Issue price: £12 (where sold)
ISSue no.154
UKLandlord THE LEADING PUBLICATION FOR THE PRIVATE-RENTED SECTOR
JANUARY/FEBRUARY 2012
Big Issue founder John Bird on private sector landlords “There is no point being in housing if you cannot make a profit, but ultimately all landlords fulfil a social purpose.”
IN THIs IssUE
Landlords’ wish list for the Budget 2012
What is a safe home?
LHA and the under 35s
Expert advice on damp
EDITORIAL
UKLandlord January/February 2012: Issue 154 ISSN 1741 8801 Publisher’s statement: Circulation 22,500 PUBLISHER The National Landlords Association 22-26 Albert Embankment, London SE1 7TJ Contact > Richard Price, Director of Operations E: richard.price@landlords.org.uk
Welcome... A very happy New Year to you! We start 2012 with a new Government housing strategy in England at the same time as the impacts of the new Welfare Reforms and Localism agenda begin to kick in. The details of these topics were discussed at the NLA’s successful National Conference (see pages 25-29) where the keynote speaker, Terrie Alafat, Director of Housing Growth and Affordable Housing at the Department for Communities and Local Government, stated that the private-rented sector (PRS) has now become a crucial part of the economy and society.
EDITORIAL Editor > Andy Stern E: andy.stern@uklandlord.org.uk Managing Editor > Louise Gale E: editorial@uklandlord.org.uk T: 020 3235 1805 ADVERTISING & PRODUCTION For all enquiries and bookings: Advertising Manager > Steve Pearce E: advertising@uklandlord.org.uk T: 0117 957 5400
For David Salusbury, the NLA’s Chairman, 2012 will be the year of the landlord as the NLA rolls out its strategy to increase further professionalism in our sector and to provide one voice for the private-rented sector. And, in his first interview with UK Landlord, CEO Richard Lambert talks about how the NLA can continue to best serve the interests of its members locally and nationally.
NLA CONTACTS Membership T: 020 7840 8937 (9am-5pm Mon-Fri) E: membership@landlords.org.uk Media Enquiries: T: 020 7840 8906 (9am-5pm Mon-Fri) E: press@landlords.org.uk General Enquiries and Correspondence with the NLA: 22-26 Albert Embankment, London SE1 7TJ T: 020 7840 8900 (office hours: 9am-5pm Mon-Fri) F: 0871 247 7535 E: info@landlords.org.uk www.landlords.org.uk Advice Line (members only): Telephone number available from Members Area of www.landlords.org.uk Registered as a magazine © The National Landlords Association 2012. All rights reserved. No part of this publication may be scanned, reproduced, stored in a retrieval system, or transmitted in part or whole in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without prior permission of the National Landlords Association. The description of a product or service in this publication does not constitute an endorsement by the National Landlords Association. The Publisher does not accept any responsibility for any claims made by advertisers. Written and oral advice from the National Landlords Association or contained in this publication is given in good faith but no responsibility whatsoever is accepted by the Association or its Officers for the accuracy of its advice, nor shall the Association be held liable for the consequence or reliance upon such advice. All the articles in this publication are for general information only and are not intended to be advice to any specific person. Readers are recommended to seek professional advice before taking or refraining from taking any action on the basis of the contents of any article in this publication. ISSN 1741 8801
Social entrepreneur, John Bird – founder of the Big Issue, the magazine and charity which helps homeless people help themselves – always has something interesting to say. On pages 10-11, he presents his solution to the housing crisis which involves more seamless and equitable relationships between local authorities, housing associations, and private landlords. Serious concerns persist amongst the landlord community about the impact on tenants and landlords of Government caps on housing benefit payments. This is highlighted by a recent NLA survey indicating these cuts could force over three quarters of landlords out of the Local Housing Allowance market. In this issue, landlords share their experiences so far of how the new rules for under 35s will work in practice. Finally, at a time when the Government clearly needs to boost confidence and economic activity, we have set out a wish list (page 6) for the Chancellor in advance of his Budget this Spring. These measures would provide stimulus to the economy and a strong signal to landlords that the Coalition is serious about creating investment and easing the housing crisis. Best wishes for 2012,
Printed on paper from sustainable forests. Please pass this magazine on to another landlord and then recycle. Design and Artwork by Rubicon Marketing Ltd 0117 957 5400
INTRODUCING THE NLA BOARD
Chairman David Salusbury
Chief Executive Officer Richard Lambert
Andy Stern Editor andy.stern@uklandlord.org.uk
Director of Finance & Administration Patrick Jacobs
Cover photo by Martin Gammon for New Business Magazine
Director of Operations Richard Price
Director (marketing) Anthony Lock
Director Carolyn Uphill
Director Tony Richard
UKLANDLORD JANUARY/FEBRUARY 2012 01
02 UKLANDLORD JANUARY/FEBRUARY 2012
CONTENTS
Inside this issue... NLA
FEATURES
04 04 MESSAGE FROM THE CHAIRMAN David Salusbury sets out why 2012 should be the year of the landlord.
06 THE BUDGET 2012 Suggestions for Chancellor George Osborne’s Budget.
07 HOT OFF THE PRESS 12 NLA ACCREDITATION Hart District Council and Brian Bachlin talk about NLA Accreditation.
29 NLA NEWS
Interview with NLA CEO Richard Lambert, key decisions from the AGM and a call for landlords to join the quarterly survey panel.
37 LANDLORD DEVELOPMENT
REFERENCE
08 HOW THE NEW LHA RULES FOR UNDER 35S WILL AFFECT LANDLORDS Landlords look at the practical, financial and social consequences of the new changes.
10 THE UK LANDLORD INTERVIEW: JOHN BIRD, FOUNDER OF THE BIG ISSUE Social entrepreneur John Bird talks about the importance of the private-rented sector in the Big Society.
25 NATIONAL CONFERENCE 2011 ROUNDUP Localism and landlords, preparing for the Green Deal, and summaries of breakout sessions.
42 Q&A: WHAT IS A SAFE HOME?
Courses in 2012.
40 PUBLIC AFFAIRS Westminster and Brussels update.
56 MAXIMISE YOUR MEMBERSHIP 57 NLA MEMBER VIEWPOINT 60 LETTERS & EMAILS
52
25
NLA Director Richard Price explains how the Housing Health & Safety Rating System works.
50 EXPERT ADVICE ON DAMP How to spot signs of condensation and damp and what you and your tenants can do about it.
14 LANDLORD PROPERTY MANAGEMENT
14 BUYING & SELLING Squatting to be criminalised in England & Wales. 14 FINANCE & TAX HMRC cracks down on stamp duty and properties abroad. 14 PLANNING Calls to ease office to home conversions. 18 SELECTIVE LICENSING Newham Council plans licensing for entire borough.
18 FINDING TENANTS NLA works with Crisis on PRS scheme. 20 LOCAL HOUSING ALLOWANCE Housing Benefit cap to hit hard. 22 MAINTENANCE AND REPAIRS Guide to subsidence and preventing frozen pipes. 24 SUSTAINABILITY Saving energy over winter.
47 my|deposits 52 MORTGAGE MARKET ROUNDUP Analysis of trends and latest buy-to-let mortgage deals.
53 HOUSE PRICES AND LETTINGS MARKET Latest market statistics and surveys on house prices and lettings market plus auction analysis.
REGIONS
NLA SERVICES
31
44
31 REGIONAL NEWS Kent Credit Union to ring fence LHA payments for landlords in Kent.
32 LANDLORD EVENTS 34 SOUTH EAST FOCUS Regional investment information, with detailed insights from NLA Representatives.
44 NLA RECOGNISED SUPPLIERS “I think there’s a tectonic shift happening in housing in this country. It’s a tremendous opportunity for the PRS to show it can offer solutions to the current housing shortage in the form of good quality, well-managed homes that people want to live in.” Richard Lambert, NLA CEO.
48 INSTAGROUP: INSULATION PIONEERS FOR THE PRS 49 PORTAL TAX CLAIMS: CAPITAL ALLOWANCES 59 NLA ADVICE LINE ON TENANCY DEPOSIT PROTECTION UKLANDLORD JANUARY/FEBRUARY 2012 03
MESSAGE FROM THE CHAIRMAN
January/February 2012
2012 – The year of the landlord David Salusbury, NLA Chairman The Government’s new housing strategy in England is a timely reminder of the importance of housing in national life and the relationship housing has with the economy. The role of the private-rented sector is recognised as key to housing growth which, in turn, is a critical factor for this country’s economic growth. The NLA welcomes the importance the Government attaches to the pivotal role played by the sector, and welcomes the non-regulatory approach to encourage improvement and growth. With demand for rental housing likely to increase, and with nearly fifty thousand households in England alone living in temporary accommodation, the NLA believes there needs to be flexible options for the private-rented sector and, equally importantly, incentives to increase the stock of well-managed, rental accommodation. There is a clear role for the NLA to play to support the evolution of the sector into the UK’s second largest tenure. In fact, we see the framework established by the new housing strategy as an opportunity in 2012 for the NLA to
04 UKLANDLORD JANUARY/FEBRUARY 2012
further develop our own strategy for increasing professionalism in the sector, and at the same time re-double our efforts to bring about a unified voice for the private-rented sector. For these reasons the NLA agrees with many of the objectives of the Government’s strategy in England, which chimes with our belief that a non-regulatory approach will help to secure the private-rented sector as a strong, flexible and desirable tenure of choice. To this end, one of the NLA’s major objectives is to raise standards. We will continue to do this by raising the importance of initiatives such as NLA Accreditation. I was pleased to hear that there are now nearly 1,000 landlords accredited through our scheme, 32 local authorities who use NLA Accreditation as their sole scheme, and 5 others who recognise NLA Accreditation. That said, it should be mentioned that NLA members who for perfectly valid reasons decide not to follow the accreditation route have access to a wide range of other tools provided by the NLA to support their efforts to take a professional and business-like approach to being a landlord. The
NLA Online Library, our Focus e-newsletter and this publication spring to mind, and, of course, always double-check problem areas with the NLA Advice Line. Well-informed landlords will help improve the professionalism of our sector. As part of this picture, our drive to increase contacts with members continues to gather pace, with twelve new NLA branches opening in recent months across the country, from Dundee to Southgate. There is at least one NLA landlord meeting almost every working day somewhere in the UK. These meetings provide excellent opportunities for local landlords to network and find out about trends and latest developments in their local areas, and at the national level. The close relationship we last year entered into with the UK Association of Letting Agents (UKALA) as part of a mutually beneficial business agreement will continue to develop through a range of benefits and services so that we can create common standards and we speak with one voice. Another area where the NLA can help make significant improvements to the nation’s housing stock is by encouraging our members
to very carefully consider the Government’s Green Deal scheme to improve energy efficiency in rental properties. This was the subject of a presentation at our very successful National Conference last year (see page 25-29 for more details). I encourage landlords to give serious consideration to taking advantage of the scheme to improve their properties when products become available this year. While the cost of these improvements will be a key factor, I believe that the Green Deal is innovative and presents an excellent opportunity for landlords to improve the energy efficiency of their properties; it will also help tenants save on their bills and do their bit for the environment. As a priority in the coming year we will continue to strive to work constructively with local authorities, however difficult that may be in some situations. Regrettably, there are local authorities that appear to believe that the blanket use of Article 4 directions (to restrict planning for shared housing) and blanket licensing is some sort of magic bullet for the private-rented sector. The reality is
different. What is required is for local authorities to apply a sustained, determined effort – based on clear analysis and, dare I say it, commitment of resources – over a prolonged period to drive rogues from the sector and achieve the results that everyone wishes to see. There is no single, regulatory solution and I am pleased to note that this is also the Government’s view. I keep on saying – but it bears repetition - that landlords need to be seen by government as the solution, not the problem. I will round off by mentioning ongoing work at the European level. As we start the year, the NLA is working through our membership of the UIPI to minimise the impact of the EU mortgage directive which threatens to remove the distinction between buy-to-let and domestic mortgages. The UIPI is also exerting considerable influence on the hugely important Energy Efficiency Directive. For more information, see page 41. Happy Landlording! n
The role of the privaterented sector is recognised as key to housing growth which, in turn, is a critical factor for this country’s economic growth.
