘good’ landlords better and ‘bad’ landlords worse. “The good – who are traceable - will generally always comply, while the bad ones will always stay off the radar. “We support voluntary accreditation, backed up by tax incentives, to rapidly increase its use and we advocate

having a trade body led accreditation schemes and therefore maintain brand confidence. We are equally supportive of the suggested MOT for rental accommodation, providing it simplifies landlords’ existing commitments and therefore the suggested pilot is a good way forward. “The rental market has the potential to provide truly affordable, long term accommodation for millions. The BPF wants to see tenants treated as customers and with the right balance of legislation, investment and political will, this should be a possibility.” From the BPF


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Issue: 1

DON’T SUFFER FROM A SINKING FEELING Of course, not all cracks are due to subsidence, Owners of commercial property may not always visit particularly in new buildings. However small, usually the premises on a regular basis, but it could be a good diagonal, cracks which suddenly appear (particularly at idea to schedule in a programme of property weak points, such as around doors and windows, inspections so that you can keep an eye out for some of especially after long periods of dry weather) could be the less obvious problems that can develop. indicators. Cracks that represent a threat will normally Abuse of the property by tenants can be fairly easy to (but not always) be thicker than a 10p coin, spot, as can the need for routine and usually wider at the top. maintenance. But there is a potential What to do hidden threat that also needs to be watched If you spot any of these problems and can't out for and that is subsidence. find a reason for them, you should contact Many people tend to associate this risk your landlords’ insurance provider or with periods of long hot weather, when the insurance broker as soon as possible. It will soil dies out and causes shrinkage – or trees then be necessary to identify the cause of the start to draw water from further afield to damage and what needs to be done to stop it stay alive and thus undermine nearby and once any movement has been stabilised property. But in fact, subsidence can have a the necessary repairs can be carried out. number of causes including long periods of With subsidence, the sooner it is diagnosed wet weather and even alternating wet and the better. dry spells. In each case, it is extremes that You don’t need desert Professional advice for all your property can lead to problems. According to the Royal Institute of conditions to suffer from owners’ insurance needs subsidence Ensuring that you have the right landlord’s Chartered Surveyors, subsidence can also insurance is essential if you are to be be caused by previous mining activity or as properly protected. If you wish to discuss any points the result of water leaks into the soil from broken arising from the above please do not hesitate to contact drainpipes or similar outlets, which can wash soil away the Landlords Department at Alan Boswell Group, who from foundations. This is particularly apt to happen will be delighted to help you. where soil has high sand or gravel content. Contact Alan Boswell Group on 01603 216399 Ordinary household insurance usually provides cover for subsidence, albeit with a massive excess (the Stephen Phillips amount that you have to pay before the insurance cuts On behalf of Alan Boswell Group in) which can be as much as £1,000, or more. However, this is not always the case with property owners’ insurance. Some landlords’ insurance policies do not provide subsidence cover irrespective of whether it is commercial or residential property. This is important to check your insurance for, because many mortgage lenders will make it a requirement that such cover exists and its absence not only exposes the owner to a very large financial risk – claims can easily run into five figures – but could result in the mortgage being called in. Unwary landlords could thus find themselves exposed to the double whammy of having to find tens of thousands of pounds as well as re-arrange their borrowing at the same time. Tell-tale signs Regular property inspections should look for evidence of movement in the ground beneath the property. These can include: • New or expanding cracks in internal plasterwork or other wall coverings; • New or expanding cracks in outside brickwork or cladding; • Doors or windows sticking for no particular reason; • Rippling wallpaper or other coverings that is not caused by damp.