Read more online www.landlords.org.uk
UKLANDLORD JANUARY/FEBRUARY 2012 05
NLA CAMPAIGNS STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
Find out here about the NLA’s latest campaigns to encourage the Government to achieve a healthy private-rented sector. The Budget – what landlords want to hear With the country’s economy slowing down sharply, unemployment rising, and a persistently high deficit, Chancellor of the Exchequer George Osborne needs to unveil a new strategy for economic growth that removes the regulatory burden on businesses and encourages investment by the private sector. Having missed his opportunity in his pre-Budget position last Autumn, UK Landlord looks at what Mr Osborne can do to support the Private-Rented Sector (PRS) and help ease the housing crisis. When George Osborne stands at the dispatch box in March 2012, individuals and businesses around the country will be hoping for some fairly radical moves to help get the country out of the economic mess in which it has been mired for the best part of four years. For landlords, one of the most important steps that Mr Osborne can take is, of course, to reform Capital Gains Tax, to provide an incentive to continued investment in rental property. The current rates applicable to qualifying gains made on the sale of property are 18 and 28 per cent depending on an individual’s earnings and presiding tax rate, and are payable irrespective of whether a landlord intends to reinvest these gains. The abolition of taper relief in this area has made a serious dent in the long-term returns that can be made from investments in the PRS; Mr Osborne needs to restore a CGT system in which a lower rate is paid on gains made from properties held for longer periods of time. Discouraging speculation is
a noble aim, but as it stands the current CGT rules penalise many small investors who have planned for rental property to provide their main source of post-retirement income. As the NLA has often argued, an investor in rental property is providing a real, tangible service to the community. The proportion of households living in the PRS now stands at over 16 per cent; landlords are a major part of the solution to today’s housing
crisis. The country’s tax system needs to recognise this contribution. Not only that, but landlords also need to benefit from roll over relief in residential property, if they intend to re-invest their gains. This would encourage them to reinvest their capital, expand their portfolios, and bring more supply to a housing market that is in desperate need of rental opportunities.
To see more about the external affairs activities of the NLA, go to the Public Affairs section on page 40. 06 UKLANDLORD JANUARY/FEBRUARY 2012
A consistent approach In addition, the Government needs to think long and hard about the full implications of its proposals to remove the exemptions from Council Tax for empty properties. While it goes without saying that the country needs all the housing supply it can get, these proposals, as they currently stand, do not allow for the possibility of landlords refurbishing and therefore improving the quality of their properties between tenancies. A more joined up approach is required: landlords are being encouraged by the Government to use their void periods this year to voluntarily implement Green Deal measures, but at the same time risk further penalties if they do so. The Budget also presents an ideal opportunity for the Government to provide a more consistent approach towards Council Tax liability for HMOs, which varies wildly across the country. HMRC needs to provide guidance for local authorities, and we need to see a harmonised system of council tax benefit and liabilities. The current uncertainty and inconsistency on the issue is discouraging landlords from investing in new HMO supply.
Hot off the Press!! Dane Svenson NLA Press Officer Our recent survey of members found much concern about housing benefits, with many PRS landlords considering an exit from the sector. Meanwhile, landlords are being urged to check their insurance policy fine print to make sure there is appropriate cover for their rental properties, and the PRS was given resounding endorsement at our National Conference.
Landlords to leave LHA market
Our most recent survey of NLA members regarding local housing allowance (LHA) cuts showed a startling three quarters of those who have tenants on benefits plan to scale back their involvement in the sector. New caps will limit benefit payments based on the size of the property, and they will be based on the 30th percentile of local average market rents, rather than the 50th percentile. The survey found 77% of landlords with these tenants are either reducing their involvement in the LHA market, or plan to do so. Mortgage Introducer reported “NLA research has found the LHA cuts will have a varied impact on families across the country, with some losing hundreds of pounds.” This will only place even more pressure on the already stretched LHA market.
“Exciting time for the PRS”
VAT cuts needed Economists from all ends of the political spectrum are calling on Mr Osborne to reduce VAT rates, at least temporarily, in order to provide a boost to consumption. What better time then for the Chancellor to listen to landlords and reduce VAT on renovations and home improvements to the reduced rate of 5 per cent? This would significantly reduce the cost of carrying out repair and maintenance work, help to modernise ageing housing stock and also remove much of the advantage traders currently operating in the ‘black market’ have over legitimate tradesmen who charge the appropriate VAT. In 2011, Mr Osborne proved that he was listening to the interests of the PRS. The stamp duty reforms of last year’s budget were welcome. However, the reality is that these will make a real difference to bulk property purchases by the largest property companies, and will have less of an impact on the smaller landlords who make up for so much of the rented sector. With the very future of the Eurozone at stake, clearly the Chancellor has major macroeconomic problems to consider. But any solution to our current economic problems will have to be based on the growth of the private sector. The Private-Rented Sector is an increasingly large part of the UK housing market and of the wider economy – and with just a few well considered tax measures, Mr Osborne has the chance to stimulate investment and encourage an increased supply of housing for our growing population. n
The NLA has held another successful National Conference in Manchester. As well as interactive workshops and a chance to question our panel of industry experts, landlords also heard from keynote speaker Terrie Alafat, from the Department for Communities and Local Government. Landlords were told “It is an exciting time for the private-rented sector. Housing is definitely at the top of the government’s agenda. There is recognition about the flexibility of the sector. It isn’t a last resort, it is actually a sector which is the choice for people who do want that flexibility, who may want to move to work, and provides housing for those who can’t access other forms.”
Are you properly covered?
Landlords are being reminded to check their insurance policies, as apparently many do not realise that ordinary home insurance doesn’t cover rental properties. With rents continuing to rise, landlords are well advised to ensure they protect their rental income with a solid insurance policy, including a rent guarantee policy if needed. Some landlords mistakenly believe their policy will pay out if the tenant stops paying the rent. But as The Times reported, “it often only reimburses lost rent for periods when a property is uninhabitable because of another event covered by the insurance, such as fire”. As always, read the fine print and extend the policy for rent guarantee if necessary. And, do a thorough background and reference check on all tenants before they move in.
Want to know more...? • Fancy a read of the NLA blog? It’s all here: http://nlauk.wordpress.com • Follow us on Twitter to read the latest NLA news and industry comment www.twitter.com/nationalandlord • Become a fan of the NLA on facebook: http://tinyurl.com/yztxyd4 • Drop us an email if you think there are issues that the NLA should be investigating: press@landlords.org.uk Follow us at twitter.com/nationalandlord
UKLANDLORD JANUARY/FEBRUARY 2012 07
FEATURE: WELFARE REFORMS STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
How the new welfare reforms are affecting landlords As changes to welfare reform will continue to be developed during 2012, UK Landlord will talk to landlords across the country about the impact of these changes and their views on future reforms. These first interviews are with two landlords in Scotland and one in England about the impact of the changes that take effect this month across the UK for single people living in self-contained accommodation and who are aged between 25-35. As from January 2012, single people under 35 and with no children will no longer receive Housing Benefit based on one-bedroom, self-contained accommodation. People in this category will only be entitled to the lower rate of Housing Benefit for a room in shared accommodation. “The silence has been deafening since the Government announced this change. I am surprised there has been so little debate – this represents a major change and it is being brought in quickly. There is a lot of uncertainty about how this will work in practice and I doubt my tenants are aware of the situation. Together with other local landlords, I meet with the Council regularly and their officers told us that tenants would be informed by letter of the changes and that landlords would be copied in on this letter. To-date this has not happened.
08 UKLANDLORD JANUARY/FEBRUARY 2012
The reality is that whereas the end of 2011 I received £350 per calendar month to let a self-contained one-bedroomed property to an LHA tenant, I will only receive £232 per calendar month (pcm) which will be the shared room rate in the area. I can just about cope with the 30th percentile caps to the earlier £365/pcm rate although we live in a climate of inflation at over 5 per cent, but this particular change will affect 3 of my properties and I literally cannot afford to take a 33 per cent reduction. My tenants will not be able to pay the
difference, utility bills are going up and if they are able to get employment, this often does not last long as jobs are for short-term periods in this area. In this current climate of unemployment, particularly in the area of Scotland where my properties are based, young people are trying desperately hard to get work. One of my tenants was lucky enough to get a position in the cafeteria of a local hospital and was then made redundant because there were so many elderly volunteer workers who could do her job for nothing! I am not looking forward to serving notice to
FEATURE: WELFARE REFORMS STARTING UP
REGULATORY
quit on my tenants. The social implications of this change are enormous. My tenants are basically young men. Some of them have been living in my flats for 5 years and they have managed to get their own furniture and equipment together and make a permanent place to live which they consider to be their homes. They are now losing their homes through no real fault of their own. My properties have good central heating, and double glazing. It is not certain there will be sufficient reasonable quality shared accommodation in the marketplace. If they move in to hostels, sharing rooms, things will be very different for them.” NLA Member (name supplied), Scotland “I have around 70 properties in Scotland let to tenants in receipt of Local Housing Allowance. Of these, 5 of my tenants are currently receiving the one-bedroom allowance. The new changes will mean I have a short fall of £30 per calendar month. I have discussed the changes with these tenants, and they have said they will make up the difference. I will
PROPERTY
TENANCY
not increase their rents for the next two years. However, they are worried for their future as this places stress on their lives. I have built up long-term relationships with all of my tenants and they usually stay for years as my properties become their homes. I expect in the future I will opt to let my properties to working people who are not reliant on Local Housing Allowance. The new rules will not provide any incentive for landlords to take on tenants in receipt of benefits – the LHA is paid one month in arrears and there is usually no deposit, and now there will be no premium on the rent to factor in these disadvantages. The way things are going for LHA, it does not work well for people who want to take on parttime work as it traps people on benefits. I imagine the Government’s plan to uprate LHA against Consumer Price Index rather than Retail Price Index will work in the mediumterm. However if actual local rents move up too much and the LHA tenant cannot afford
SAFETY
FINANCE
to make up the short fall (for example, if it is over £50 per month) this will cause a housing issue.” NLA Member (name supplied), Scotland “One of the most rewarding aspects of being a landlord is to provide affordable housing to LHA tenants who cannot get a property in public sector housing. I own around 40 properties mainly based in the Portsmouth area and some houses in Kent, Southampton and Gosport. The main obstacle we are faced with presently is the capping of the LHA rate. We have a young person now having to find a large increase in top-up for his flat because he will be reduced onto the shared room rate. I very much sympathise with his predicament but we are a business and if he cannot afford the rent, he will have to relocate losing the privacy and independence that he has become accustomed to.” Dave Heard, NLA Member, England. n
UKLANDLORD JANUARY/FEBRUARY 2012 09
FEATURE – THE UK LANDLORD INTERVIEW STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
The UK Landlord Interview: John Bird Twenty years after founding the Big Issue, John Bird has emerged as an unlikely champion for the private-rented sector. Having experienced homelessness himself, and in his time played the legal system as a selfconfessed nightmare tenant, John is a passionate believer in the role of private landlords in helping to solve the country’s growing housing crisis. Throughout his time at the Big Issue, John has seen governments of every political hue come and go, from Conservative to Labour and now to an unexpected Coalition administration. The main message that he delivers from his experience with all of them? That government legislation for the housing sector often results, whatever the good intentions, in a market that penalises the poor, the honest, and the hard working. Much of that conviction goes back to John’s own childhood in the then slums of Notting Hill, and to his youth as a tenant. Both the slumlords of London in the 1950s, and the dishonest tenants of the 1960s, bore stark witness to the law of unintended consequences, with landlords such as Peter Rachman and tenants like John himself simply gaming an ill thought-out and poorly planned housing system. It’s a message that John says needs to be heard again and again. “You have to be very careful with government intervention,” he argues. “In the 1950s slumlords were only possible because of misguided government policy, while now policies such as prioritising immigrants when allocating social housing can result in racism.” He is particularly concerned by the current Government’s move to have housing benefits and other welfare payments paid directly to tenants, rather than landlords. “It’s lunacy,” he says. “It’s a paternalistic policy that is only going to drive landlords out of the market. When it’s been tested, rent arrears went up to 70 per cent, literally overnight. I know the Government wants people to grow up and take responsibility for themselves, but the reality of the long-term unemployed isn’t like that. It will drive people out of private letting.”
10 UKLANDLORD JANUARY/FEBRUARY 2012
PRS under threat This is only the latest of a long line in government regulations that have time and time again placed the PRS under threat. John recalls his time as a tenant in the 1960s, when it was possible to effectively not pay rent for nine months while hapless landlords pursued legal proceedings. “The 1965 Rent Act led to a flight out of private letting, as tenants smashed up properties and refused to pay rent,” he remembers. “A law that was there to protect the interests of tenants had the unintended consequences of putting enormous pressure on social housing.” That legislation led to a sharp decline in the PRS, only to be reversed by the introduction of the sixmonth Assured Shorthold Tenancy agreement, which of course reactivated the market but at the expense of security for tenants. John strongly believes that private renting needs to form a much greater part of the British rental market, and that it is harmful to society to ghettoise the homeless and the long-term unemployed into social housing. “I am a great believer that there should not be two separate lots of housing, one for the middle class and one for the dispossessed and disadvantaged,” he explains. “I don’t support blanket social housing for people in need – there needs to be a mix, and the private sector has a big part to play. Council housing can be a dead end for social mobility.” John pays tribute to those landlords who put their peace of mind at risk by often taking on tenants “who have no bona fides, and few credentials.” “It is the ethical, well-behaved private landlords who are going to save our bacon in this housing
shortage,” he says. “As a country we are going to rely more on good landlords who care for their properties and build stable relationships with their tenants.” Reforms a concern John is a well-known figure in the higher reaches of housing policy, using his influence to involve politicians in keeping the homeless in the big picture. He has invited Housing Minister Grant Shapps to be the guest editor of an upcoming Big Issue. “I have asked him to come up with some answers,” John says. “Grant Shapps seems quite determined to look for creative solutions for the housing market.” Not a partisan or party-political creature, John voices concerns about the possible impact of the changes to shared room rate regulations – he argues that policymakers have not fully thought through what they are asking of single people in the age group affected. He believes that the secret to a less dysfunctional rental market lies in striking longterm partnerships between local authorities,
private landlords and housing providers such as associations. “Private landlords shouldn’t be used just in an emergency, or as an A&E department that can take on people for six months,” he says. “We need a seamless, equitable relationship between local authorities, housing associations, and private landlords.” “Local authorities need to carry out social audits of their areas, so that they know where there are gaps that need filling,” he adds. “That leads to shared resources, and shared responsibility. People shouldn’t be dumped on the PRS for six months – we need partnerships and a localism approach, to take the pressure off local authority housing and social housing.” John believes the Government’s localism agenda can work to promote reputable landlords, provided local authorities use their existing enforcement powers to tackle rogue landlords. “For the few rogue landlords in the community, local pressure should be enough to raise standards – we don’t need more legislation.” Given his time as a rough sleeper, John has a very unique and valuable perspective on
what it means to be a landlord in the private sector, which he believes provides an important and often unappreciated service to the wider community. “Landlords have to make a profit, and there is no point being in housing if you cannot make a profit, but ultimately all landlords fulfil a social purpose,” he says. “There is no such thing as an unsocial landlord, and if landlords act effectively, they can push up the value of the community and help make it a safe and happy place to live.” n
It is the ethical, wellbehaved private landlords who are going to save our bacon in this housing shortage.” John Bird, founder of the Big Issue
Click on to The Big Issue World The Big Issue is launching a new digital page turner – The Big Issue World. This monthly online publication will include a selection of articles from the latest Big Issue paper magazine as well as thought-provoking articles, interviews and reviews from around the world partly prepared by Big Issue vendors who want to move onto editorial work. For more information, see www.bigissue.com
UKLANDLORD JANUARY/FEBRUARY 2012 11
NLA ACCREDITATION INTERVIEWS
Why NLA Accreditation works Landlord Accreditation is becoming increasingly important to landlords, tenants and local authorities operating in the privaterented sector. We find out here about how the NLA Accredited Landlord scheme has helped a landlord who lets his properties to students and why landlord accreditation matters to Hart District Council.
NLA Accredited Landlord: Promoting good relations between landlord and tenant
Visit our website www.landlords.org.uk and click on the accreditation area or contact our Local Government and accreditation officer at: siobhan.cannon@landlords.org.uk
Jan McLoughlin, Private Housing, Hart District Council “We actively encourage landlords in our area to become accredited. We were one of the first councils to come on board to the NLA Accreditation Scheme after it had been a pilot project. We are not only interested in the rental property and its condition; we feel it is just as important to look at the way landlords manage their properties as this anyway will have an impact on the quality of the property. Although landlord accreditation is not a condition for working with us at Hart as landlords, we now hold meetings for accredited landlords only, where they can talk about their needs and raise any specific concerns. A key benefit for us from landlord accreditation is that an accredited landlord cannot plead ignorance. At the same time, by being involved in the NLA Accreditation Scheme (and some of our staff have attended the foundation course), our people are learning to speak “Landlord!” Landlords often accuse councils of not making enough effort to understand landlords, and NLA Accreditation shows that we are listening to the landlord community. I am also a landlord and am accredited. It’s very important that landlords are aware of the legislation and know where they can get advice. At the council we use the NLA Online Library and the NLA Telephone Advice Line. The NLA Accreditation Scheme has a complaints system which has been activated a couple of times so far. On one occasion we had an accredited landlord who had entered a tenant’s property without their consent and we resolved that situation with all parties. Another time we worked with the police and the NLA to vouch for an accredited landlord who has worked with us for many years who rents to the tough end of the
12 UKLANDLORD JANUARY/FEBRUARY 2012
market – drug users and former addicts – and, again, the situation was resolved. We have about 145 landlords on the council database and 92 landlords have been accredited via NLA Accreditation. I have had calls from other councils who are interested in the scheme. We’ve explained to them that it’s not just another hurdle for landlords to jump, but a valuable way of raising standards in the sector and establishing a conversation between landlords and local authorities. We are planning to hold another one-day accreditation course for local landlords at the end of March. It’s important to note that the fee for joining the NLA is tax deductible! We encourage landlords to attend the day course rather than the online option; by doing the
course in person, you can share experiences with other landlords and learn from other people’s mistakes. It’s also a good networking opportunity.”
Accredited Landlord: Brian Balchin
“I rent to students in the Reading area, and use the University to find my tenants. The University recognises that an accredited landlord understands what is required of them. It’s a way of ensuring competence and professionalism. I attained my accreditation by participating in the one-day NLA Landlord Foundation course, as well attending a
number of seminars. I have been accredited for about a year now, and have also taken some of the NLA library courses as a way of keeping up to date with what is going on in the sector. The NLA’s Accreditation scheme gives landlords a much better perspective of what it means to be a landlord. Although I have never had to serve notice on a tenant and I am not involved with Local Housing Allowance issues, accreditation gives you a big picture view of how the private-rented sector works and prepares you for any eventualities. Having the Certificate of Accreditation, I have a better all-round idea of the responsibilities of being a landlord, and I am sure the University values that.”