DEVON LANDLORDS ASSOCIATION NEWSLETTER

GOVERNMENT’S

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£1B HOUSING PACKAGE IGNORES BUY TO LET MARKET SAYS BPF

The major cross-government package of new measures to meet current challenges in the housing market has received a mixed reception from the property industry. Communities Secretary Hazel Blears said the £1b package is to help first time buyers struggling to get onto the housing ladder, support vulnerable homeowners at risk of repossession, and support the house-building industry. The Chancellor of the Exchequer also announced that stamp duty land tax will not apply to purchases of residential property of £175,000 or less. In a third step, the Department for Work and Pensions (DWP) announced new support measures to help vulnerable homeowners meet their mortgage interest payments. The British Property Federation (BFP) has questioned the effectiveness of measures which are only focused on home ownership, even though this may not be the best course of action for everyone. Speaking to the BBC, the BPF said that the government should focus on stirring new development and dealing with the massive demand for rental housing by incentivising a large professional rented sector. In German, rental makes up 50 percent of the housing market, compared to 10 percent in the UK. The BPF expressed doubts about the effectiveness of the new interest-free loan scheme being jointly funded by councils and developers, which would loan them a 30 percent deposit. Such buyers may yet have trouble raising funds due to being perceived as ‘sub prime’. Ian Fletcher, BPF director for residential policy, said: “We welcome these announcements but question why so many are focused on home ownership when it’s clear that demand for rental housing is soaring. “The country faces a number of housing crises and whilst this will target help at those home buyers in most desperate need, it will need to be augmented in the forthcoming months if it is to be seen as a truly comprehensive package. “We need to look to Europe and develop a branded rental sector funded by institutions which would deliver truly affordable well-managed homes. Incentivising investment in build-to-let would cost the government practically nothing. We also need to revise the way stamp duty is unfairly aggregated (meaning that big investors pay more than they should) and look at how rental is treated for planning purposes. The Council of Mortgage Lenders (CML) welcomes the integrated package of housing market measures announced and at the same time has urged the government to focus on the mortgage funding markets as much as on the consumer-facing initiatives. CML director general Michael Coogan said: “Essentially this package is directed at the blockages in the housing market for some vulnerable consumers.

This is welcome, but until more funding is available we are still some way from restoring long-term stability to the housing and mortgage markets. “The mortgage rescue proposals for some borrowers who would otherwise become homeless, while also welcome, will help only perhaps 6,000 households over two years. Lenders must - and do - see repossession as a last resort. “The stamp duty concession for properties under £175,000 is something of a curate's egg - good in parts. It will reduce transaction costs for some buyers, which is welcome. But we estimate that around half of all housing transactions will still be caught by stamp duty. James Hyman, Partner for Residential Sales at Cluttons, said: “This announcement will finally resolve the stamp duty fiasco that has hovered over the housing market in recent weeks. It is a huge relief that the uncertainty surrounding stamp duty has been removed, as rumours of a total suspension of the tax had an immediate and detrimental impact on the whole market. “However, the change in the stamp duty threshold to £175,000 offers little benefit to the majority of homebuyers, as it falls far below the average property price in most regions of the country. This proposal is woefully inadequate and the industry deserves more, given the damaging effect of the stamp duty rumour mill. Citizens Advice Chief Executive David Harker said: “We welcome the package of measures, particularly the cut in the waiting time and increased capital limit for Income Support for Mortgage Interest, reforms to the safety net for homeowners which we have been urging for some time. “These could be an effective way of keeping people who lose their jobs suddenly and have no savings to fall back on in their homes. Helping people stay in their homes will reduce the risk of social exclusion that arises when families have to enter temporary accommodation, with children having to change schools before eventual rehousing, possibly involving yet another change of school for the children. RICS spokesperson James Scott-Lee said: “The Government has failed to listen to the property industry and respond to market pressures and their proposed measures will have little impact on those suffering as a result of the current crisis. Action to increase lending by improving liquidity in the mortgage market is essential as part of a coherent package of measures alongside help for first time buyers and protection against repossession. Without making it easier to get a mortgage, the Government is doing no more than tinkering around the edges of the housing market downturn.


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WHAT MOST LANDLORDS INSURANCE POLICIES INCLUDE Alternative Accommodation... Most landlords’ insurance policies will provide anything from 10% or 20% of the sum insured (in addition to it, rather than as part of the cover) to cover loss of rent for up to 12 months, should the premises be damaged and become uninhabitable. However, something that may not always occur to landlords is the need also to cover the cost of re-housing a tenant if they have to move elsewhere during a period of rebuilding or renovation. A good landlords policy will allow up to 25% of the sum insured (in addition to the loss of rent cover) to provide money for alternative accommodation for a tenant, where necessary. Unoccupancy... Few buy-to-let properties are let continuously; there are bound to be times when the property is unoccupied. This can occur both on initial purchase and, more frequently, between lets. It is important to ensure that your policy does not exclude reasonable periods of unoccupancy. Ideally, cover should allow for an initial period of up to 60 days and then inter-letting periods of up to 90 days. Constructions… Most premises are built of brick or stone, with a slate or tiled roof. If not, additional charges may apply. A good landlords’ insurance will only charge extra premiums in the case of timber framed buildings and thatched roofs. Subsidence… If there are any sign of cracking that could suggest subsidence damage exists to the property, this should be declared to the insurance company before any cover is arranged. Otherwise, there could be misunderstanding as to when such damage originated, as subsidence has often a long history and damage to the property can occur over a number of years and possibly before the insurance was taken out with a new insurer Setting the sum insured on your landlords policy … When setting the sum insured for your property, it is important to remember that it is the cost of rebuilding that matters, not the market values. This can be higher or lower, depending on market conditions. The Association of British Insurers provides a useful calculator to help you. Sums insured can be 'index linked' to keep pace with inflation, but you need to ensure that this is kept up to date, with periodic reviews. Please refer to website http://calculator.bcis.co.uk