UKLANDLORD JANUARY/FEBRUARY 2012 13
LANDLORD PROPERTY MANAGEMENT INFORMATION This section is intended to provide assistance to landlords throughout the life-cycle of buying, renovating, letting and selling a property. It also contains practical and technical information aimed to help landlords maintain their properties effectively and in compliance with the law. STARTING UP
REGULATORY
PROPERTY
TENANCY
Buying & Selling
FINANCE
Finance & Tax
Squatting criminalised, at last The Ministry of Justice has confirmed that it plans to criminalise squatting in residential properties by introducing a new criminal offence for England and Wales. The new offence will be committed where a person is in a residential building as a trespasser having entered it as a trespasser, knows or ought to know that he or she is a trespasser and is living in the building or intends to live there for any period. Crispin Blunt, Parliamentary Under-Secretary of State for Justice, said “the offence will provide greater protection in circumstances where the harm caused is the greatest – squatting in someone’s home. This behaviour is unacceptable and must be stopped.”The Ministry said that an offence criminalising the act of squatting in itself, rather than a failure to leave a property on request, would provide a more powerful deterrent to would-be squatters. However, the offence will not cover tenants, lodgers or anyone else who occupies
SAFETY
HMRC cracks down on stamp duty avoidance
a residential building with the blessing of the property owner but subsequently has a disagreement with the landlord. For example, a rent defaulter or a tenant who stays in the property after the end of a fixed term tenancy is not a squatter for the purposes of this offence. These sorts of disputes will continue to be resolved using established eviction processes. The
Government did consider whether legitimate tenants should be given protection from landlords who maliciously accuse them of being squatters and concluded that such an offence is not necessary as a landlord can already be prosecuted for perverting the course of justice – an offence with a tough maximum penalty – in these circumstances. n
HM Revenue & Customs is looking to collect unpaid stamp duty of £35m after a surge in the number of companies offering ‘stamp duty tax planning’ deals that HMRC believes could amount to avoidance. These companies, often operating almost entirely on the Internet, charge a commission that can be up to half the rate of stamp duty payable. By establishing a corporate vehicle to buy the property and then sell it back to the individual, these schemes say they can avoid stamp duty liability. Another common ploy is to pay separately for chattels (fixtures and fittings) so keeping the property price below the stamp duty thresholds. HMRC says that “the schemes rely on an interpretation of law that produces an outcome different from that envisaged when the law was enacted, and that HMRC does not accept.”
Planning Calls to ease office-to-home conversions The British Property Federation has urged ministers to press ahead with planning changes that would make it easier to convert vacant offices into new homes. Responding to reports that the policy was to be watered down, the BPF underlined its support for greater flexibility in the planning system, whether it is brought about in secondary legislation or through the Government’s National Planning Policy
14 UKLANDLORD JANUARY/FEBRUARY 2012
Framework. It stated that prolonging the current situation – where vacant commercial premises are unable to be easily converted to play their part in addressing the nation’s housing crisis – would be unacceptable. Liz Peace, Chief Executive of the British Property Federation, said: “What is crucial is that we have a proactive regime in place for considering and allowing change of use that does not seek to simply maintain the status quo.” n
The tax authority is currently investigating 1,200 people it believes have underpaid tax, and plans to mount a legal challenge to the schemes. UK Landlord understands that HMRC is paying particular attention to purchases made just below the stamp duty threshold. n
UKLANDLORD JANUARY/FEBRUARY 2012 15
LANDLORD PROPERTY MANAGEMENT INFORMATION STARTING UP
REGULATORY
PROPERTY
TENANCY
Finance & Tax
areas it was £1,484. Council tax was £688 in 1997-98. This means council tax has risen over one hundred per cent - or an extra £751 a year on a Band D home. Since all other Bands are set as a percentage of Band D, homes in every band have seen their bills double. The new Localism Act gives the public the right to veto excessive council tax rises. Councils that set council tax increases above a ceiling approved by Parliament each year would automatically trigger a referendum of all registered local electors in their area. Planned removal of exemptions and discounts The Department for Communities
and Local Government CLG is examining key changes to Council Tax. It is considering removing Class A and Class C exemptions for property empty for refurbishment or empty and substantially unfurnished. According to NLA Policy Officer David Cox, “In practical terms this will remove the default 6month exemption for unfurnished property and replace it with local authority discretion to apply a discount of between 0 and 100 per cent.” David also told UK Landlord that CLG is consider the removal of the 10-50 per cent discount for furnished empty property / second homes. Instead, there would be local authority discretion to discount from 0-50 per cent. n
Affluent taskforce for properties abroad A new 200-strong team of investigators and specialists from HMRC has been formed to identify, what it calls “wealthy tax cheats with overseas property.” The team is using risk assessment techniques to identify areas where wealthy individuals are avoiding and evading taxes and duties. One of the first groups being targeted is wealthy individuals who own land and property abroad. Sophisticated data mining techniques have been applied to publicly available information to identify individuals who own property abroad. HMRC risk assessment tools are then being used to highlight those people who do not
16 UKLANDLORD JANUARY/FEBRUARY 2012
FINANCE
Pre-Budget positioning
Council tax to be frozen again The Government has set out plans for a second year’s council tax freeze, by setting aside an extra £805m, of which up to £675m will be available to local authorities in England to help keep council tax down. This new support builds on the 2011-12 freeze offer taken up by all councils, boosting what they could get over four years to £3.3bn if they hold council tax for a second year. The new scheme would mean that local taxpayers living in an average Band D home in England could once again save up to £72 compared to a 5 per cent rise in council tax on top of this year’s council tax saving of up to £72. The new voluntary scheme will be open to the same councils as last year. Councils that freeze or reduce their council tax next year will get a one-off grant equivalent to raising their council tax by 2.5 per cent. Council tax bills hit £1,439 on Band D in England in 2010-11. This year, 2011-12, the average Band D bill set by local authorities remained at £1,439. In London it was £1,308; in metropolitan areas it was £1,399; and in shire
SAFETY
appear able legitimately to afford the property, as well as those who do not appear to be declaring the correct income and gains from the property. Other work currently planned involves targeting people holding offshore accounts. n
The NLA was disappointed by the Autumn 2011 Statement by the Chancellor of the Exchequer, George Osborne. Following hot on the heels of CLG’s Housing Strategy which acknowledged that “demand for rental housing likely to continue to rise”, Mr Osborne reiterated the Coalition’s commitment to encouraging investment in housing but stopped short of announcing any new policy, initiatives or incentive to providers of housing. Key points included: • The Office for Budgetary Responsibility (OBR) does not currently predict a return to recession conditions • Growth projections revised to; 0.9% (2011), 0.7% (2012), 2.1% (2013), 2.7% (2014), 3% (2015 & 2016) • Public sector pay increases to be limited to 1% for the next two years • In work benefits to be uprated by 5.2% from April 2012 • Pension Age increase (to 67) brought forward to 2026 • Credit easing to help small businesses i.e. Government will use favourable inter-government interest rates to off-set commercial lending rates for firms with a turnover of less than £50m. This is predicted to reduce interest rates for small business loans by approx. 1% • No plans to introduce a Tobin tax • The introduction of Income Tax relief of 50% for those investing £100,000 in a qualifying new start-up business and relief from CGT for the invested funds where applicable • A freeze of the Capital Gains Tax exempt amount for 12 months • Business rates holiday for small businesses extended to April 2013. Unfortunately, despite the presence of small business interests at the heart of Government policy, landlords appear to have been excluded from these measures once again. NLA Chairman David Salusbury said: “The Government has pledged to support small businesses and encourage new investment with its Autumn Statement, but has missed a key opportunity to promote investment in affordable housing to rent by failing to extend the policy of income-tax relief to include landlords ready to invest in new residential property.” n
LANDLORD PROPERTY MANAGEMENT INFORMATION STARTING UP
REGULATORY
PROPERTY
TENANCY
Selective Licensing Newham Council considers compulsory licensing The NLA has warned Newham Council in East London that its plans to introduce a blanket compulsory licensing scheme across the entire borough is the “wrong answer to the issues the Council hopes to address.” Newham is undertaking a consultation exercise examining the possibility of introducing the compulsory licensing of all private landlords in the borough. If given the go-ahead, Newham would be the first borough in the country to do this. If the scheme goes ahead, landlords will have to undergo a Criminal Record Bureau check as a condition of licensing. At a specially convened NLA Branch meeting in November – which was packed with landlords concerned at these proposed measures – Newham Mayor Sir Robin Wales said: “We will never accept private sector tenants being directly exploited by landlords who force them to live in dangerous and unacceptable conditions.” The council apparently sees this allencompassing licensing approach as a means to ensure well managed properties meeting good
FINANCE
Finding Tenants How to end a bugs life
living standards. It also believes the licensing will deal with crime and anti-social behaviour. Richard Lambert, NLA CEO, presented to the meeting the case against these proposals outlining what the NLA believes will be the potential impact for landlords across the borough. NLA chairman David Salusbury said “In this time of housing shortage, local authorities should
be supporting landlords to provide good quality accommodation, not imposing unnecessary extra regulation on those who already comply with the rules. We believe that it will only add to the red tape and costs that landlords already face. Local authorities have adequate powers to tackle rogue operators. Licensing will only make the business of letting more difficult." n
Finding Tenants Helping services personnel find homes Housing Minister Grant Shapps (pictured) has set out plans to ensure that each of the UK’s service men and women get the housing help they need. The Minister made a key pledge to services personnel to pull out all the stops to give them the support they need, whether buying their first home or applying for social housing. The package of housing help includes: help for first-time
SAFETY
buyers, visits by housing experts to military bases, and moving up local waiting lists for social homes. Mr Shapps said “years of loyal military service should not be rewarded with years of languishing on local waiting lists...councils will need to do the same, to ensure that heroes who want a home in their area will be at the top of local waiting lists.” n
18 UKLANDLORD JANUARY/FEBRUARY 2012
Bedbugs are an unpleasant pest that feed on human blood and can leave bites all over a human body, especially around exposed areas such as the face, neck, upper torso, arms and hands. There are basic measures a landlord can take to eliminate any infestation, says Steve Low of Rational Pest Control. The procedure is based on finding the hiding places of the bed bugs, and then killing them. The places to check for live bed bugs or shells are around mattresses, cracks in the bed frame and head board, under chairs, couches, beds, and dust covers, between cushions, under rugs and around the edges of carpets, as well as in drawers and around window and door casings. You can even find them in cracks in plaster and in telephones, radios and clocks. Once bed bugs have been found in a property, you will need to advise tenants to wash all clothes in a hot wash and vacuum the rooms thoroughly, including the mattress and bed frame, to hoover up any bugs and eggs. If you are doing the insecticide treatment yourself, Rational Pest Control recommends using gloves and a mask and says “be generous with your spray but don’t soak.” As well as the mattress, bed frame, and areas around chairs, cushions, curtains and rugs, you will also need to treat any luggage that has been used in the last six months, as this could be the cause of infestation. After spraying, it will be 3-4 hours until everything in the room is dry. All this needs to be repeated 14 days after the first treatment, if tenants are still being bitten. Getting rid of bedbugs is not easy and if this has been unsuccessful, Steve recommends contacting your nearest British Pest Control Association approved professional pest control service. n
LANDLORD PROPERTY MANAGEMENT INFORMATION STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
Finding Tenants Crisis selects new PRS access schemes The NLA is continuing to work closely with Crisis to help vulnerable people in the community make a success of private renting, and escape from homelessness. The NLA has recently helped select schemes across the country that will place the vulnerable into the Private-Rented Sector. Crisis was awarded £10m over three years by the Government to deliver the Private-Rented Sector Access Development Programme, which helps to fund PRS access schemes and help those at risk. Crisis also provides training and advice to those that receive the funding and the involvement of the NLA has enabled the programme to tap into local landlord networks.
Together with Crisis, the NLA has joined the Department for Communities and Local Government, Homeless Link and the Ministry of Justice on a panel to decide which schemes received funding. The panel has now selected 74 new schemes (from 210 applications) which will benefit those at risk of homelessness in their local area. These are geographically spread from Cornwall in the South West to Middlesbrough in the North East. As a result, it is expected that well over 2,000 people will receive help in finding and keeping a tenancy over the next year. From the tenant’s side the PRS access scheme will ensure that the property is of a
good standard and that they receive the support necessary to make the tenancy a success. Landlords are reassured that tenants have been properly assessed and prepared for renting privately, that the tenancy is being supported and that there is someone that they can call if issues do arise. The first round of schemes started back in February 2011 and have already helped over 800 people into private-rented accommodation, with over 95 per cent of those tenancies still on-going. n For more information, see www.privaterentedsector.org.uk
Tenant checks at record level A recent survey by the NLA revealed that nearly three-quarters of landlords who sought possession of their property experienced rent arrears. The NLA is reminding landlords to carry out background checks on potential tenants before letting their properties. The NLA advises all landlords to carry out checks to confirm a tenant’s identity, and ensure that there is no apparent reason why they could not keep up with the rent. Landlords in record numbers are now using the NLA Tenant Check service. Through the necessary searches, NLA Tenant Check found that approximately one in twenty tenants processed had one or more County Court Judgments (CCJ) against them at an
undisclosed previous address during the first half of 2011. A basic check with NLA Tenant Check will include a County Court Judgement search, address history, an ID check and alias name search, along with a bankruptcy or insolvency inquiry. A full tenant check will include references from their employer and previous landlord, bank account details and an assessment of a tenant’s ability to pay the rent. The NLA advises: “Getting a proper background check done on all tenants before they move into a property is one of the most important things a landlord can do before handing over the keys. It is vital landlords find out basic information about their prospective
tenant to help avoid rent arrears or other problems further down the track. This gives the landlord peace of mind that their properties are in good hands and will hopefully mark the start of a satisfactory and hassle-free tenancy.” n
For more information, see www.landlords.org.uk/tenantcheck
Local Housing Allowance High Court rejects housing benefit action The High Court has rejected a claim by the Child Poverty Action Group that the Government’s housing benefit cuts do not comply with equality legislation as they would have a disproportionate impact on minority groups, and that the
cuts exceed the powers of the Secretary of State for Work and Pensions. Mr Justice Supperstone ruled that there was nothing in the legislation that prevented the Secretary of State from introducing maximum caps, and
20 UKLANDLORD JANUARY/FEBRUARY 2012
there was no express requirement for housing benefit to be set at a level that fully covered any given claimant’s actual housing costs. Iain Duncan Smith, the Secretary of State, said “the cost of housing benefit has spiralled completely out of control, and this
judgement is further vindication that our reforms will ensure support is in place for those who need it, but stop the crazy excesses we have seen in recent years of people on benefits living in houses that those in work could not afford.” n
UKLANDLORD NOVEMBER/DECEMBER 2011 23
LANDLORD PROPERTY MANAGEMENT INFORMATION STARTING UP
REGULATORY
PROPERTY
TENANCY
FINANCE
Repairs and Maintenance
Local Housing Allowance Housing Benefit cap to hit hard A survey by the NLA has found that Government caps on housing benefit payments could force over three quarters of landlords out of the Local Housing Allowance (LHA) market. The survey found 77 per cent of landlords who have LHA tenants are either considering or already taking steps to reduce their involvement in the LHA market. One quarter of respondents say they are already reducing the number of tenants they have on housing benefit payments, while half plan to do so in the future. The changes see benefits based on the 30th percentile of local average market rents, rather than the previous 50th percentile. The caps limit the maximum benefit available based on the property size. NLA research has found the LHA cuts will have a varied impact on families across the country,
SAFETY
Preventing frozen pipes
with some losing hundreds of pounds. Government figures show nearly 1.3 million households currently claim LHA across the UK. David Salusbury, NLA Chairman, said “the shortage of housing across the UK is putting even greater pressure on the privaterented sector. Capping housing benefit payments at this time will only lead to more people struggling to pay their rent. The
Government must monitor the impact of the roll out of LHA caps. It is essential that tenants are not left at risk and that landlords can continue to provide this accommodation for the more vulnerable in society. The number of people claiming benefits continues to rise, and these caps could result in fewer affordable rental properties for benefit claimants.” n
Audit Commission targets social housing fraud The Audit Commission disclosed in November that England’s councils have succeeded in detecting £185 million worth of fraud in 2010/11, an improvement of 37 per cent on last year’s figure of £135 million. The country’s only annual survey of detected frauds against councils shows that 121,000 scams were detected in 2010/11, including false
22 UKLANDLORD JANUARY/FEBRUARY 2012
benefit claims, council tax discount cheating, and unlawful use of social housing. The report shows that there are more detected Housing Benefit and Council Tax Benefit frauds than any other type. In the last year they comprised over half of all fraud detected by councils. In the last three years councils have detected almost 210,000 cases of benefit frauds worth more than £310 million. Housing tenancy fraud is the use of social housing by someone not entitled to occupy it. At its worst, fraudsters sub-let for profit. Councils have increased the number of properties recovered by 75 per cent in the last three years. The vast majority of these are in London. Over half of councils outside London with housing stock failed to recover a single property. There are nearly four million social housing properties in England. In 2010 almost two million families were waiting for council houses, with temporary housing for homeless families costing nearly £1 billion a year. n
As the cold weather sets in, it is worth reminding your tenants how to manage the heating system in their rented property and, if necessary, how to shut off the water to prevent any damage caused by frozen pipes. Tenants should be shown how central heating systems work and where the gas boiler is located, along with where the emergency gas shut off valve is. Make sure your tenants know to set the heating system thermostat to prevent it from freezing. n
New guide to subsidence The Royal Institution of Chartered Surveyors (RICS) has launched new guidance to assist its members in identifying the causes of building cracks and how potential subsidence insurance claims should be processed. The appearance of cracking in a building may lead to suspicions of subsidence and, consequentially, potential claims under a property owner’s insurance policy. However, crack damage can be caused by a variety of factors. On average, fewer than 40 per cent of subsidence insurance claims turn out to be valid as many referenced problems are caused by factors other than foundation movement. “Subsidence is a significant issue for the property industry, with more than 30,000 claims annually at a cost of over £150m,” according to RICS. Damage that is often seen as being linked to foundation movement is frequently caused by other factors, such as problems with thermal movement, cavity wall tie failure, lightning or even minor earthquakes.” n
LANDLORD PROPERTY MANAGEMENT INFORMATION STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
Sustainability Saving energy this winter There’s nothing like the chill of a British winter to concentrate minds on energy saving and energy efficiency measures. This winter, the NLA has been encouraging landlords to think about making energy improvements to their properties. Making a property more energy efficient provides benefits for tenants who will be warmer, and paying reduced energy bills. A higher energy efficiency rating, which is measured by an Energy Performance Certificate (EPC), may also benefit the landlord by making a house more attractive to prospective tenants. With the Government’s Green Deal on the horizon later on in the year, the NLA is keen for landlords to start bringing in energy efficiency measures as soon as possible to their properties. A recent survey by the NLA found that over two thirds of landlords would consider taking advantage of the Green Deal. While the Government will offer plenty of carrots to
encourage take up of greater energy efficiency in the private-rented sector, it has made it clear that failure to implement adequate measures will lead to mandatory legislation for the sector. Ways to improve a property’s energy efficiency include: installing loft insulation to a minimum depth of 270mm to stop heat loss through the ceiling; cavity wall and floor insulation to stop heat escaping where possible; fitting lagging to hot water pipes and tanks to significantly reduce heat loss and stop pipes
from freezing; and draft-proofing the property, by filling gaps between floorboards and skirting boards. The Landlord Energy Savings Allowance enables landlords to deduct tax paid on rental income to a maximum of £1,500 per property when they make specified energy efficiency improvements. For more information about this scheme, look at the Energy Efficiency section in the Property Category of the NLA Online Library, www. landlords.org.uk. n
Tenancy Deposits Tenancy Deposits Increase The average protected tenancy deposit in England and Wales has increased by £125 in the past year, from £985 to £1110, according to mydeposits.co.uk. Landlords and agents in London take the biggest deposits from tenants when letting property, while the average deposit size was smallest in the Yorkshire and Humber. Since tenancy deposit protection was
24 UKLANDLORD JANUARY/FEBRUARY 2012
introduced in April 2007, tenants in London have paid an average of £1495 as a deposit for their rented property, which is more than double the amount in many other parts of the country. By comparison, tenants in the south-west pay £702 while those in Yorkshire and Humber pay an average of £568. In the south-east, the average deposit for a property
is £1069, while in Wales it is £747. Eddie Hooker, Chief Executive of my|deposits.co.uk, said “with rents continuing to rise, landlords and agents are understandably taking larger deposits to help protect their investments, with the average now at £1110, an increase of £125 in the past year.” n
NLA NEWS – NLA NATIONAL CONFERENCE 2011 STARTING UP
REGULATORY
PROPERTY
For the latest news visit: www.landlords.org.uk NEWS
SAFETY
FINANCE
NLA National Conference 2011 The NLA’s fourth national conference in Manchester in November proved to be an upbeat and informative day, with landlords from across the country getting to know each other better and enjoying a wide range of presentations from senior policy makers and expert speakers. “Without the support and interaction of NLA landlords, it wouldn’t have been possible to have this enjoyable and informative day,” NLA Chairman David Salusbury said at the closing session. By bringing this year’s event to Manchester, the NLA continued with its efforts to bring together landlords from different areas around the country to discuss the issues of the day and the challenges and opportunities they face. This year, in response to the positive feedback from previous events, there was more emphasis on the break-out sessions, which provided landlords with valuable advice on the ins and outs of running a letting business. In the main conference sessions, the Green Deal, the Welfare Reforms and the controversial use by local authorities of their powers to restrict planning permission for shared housing, were among the hot topics discussed by delegates and speakers. Richard Lambert, the new Chief Executive Officer of the NLA, said that he was particularly concerned that “planning legislation is now pushing down on the supply of shared housing, just as changes in the housing benefit system are creating more demand.”