Other insurances for landlords to consider... A landlords’ insurance policy should also include third party liability cover up to £5,000,000 in respect of any one incident, although this may be restricted to £2,000,000 in the case of terrorism. It will also normally include employers' liability cover up to £10,000,000 for any one incident, to cover cleaners, gardeners, caretakers, and persons doing minor maintenance and repairs. Legal expenses and rent guarantee cover can be arranged, where required. Despite a slowdown in the housing market – as well as indications that commercial property is becoming less easy to sell – owning rental property can be a good form of long-term investment. Rebuild Value... Sums insured are 'index linked' to keep pace with inflation - but it is your duty to ensure that you cover the property for the full rebuild cost as insurers can only pay out to the maximum of the total sum insured in the event of a claim. Please contact us if you are in any doubt as to your property's current rebuild value. Of course, you need the basics; insurance to re-build the property in the case of total devastation by fire or other risks. But the traditional “fire and special perils” insurance, while including cover for storm damage, flood damage, as well as accidental damage to TV aerials and fixed glass in windows and doors, is no longer adequate for today’s needs. Landlord customers should consider the need for “all risks” cover on both buildings and any contents that they may have in the property. While “all risks” is something of a misnomer, this cover does go well beyond the traditional scope of insurance to cover accidental damage caused by a wide range of non-deliberate events. Buyers of landlords’ insurance should make sure that the insurance company and insurance broker are aware that the property is occupied by tenants. A normal home insurance policy will not do, because the cover and costs assume occupation by the owner. A specialist landlords’ insurance will generally allow you to let to students and tenants on housing benefits without additional charge. But it is important that you tell your insurer if this is the case as some companies apply restrictions. Bateman Insurance Consultants Limited

Sums insured can be 'index linked' to keep pace with inflation, but you need to ensure that this is kept up to date, with periodic reviews. Please refer to website http:// calculator.bcis.co.uk


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BPF PLANNING MANIFESTO UNVEILED Sainsbury’s planning chief Sue Willcox will today unveil the BPF's Planning Manifesto, with a host of measures to improve the system without the need for more time consuming and costly legislation. The BPF will say that developers should be encouraged to contribute resources to help local authorities deal with planning applications. Councils are already allowed to do this but unnecessary fears over issues of probity are restricting its use. Councillors should receive formal planning training to help them take more informed decisions. Currently, there is no mandatory training and the industry believes councillors could benefit from a better understanding of how the property market works. Smaller applications like loft-extensions should be dealt with by planning ‘technicians’, leaving qualified planners free to tackle major schemes that have a big affect on communities. Councils should also be encouraged to outsource work to private consultants, or form partnerships, using the freed staff for higher level work; a move currently being pioneered by Salford City Council and supported by the Audit Commission. The Planning Manifesto is designed to make the best of the system we have, rather than rewrite it again. These improvements will be vital to the delivery of new homes and other large projects, with delays and uncertainty costing business and public bodies tens of millions of pounds a year. Liz Peace, chief executive of the BPF, said: “Our recommendations are designed to make the best use of what we have, mostly without the need for legislation or substantial extra local authority funding. We must ensure local politicians and officers understand how development operates and encourage developers to contribute towards more efficient processing of applications. “The BPF has fully supported government planning reforms but we feel there are still a lot of obvious and relatively simple changes that could be made. This manifesto is a direct response to the government’s call for the industry to support their aspirations for improvement and provides them with a blueprint for real action.” Sue Willcox, chair of the BPF’s planning committee and head of town planning at J Sainsbury, said: “We need to make a real effort to ensure the communities we create are a gift to future generations. The potential for private-public partnerships is huge, enabling students, trainees and others to have experience working in the private sector. It’s something we already champion at Sainsbury’s. “But we need to reform the way we work. We’ve seen examples of developers having to resubmit entire applications simply because of very minor changes.