A view from Government One of the highlights of the opening session was a presentation by Terrie Alafat, Director of Housing Growth and Affordable Housing at the Department for Communities and Local Government, which clearly showed that the NLA’s concerns are receiving close attention right at the heart of housing policy. In her overview of policy making for the PRS, Terrie Alafat said that this is “the first time I have seen housing take such a central place at all levels of government...housing is at the top
Terrie Afalat, Department of Communities and Local Government
of the agenda, and the Private-Rented Sector is in the middle of that – we are not just talking about home ownership.” As Ms Alafat said, the Private-Rented Sector (PRS) has grown to 3.4 million households in England, up 30 per cent from 2005, and now covers 16 per cent of the population. It has become a crucial part of the economy and of British society, and politicians are now responding to its requirements. In particular, it was extremely encouraging to hear Ms Alafat talk about the Government’s non-regulatory approach to the PRS; “the Government wants to create an environment for growth and improvement In the PRS, but not through regulation.... the feeling in Government is not that local authorities need new powers to take actions, it is more about making sure that local authorities target the right places with their actions.” She told participants that the Localism Bill (now Act) contains no new regulations for the PRS. Ms Alafat said that what it does do is clarify the Tenancy Deposit Protection legislation, and in direct response to lobbying from the sector, the Government has decided to extend the deadlines for registering tenancy
UKLANDLORD JANUARY/FEBRUARY 2012 25
NLA NEWS – NLA NATIONAL CONFERENCE 2011 STARTING UP
REGULATORY
deposits with the government-approved schemes from 14 to 30 days. The new Localism Act will also allow courts to have more discretion when imposing financial penalties for non-compliance with tenancy deposit protection schemes. The new Localism Act is also considered to demonstrate the Government’s confidence in the PRS, as it opens up the possibility for local authorities to house the homeless in the PRS. According to Ms Alafat, the Government has assumed this non-regulatory approach precisely because it wants to encourage higher levels of investment in the PRS. This comes in addition to encouraging greater investment in the sector through changes announced in the March 2011 Budget to Stamp Duty Land Tax (SDLT) on bulk purchases. Even in the thorny and topical area of landlords and their reputations, Ms Alafat argued that it is up to self-certification and accreditation schemes run by the PRS itself, rather than government action, to improve the public view of landlords. She also noted that the Green Deal will be a way for the sector to improve its reputation by raising quality and standards in housing – currently 41 per cent of the PRS fails to meet decent home standards, whereas 90 per cent of social housing is compliant with these standards. “The media portrayal of the PRS is not what we would like it to be, but higher rents will be positive by financing improvements to properties,” Ms Alafat concluded. “These are challenging times, but there are new opportunities for the sector from increased growth, and we are ready to work with you to see what we can deliver.”
Preparing for the Green Deal One of the most informative presentations at the Conference came from Emma Bulmer, a Team Leader working on Green Deal Demand at the Department for Energy and Climate Change. Ms Bulmer provided a wide-ranging overview of how the Green Deal, the framework for which kicks in this Autumn, will serve as a new mechanism to encourage home energy efficiency improvements – all financed by savings on energy bills paid by tenants. Referring to Secretary of State for Energy and Climate Change Chris Huhne who has said “we use more energy to heat our homes than Sweden, where it’s seven degrees colder in January... we might as well be standing outside burning 50 pound notes,” Ms Bulmer reminded the audience that residential accommodation accounts for a quarter of all carbon emissions in the UK, and 56 per cent of the energy that they consume goes to space heating.”
26 UKLANDLORD JANUARY/FEBRUARY 2012
PROPERTY
For the latest news visit: www.landlords.org.uk NEWS
SAFETY
FINANCE
L-R Frank Lahiffe (Irish Property Owners Association), Emmanuelle Causse (UIPI), Stratos Paradias (UIPI), David Salusbury (NLA) and Richard Lambert (NLA).
“The PRS has the largest number of least energy efficient properties, so you could argue it has the most to gain from the Green Deal,” Ms Bulmer told NLA Conference participants. The Green Deal establishes a market-driven framework, in which a customer receives a package of energy efficiency measures at no up-front cost from a ‘Green Deal provider’. The cost of the measures is paid back over the long term (for example, 25 years) through energy bill savings In practice, the first stage of the process for landlords will be an impartial in-home assessment of a property, which will then result in a number of proposals for improving the energy efficiency of the house using the Green Deal mechanism. The recommendations for measures will be specific to the property, but could include installation of loft and cavity wall insulation, draft proofing, under-floor heating and energy efficient glazing and doors.At this stage, the Green Deal provider may then come to a financial agreement with the customer. This is not a conventional loan; rather the bill payer, i.e. the tenant, repays the cost of the energy efficiency measures as a separate line in their energy bill, over a period of up to 25 years. The market, not the Government, will determine the price and the interest rates, Ms Bulmer stressed. The ‘golden rule’ is the principle that the total charge to be repaid should not exceed the
Emma Bulmer, Department of Energy and Climate Change
estimated savings on the bill, that result from the energy efficiency improvements. In the Q&A session, Ms Bulmer succinctly addressed questions relating in particular to how landlords will in practice implement the Green Deal. She confirmed that sitting tenants, as the current energy bill payer, will need to give their consent before the Green Deal charge can be added to their energy bill, unless of course landlords use void periods to implement the measures. She also confirmed that landlords will not be liable for any energy bills if a tenant defaults, and that there should be no problem for landlords or tenants to change electricity providers after Green Deal measures have been implemented. A working party has been set up to look into Green Deal options for old and listed buildings. Ms Bulmer stressed that the Green Deal stays with the property, throughout any changes in tenants, and even if the landlord chooses to sell the property; any Green Deal charges will be disclosed in the Energy Performance Certificate This being a Government initiative, there is of course a stick to go with the carrot: from 2016, tenants will be able to ask and not be unreasonably refused consent to make energy efficiency improvements, and from 2018 minimum energy efficiency standards are expected to be set at ‘E’. Landlords will be unable to rent out their property unless they have reached this standard or they have carried out the maximum package of measures under the Green Deal and Energy Company Obligation. But Ms Bulmer said that landlords should take advantage of any void periods, particularly before any obligation kicks in: “the Government is committed to ensuring there are no overall costs to landlords as a result of the PRS regulations... with the Green Deal, you can get energy efficiency improvements for no upfront costs, with the tenant making the repayments through their energy bill savings.” Just do it sooner rather than later! n
>>Break Out Sessions >> Housing Benefit cap to hit hard One of the most popular breakout sessions at this year’s National Conference was a presentation by Marion Money on understanding tenants. Marion (pictured) is an NLA trainer and is the NLA’s Representative for Kent. Marion reminded everyone that tenants are, of course, the most important element of any property investment, and for this reason it makes good business sense for landlords to make the effort to establish a practical working relationship with their tenants. This dialogue is essential when things go wrong, which is increasingly common in today’s difficult economic environment. What you want is for your tenant to let you know in advance that he or she is likely to face problems paying the rent, rather than find out once the arrears start to build up. Marion pointed out that where a tenant falls into arrears, possession proceedings should be the last resort as these can cost landlords
dearly in terms of the time of the legal process, as well as in lost rent – proceedings create a void, and the arrears are not repaid. Rather than initiating legal action to evict a tenant who loses their job, it can be in the landlord’s interest to direct tenants to explore using the housing benefit system, and if tenants are already on benefits then to enlist the help of the local authority as much as possible.
In the opposite scenario, Marion reminded all landlords that when a tenant hands in notice, while this can present an opportunity to market the property with higher rents, in line with the market, you should first ask yourself whether you want to try and keep the tenant you know, and if so, how to resolve the situation so as to maintain the tenancy. Marion strongly recommended robust checks of new tenants to ensure they can afford the rent. “Although there may be a possibility of achieving higher rents, ‘tenant turn around’ can cost money in terms of refurbishment costs, voids, re-letting expenses and the uncertainty of whether or not a new occupier of your property will be a good tenant.” A keen supporter of Credit Unions, Marion talked about the benefits that Credit Unions can bring to tenants on benefits in areas such as saving for deposits, standing orders for utility bills and ring-fencing Local Housing Allowance. n
>>Possession proceedings For those landlords unfortunate enough to have to embark on possession proceedings, and those planning ahead for what will be an economically tough year for many tenants, NLA Trainer Jamie Fraser (pictured) who works as an Adviser with the NLA Advice Line, gave a well-received overview on the differences between Section 21 Notices and Section 8 Notices.Section 21 Notices, he explained, are a no fault way to end an Assured Shorthold Tenancy, and the judge must grant a possession order if correctly served. For their part, landlords must give two months’ notice to tenants. If a tenant does not leave, then landlords must apply to the County Court for a Possession Order, for only possession and costs, and then wait for a ruling; if the tenant still does not move out, a bailiff must be
used to evict the tenant, with the appropriate Warrant to Evict. In total, Jamie estimated that from the moment of serving a Section 21 to the eventual eviction of an uncooperative tenant, a period of 20 weeks may elapse. For Section 8 Notices, Jamie explained that less time may be needed, as these are used only if a tenant breaches the terms of the tenancy. Grounds for a Section 8 include two months’ rent owed (Ground 8), some rent was lawfully due from the tenant when possession proceedings begun (Ground 10) or the tenant was persistently being late when paying rent (Ground 11). After only 14 days, if a tenant does not leave the property, landlords can apply for a Possession Order and pursue possession, rent and costs. n
>> Financial ambition Kent-based landlord and entrepreneur Rick Walton gave lively and inspiring presentations on creative ways of investing in residential property. Rick has built up an extensive and diverse portfolio of properties, ranging from relatively low risk,
low return Buy to Lets, to HMO investments. He also helps other landlords towards successful investment strategies by regular exchange of information about latest techniques and rules and through building up a network of valuable contacts.
For Rick, the secret to success in the PRS is creativity in financing, using all the options available in the market, such as setting up joint ventures to make the most of group expertise and access finance more easily. Rick reminded participants
at his breakout sessions that, whatever our motivation, the position of a landlord who is passionate about their business can be as financially rewarding as it is challenging and exciting. n
UKLANDLORD JANUARY/FEBRUARY 2012 27
NLA NEWS – NLA NATIONAL CONFERENCE 2011 STARTING UP
REGULATORY
PROPERTY
For the latest news visit: www.landlords.org.uk NEWS
SAFETY
FINANCE
>>Break Out Sessions >> Welfare Reforms loom The welfare reforms announced by Government are poised to have a major impact on the PRS, particularly those landlords who work with housing benefit tenants. In total, there are some 5 million people who receive some form of housing benefit across the UK. Bill Irvine (pictured) of the specialist consultancy HB Advice and Consultancy explained that 30 per cent of housing benefit recipients were tenants of private sector landlords. Bill provided an in-depth overview of the welfare reforms, which are designed to streamline and simplify the system and reduce fraud and error. The Universal Credit will replace the jobseekers’ allowance, income support, housing benefit and Local Housing Allowance, amongst others. Although the details of the reform are still being developed, tenants under pensionable
age will have their weekly Universal Credit capped at £350 per week for a single person, and £500 for a couple with no dependents, inclusive of housing costs. LHA rates will be calculated using the 30th percentile of local market rents. The Government is resisting attempts to have direct payments made to landlords, and Bill Irvine expects a dramatic increase in the cost of collection and debt recovery, as well as an increased number of legal actions and possessions. “Government has underestimated the scale and complexity of the changes required,” he said. In January 2012, landlords will start to see the first impact of these welfare reforms, when the current age threshold for application of the shared room rate for single people will extend from 25 to 35. This will mean that single people under the age of 35 who are claiming housing benefits will not be eligible
to claim for housing benefit in respect of self-contained accommodation and will only be eligible for a lower, shared room rate. Bill put his finger on the pulse when he expressed his concern that just this one change “could well force many landlords, faced with the potential of further significant drops in their rental revenue, to stop offering accommodation to prospective LHA tenants aged under 35.”n
>> Capital growth Continuing with the financial theme, Richard Bowser, the editor of Property Investor News magazine, provided an illuminating insight into how landlords can maximise the overall return from their rental properties. Richard said that, in an typical case, a residential investorlandlord with borrowing of 75 per cent loan to value borrowing could gain an average return on investment over the next nine years of around 16 per cent per annum on a 4-property portfolio acquired now and then re-assessed in 2020, assuming a 4 per cent average annual rise in house prices, in addition to any accrued surpluses from rentals. But although a 16 per cent return is clearly well ahead of the stock market, Richard then argued that by applying a smarter and more active portfolio strategy, landlords could raise these returns significantly. Richard emphasised that landlords should focus on having properties with strong cash-flow, and to invest in quality rather than quantity - ten properties with consistently healthy returns, rather than 50 units with poor rental cash flow. And as well as considering the rental income that can be generated, Richard said that investors should also look closely at the resale value of their properties, and at ways to increase that value 28 UKLANDLORD JANUARY/FEBRUARY 2012
from refinancing, from potential conversions and from use of any spare land.While rental yields may be rising, Richard stressed that investors could do more to ensure future capital growth prospects, with auction sales prices currently down to around 2003 levels in some UK regions. “You can build up a good level of equity, if you buy at the right price, in the right locations, and then add genuine value,” Richard concluded. “Landlords need to re-assess their portfolio each year, maybe selling one property and buying another, always improving the quality of their assets.” n
>> Taxing times Stephen Fay, of Fylde tax accountants, and himself a property investor since 1999, gave an engaging overview of the life cycle of a property investor from a tax perspective, right the way through from the tax aspects of raising finance to inheritance tax issues.Stephen made it very clear to members that at all stages of this life cycle, tax decisions can play a crucial part in the success of a BTL investment.He paid particular attention to the ownership structure of a BTL business, which is of great interest to NLA members – under what circumstances does it make sense to implement a company structure, and when is it more advantageous to keep rental income on a personal tax statement? As Stephen said, the answers to these questions depend not only on each lettings business, but on the personal circumstances of each owner. But in general terms, as landlords’ businesses expand, the tax efficiency of a company structure becomes increasingly compelling, he noted. n
NLA NEWS – NLA NATIONAL CONFERENCE 2011 STARTING UP
REGULATORY
PROPERTY
For the latest news visit: www.landlords.org.uk NEWS
SAFETY
FINANCE
>>Break Out Sessions >> Scotland: a land of opportunity? Gerry McDougall (pictured), the NLA’s Representative for Fife & Dundee, spoke to delegates at the Conference about some of the differences in running a lettings business north of the Border. Gerry made clear the divergences between the Scottish and English legal systems when buying property, and explained the different terminology used – in Scotland, missives are used rather than contracts – and the variations in tenancy agreements. She also noted the different system and procedures used for evicting tenants. One of the main differences in Scotland is that Landlord Registration is compulsory, with registration administered by
each local authority area. Not only that, but as from this year, all advertising for tenants must include the landlord’s registration number. And perhaps surprisingly, given Scotland’s long banking tradition, Gerry pointed out that one of the main differences between the two markets is that it can be hard to find finance in Scotland, as there is a smaller pool of lenders. For those landlords interested in investing in buy-to-let properties in Scotland, Gerry recommended buying houses rather than flats, although of course this depends on each area, and proper due diligence remains essential. Gerry noted that 2012 will see the start of operations of
the country’s controversial Tenancy Deposit Protection scheme. For more information on the latest details of how this scheme will work, see guidance by the NLA Advice Line on page 59.n
email bookings@landlords.org.uk or visit the website at www.landlords.org.uk/conference if you would like to receive details of next year’s conference when it becomes available
NLA NEWS
For the latest news visit: www.landlords.org.uk
NLA AGM 2011 The NLA’s 2011 AGM took place on 18th November 2011 at the Royal Pharmaceutical Society, in London SE1. The following decisions were taken at the meeting: The NLA’s Annual Report and Accounts for the period ended 30 April 2011 were adopted. Cobley Desborough were re-appointed as reporting accountants of the NLA until the next AGM. Richard Lambert (pictured), the NLA’s
recently appointed CEO was elected as a Director to the NLA’s Board, as were Anthony Richard and Carolyn Uphill. Richard Price was re-elected as a Director. A Special Resolution was adopted, with the support of more than 75 per cent voting of those voting in person or by proxy. This Resolution was designed to bring the NLA’s Articles up-to-date, by making use of the Model
Articles suggested by the 2006 Companies Act. These Articles are designed to be simpler to understand so as to reduce ambiguity and the chances of disputes (and costly legal fees) caused by misunderstandings. A proposal that all directors be elected to serve 3-year fixed terms so that they, and prospective directors, can plan their commitments accordingly was also adopted. n
Your role in housing policy! It is no exaggeration to say that the NLA Quarterly Survey of landlords is one of the leading sources of information about the private-rented sector for government, policy makers and the media. The Survey provides comprehensive detail about the conditions that landlords are finding on the ground and
their expectations for the future. As such, the Survey plays a key role in informing housing policy in the UK and in keeping the concerns of landlords at the forefront of the increasingly passionate housing debate in this country. The NLA is calling on more landlords
to participate in the survey. The survey is carried out independently, by researchers BDRC Continental Limited, and has been reduced in length so it now takes less than 10 minutes to complete. The more landlords who contribute, the louder their voice will be. n
Any NLA member who would like to take part should email policy@landlords.org.uk to opt in to the survey
UKLANDLORD JANUARY/FEBRUARY 2012 29
30 UKLANDLORD JANUARY/FEBRUARY 2012
REGIONS NEWS STARTING UP
Regular Local Business and Investment News REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
LHA payments to landlords in Kent Kent Savers Credit Union is trialling a new initiative to ring fence Local Housing Allowance payments to ensure that private landlords in Kent have the confidence to offer properties to tenants in receipt of Local Housing Allowance. Aware of the problems of growing and substantial arrears to landlords from letting their properties to tenants in receipt of Local Housing Allowance, Kent Savers, with the backing of Maidstone, Medway, Swale, Tunbridge Wells and Sevenoaks councils and Kent Housing Group are developing the new account to run as an intermediary between tenants and landlords. Given the shortage of housing available to local authorities, and the high rents in the region, the local authorities want to try innovative schemes to avoid local private-rented sector landlords choosing not to offer properties to tenants in receipt of Local Housing Allowance. Adam Fagg of Kent Savers told UK Landlord that the scheme that is being trialled is simple: a prospective tenant who is receiving Local Housing Allowance and looking to rent a property from a private landlord will be told that one of the conditions for the tenancy is for the tenant to open a Budget Account with Kent Savers. The Budget Account will be in the tenant’s name and the tenant will then become a member of Kent Savers, and be eligible to apply for other savings and loan products. Tenants will be able to set up an account if they can verify their address and satisfy an identity check. Once the account is open, the tenant agrees for the Local Housing Allowance (LHA) payments to be ring fenced. The payments are then transferred to the landlord’s designated account. “Clearly, we cannot guarantee the money will be paid to the landlord if the LHA has
not reached the account from the local authority. However, we will notify the landlord if the LHA payment has not credited the Budget Account.” Tenants need to provide 30 days’ notice to close the account, and the landlord notified of any closure request. Landlords who set up this scheme with their tenants commit to paying £5 per month for each tenant. “As we are a ‘not for profit’ organisation, this fee is to run the administration of the scheme,” Adam explains. Towards Universal Credit Set up in March 2010, Kent Savers is the fastest-growing Credit Union in the country and is rapidly managing to present itself as one of the most innovative. The pilot will run for nine months and the target will be to have 600 tenants with Budget Accounts from across the five local authorities. Kent Savers hopes that it will extend to additional types of account to support financial budgeting of individuals in receipt of welfare benefits. “Universal Credit is the big shadow on the horizon, and we hope to launch a full budget account so that people can pay their bills and save up for
deposits, etc.,” says Adam. The NLA has played a significant role in developing the scheme to the pilot trial stage. “Kent Savers would also like to extend our thanks to Marion Money of the NLA in particular for the continued support of the Budget Account project,” Adam stressed to UK Landlord.