Councils’ demand far too much information out of fear of judicial review of decisions; this is something the government needs to amend. Ultimately, we need to stop trying to rewrite the system and concentrate on improving what we have.” Francis Salway, president of the BPF and chief executive of Land Securities, said: “The desire of major developers to improve planning shows just how high up the agenda this issue is for us. Improving planning is central to regional economic growth. “We are committed to making best practice case studies available to both the public and private sectors in conjunction with the National Planning Forum, ensuring that the culture change in planning is disseminated across the planning community. Developers are also prepared to take a more proactive role in helping train planners and councillors with a regular programme of secondments.” Adrian Penfold, head of planning and environment at British Land, said: “These are self-help recommendations that are intended to promote a better trained and resourced planning regime. Now is the time to step up to the mark to free up resources to focus on important plan making and major planning application work, share skills, and bring about efficiencies and benefits for hard pressed local authorities and the communities which they represent.” Gary Forster, planning consultant with Turley Associates, said: “Obesity and terrorism should not be concerns for the planning system; instead we need to focus upon cutting out unnecessary layers to ensure quicker decisions and the economic growth that follows, which is particularly critical in the current economic climate. “Resources are finite and need to be targeted where it matters and where the outcomes warrant it. This certainly needs better training for officers and councillors in some areas such as economics of development but using up these resources on minor applications for TV aerials is ridiculous. To have minor domestic alterations in the same system as major developments is simply disproportionate to what the outcome will be.” Richard Ford, head of planning at international law firm, Pinsent Masons, said: "The BPF proposals rightly identify the need to improve what we've got rather than mess around any further with the planning system. Recommendations to improve planning officer and councillor training and


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BPF PLANNING MANIFESTO UNVEILED increase cross authority working are welcome. Improving recruitment and retention of planners, as well as removing minor applications from planners' workloads, are also very sensible. “Another key area identified for improvement is speeding up statutory consultee responses which can be truly woeful - there should be penalties for late responses. Finally, the suggestion to require planning appeals to concentrate on the reasons for refusal looks a good one, as does using tax increment financing to fund infrastructure - the BPF have usefully raised some key points of debate here." Planning Manifesto recommendations: 1. Improve recruitment and retention of planners 2. Let planners get on with planning, removing minor applications

3. Encourage Councils to outsource mainstream planning functions 4. Encourage councils to accept property industry funding for planning resources 5. Make councillor training mandatory 6. Pool resources across local authorities 7. Incentivise local authorities to promote development 8. Use tax increment financing to fund infrastructure 9. Reduce information required to support planning applications 10. Speed up the contribution from statutory consultees 11. Improve and incentivise pre-application discussions 12. Require planning appeals to concentrate on the reasons for refusal A copy of the full report can be downloaded from the BPF website—www.bpf.org.uk

CREDIT CRUNCH EFFECT ON PRIVATE RENTED SECTOR EXISTS ON IN THE IMAGINATION The last three months have seen a rise of almost 20 percent in new tenancies, according to the latest quarterly survey of its member letting agents by ARLA, the Association of Residential Letting Agents. This is in line with other market indicators showing that the private rented sector is taking up the slack as the owner-occupier market cools. This sharp rise in demand has in part been the cause of an increase in rental returns, which throughout the country rose from 4.8 percent to 4.9 percent for both houses and flats. Outside of Central London, 64 percent of agents continue to report that tenant demand exceeds the supply of properties on their books, while in the central London area this reduces to 41 percent. The ARLA survey shows that the values of houses to rent in prime central London rose by 8.3 percent. The values of flats to rent rose by an astonishing 13.7 percent in prime central London and, away from London and the South East still rose marginally by 0.4 percent. Away from London, values fell by 4.6 percent. ARLA believes that, although these figures are comparable to the latest figures in the Land Registry Index, there is also a probability that more expensive properties being released onto the rental market have had an effect on the responses to the survey. Despite these bullish figures, investment landlords are still waiting to see what will happen to property prices before making new investment decisions. However, it is now clear that the peak for buying and selling rental property occurred during the autumn and spring of 2006/7. Commenting on the latest figures, Ian Potter, ARLA's Head of Operations said: “This steady rise in rental

growth that we see yet again, coupled to clear evidence that there is no unusual selling, proves once again that the credit crunch effect on the private rented sector exists only in the imagination. This is underlined by the short void periods and length of time that tenants stay in rental properties.” The average time rental properties are empty remains short, at an average of four weeks or less a year. This take up is further boosted by tenants continuing to stay in properties for longer periods. On average, tenancies are lasting for 16.7 months, rising to well over 18 months in London. Rents have increased moderately over the last six months. The average rent achieved for the three months to the end of August was £387 a week for houses and £253 for flats. Prices ranged from £799 a week for houses in central London and £532 for flats, to £214 for houses and £144 respectively away from London and the South East. The latest figures show an average rise in rents of 3 percent for houses and 7 percent for flats, largely driven by the London increases. Across all regions, the average rent of a house is at least half as much again as the rent for a flat. All areas report that there are properties, mainly houses, coming on to the rental market because they cannot be sold. However, as yet, the number is unquantifiable. Meanwhile, 84 percent of ARLA's member letting agents believe that immigration from the new member countries of the European Union has had an impact on the rental market. From Residential Landlord website


DEVON LANDLORDS ASSOCIATION NEWSLETTER

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Issue: 1 BATEMAN ADVERT

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