There has been positive feedback from landlords and tenants to the concept of the scheme which is based on the successful model run by Coastal Credit Union based in Bournemouth. The scheme is currently only available in respect of properties located in any of the five local authorities that are piloting the scheme. It is hoped that eventually the scheme will go county wide. n
For more information, see www.kentsavers.co.uk
UKLANDLORD JANUARY/FEBRUARY 2012 31
EVENTS GUIDE
January 2012-April 2012
For an up-to-date list visit: www.landlords.org.uk/events
Please note this is a listing of pre-planned events. Additional events will be added to UK Landlord and the website throughout the year. Agenda topics are normally finalised and published on www.landlords.org.uk/events about 4 weeks in advance of meetings. Reminder emails will also be sent to members in relevant areas so please do check with our membership team (020 7840 8937) that we have your current email address. To receive email notifications of NLA events please ensure we have your up-to-date email address recorded and that you have added National.Landlords.Association@cmp.dotmailer.co.uk to your safe Non NLA event senders list and/or address book. DATE
EVENT
REGION
LOCATION
TIME
Mon 9 Jan
NLA Northampton Branch Meeting
East Midlands
Hunsbury Hill Centre, Harksome Hill, Danes Camp Way, Northampton, NN4 9QX
6.00pm for 6.30pm start
Mon 9 Jan
Croydon’s Private Sector Housing Forum
London
Croydon Town Hall, Katharine Street, Croydon, CR0 1NX
3.45pm
Wed 11 Jan
Launch of NLA Cheltenham & Gloucester Branch Meeting
South West
Holiday Inn, Crest Way, Barnwood, Gloucester, GL4 3RX
7.00pm to 9.00pm
Mon 16 Jan
NLA Sheffield Branch Meeting
Yorkshire and the Humber
Sheffield Park Hotel, Chesterfield Road South, Sheffield, South Yorkshire, S8 8BW
6.30pm for 7.00pm start to 9.30pm
Tue 17 Jan
NLA Weymouth Branch Meeting
South West
Weymouth Working Men’s Club, 1 Mitchell Street, Weymouth, Dorset DT4 8BT
7.00pm for 7.30pm start
Tue 17 Jan
NLA Teesside Branch Meeting
North East
These meetings will now take place on the third Tuesday of each odd month. Check the NLA website for more details.
Thu 19 Jan
Lambeth Private Sector Housing Forum
London
40-46 Stockwell Road, Stockwell, London SW9 9ES Tel: 020 7501 9795
NOW CANCELLED
Tue 24 Jan
NLA and Richmond Borough Council Landlords Meeting
London
York House, Terrace Room, Richmond Road, Twickenham, TW1 3AA
6.00pm to 8.30pm
Wed 25 Jan
NLA Wessex (Bath) Branch Meeting
South West
Lansdown Golf Club, Lansdown, Bath BA1 9BT
2.00pm
Thu 26 Jan
NLA Reading Branch Meeting
South East
Best Western Reading Moat House, Loddon Suite, Mill Lane, Sindlesham, Nr Wokingham, Berkshire, RG41 5DF
7.00pm for 7.30pm start
Thu 26 Jan
NLA Dorset Branch Meeting
South West
The Queen Hotel and Spa, Meyrick Road, Bournemouth BH1 3DL
7.00pm for 7.30pm start
Thu 26 Jan
NLA London Seminar at the Institute of Directors
London
Institute of Directors, The Burton Room, 116 Pall Mall, London, SW1Y 5ED
7.30pm
Thu 26 Jan
NLA High Wycombe Branch Meeting
South East
Holiday Inn High Wycombe, Carrington Suite, M40 Junction 4, Handy Cross, High Wycombe, Bucks, HP11 1TL
7.00pm to 9.00pm
Mon 30 Jan
NLA Aberdeen Branch Meeting Scotland
Thistle Aberdeen Altens, Albyn Suite, Souterhead Road, Aberdeen AB12 3LF
7.00pm to 9.00pm
late Jan
NLA South London Branch
London
Dulwich
Wed 1 Feb
NLA Wessex (Bristol) Branch Meeting
South West
BAWA, 589 Southmead Road, Filton, Bristol, BS34 7RG
7.00pm
Wed 1 Feb
NLA North London Landlords Branch Meeting
London
Southgate Masonic Centre, 88 High Street, Southgate, London, N14 6EB, Tel:020 8882 3074
6.30pm
Tue 7 Feb
NLA Fife Branch Meeting
Scotland
The Gilvenbank Hotel, Huntsman Road, Glenrothes, Fife, KY7 6NT
7.00pm
Tue 7 Feb
NLA Cumbria Branch Meeting
North West
University of Cumbria, Room LG101, Fusehill Street, Cumbria, CA1 2HH
7.00pm
Wed 8 Feb
NLA Guildford Branch Meeting
South East
Guildford Council Chambers, Millmead House, Millmead, Guildford, GU2 4BB
6.30pm for 7.00pm start
Thu 16 Feb
Launch of NLA Market Harborough Branch Meeting
East Midlands
Best Western, The Three Swans Hotel, High Street, Market Harborough, Leicestershire, LE16 7NJ
1.00pm to 4.00pm and repeated 5.00pm to 8.00pm
Thu 16 Feb
NLA Vale of Glamorgan Branch Meeting
Wales
The Hub, Barry YMCA, Court Road, Barry, CF63 4EE
6.00pm
32 UKLANDLORD JANUARY/FEBRUARY 2012
EVENTS GUIDE
January 2012-April 2012
For an up-to-date list visit: www.landlords.org.uk/events
DATE
EVENT
REGION
LOCATION
TIME
Wed 22 Feb
NLA Branch Meeting for
London
check NLA website for details.
North West
The Waterside Hotel, Manchester Road, Didsbury, Manchester,
6.30pm for 7.00pm
M20 5WZ Tel 01614 450225 (ample parking to the rear)
start to 9.00pm
Landlords in Bexley, Bromley and Greenwich Thu 23 Feb
NLA Manchester Branch Meeting
Wed 29 Feb
NLA Exeter Branch Meeting
South West
Mercure Southgate Hotel, Southernhay East, Exeter EX1 1QF
6.00pm for 6.30pm start to 8.30pm
Tue 6 Mar Mon 12 Mar
NLA Bolton Branch Meeting
North West
Brittania Bolton, Beaumont Road, Bolton, BL3 4TA
6.30pm
NLA Shropshire Branch
West Midlands
Shire Hall, Abbey Foregate, Shrewsbury, SY2 6ND
5.30pm for
Meeting in partnership with
6.00pm start
Shropshire Council Tue 13 Mar
NLA North East Branch
North East
Meeting
Novotel Newcastle, Queen Elizabeth Suite, Ponteland Road,
6.30pm
Kenton, Newcastle Upon Tyne, NE3 3HZ
refreshments for 7.00pm start
Tue 13 Mar
NLA Branch Meeting in
Wales
partnership with Conway
The Council Chamber at Bodlondeb Council Offices, Conwy.
5.00pm for
LL32 8DU
5.30pm start
County Borough Council Tue 13 Mar
to 8.00pm
NLA Edinburgh Branch Meeting Scotland
Apex International Hotel, Sydney Room, 31-35 Grassmarket,
7.00pm
Edinburgh, EH1 2HS, Tel: 0131 300 3456 Mon 19 Mar
NLA Trafford and Salford
North West
Branch Meeting
Premier Inn, Manchester,Old Trafford, Waters Reach,
6.00pm free
Trafford Park, M17 IWS
refreshments 6.30pm start
Tue 20 Mar
NLA in conjunction with
South East
Canterbury Student Housing
Canterbury University, Darwin Conference Suite, Darwin College,
5.30pm for 6.00pm
Darwin Road, Canterbury, CT2 7NY
start to 9.00pm
Weymouth Working Men’s Club, 1 Mitchell Street, Weymouth,
7.00pm for
Dorset DT4 8BT
for 7.30pm start
Landlord Information Evening Tue 20 Mar
NLA Weymouth Branch
South West
Meeting Tue 20 Mar
NLA Teesside Branch Meeting
North East
These meetings will now take place on the third Tuesday of each odd month. Check the NLA website for more details.
Thu 22 Mar
NLA Dorset Branch Meeting
South West
Borough of Poole, Civic Centre, Poole, BH15 2RU
7.30pm
Mon 16 Apr
NLA Sheffield Branch Meeting
Yorkshire and the Humber
Sheffield Park Hotel, Chesterfield Road South, Sheffield, South
6.30pm for 7.00pm
Yorkshire, S8 8BW
start to 9.30pm
Wed 18 Apr
Thu 19 Apr
NLA Eastbourne & Wealden
Lansdowne Hotel, King Edward’s Parade (Eastbourne Seafront),
6.30pm
Branch Meeting
East Sussex BN21 4EE
to 9.00pm
NLA Hastings & Rother Branch South East
The Manor Barn, Bexhill-on-sea, East Sussex, TN40 2HA
9.30am to 1.30pm
North East
White Swan Hotel, Princess Street, Halifax HX1 1TS
6.30pm for 7.00pm
Yorkshire and the Humber
Carr House Centre, Danum Road, Doncaster, DN4 5HF
South East
Council Chamber Dartford Borough Council, Civic Centre,
5.00pm to
Home Cardens Dartford DA1
7.15pm
South East
Meeting
STOP PRESS EXTRA DATES! Tues 24th Jan
NLA Calderdale Branch Meeting
Thurs 26th Jan
NLA and Doncaster Landlord
start 2.00pm to 5.00pm
Forum Thurs 26th Jan
Thurs 9th Feb
Dartford Landlords Forum
West Kent Landlords Forum
South East
The Camden Centre, Victoria Suite, Market Square, Royal Victoria 6.30pm -7.00pm Place, Royal Tunbridge Wells, Kent TN1 2SW
For Registration/ Refreshments. 9.00pm close
UKLANDLORD JANUARY/FEBRUARY 2012 33
REGIONAL FOCUS STARTING UP
South East Investment Focus REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
Key Statistics for The South East Population (June 2010): 8.5 million
9
8
Unemployment rate (Nov 2010): 6.3 per cent Average house price (Q3 2011): £282,821 Detached: £454,676 Semi-detached: £255,491 Terrace: £208,272 Flat: £165,890
Proportion of private-rented property (2009-2010): 15.9 per cent Long-term privately-owned empty homes (April 2010): 33,523 Sources: Office for National Statistics, Land Registry, English Housing Survey, Halifax Empty Homes in England survey.
7 1
4 6 3 5
2
NLA REPRESENTATION 1. Kent 2. East Sussex 3. West Sussex
4. Surrey (see page 36) 5. Isle of Wight 6. Hampshire
Local Representatives
Marion Money,
NLA Representative for Kent
Responsible for developing relationships with the twelve local authorities in Kent and with Medway, a unitary authority. Marion is a board member of the Kent Housing Group, which includes the Chief Kent and Medway Housing Officers, Vice Chair of the Private Sector Landlord sub group, and a member of the Medway Strategic Housing Partnership. Marion also organises events in Kent for landlords. Portfolio: a mixture of properties and a mixture of tenures in the North Kent Area. Local investment opportunities: Investment in infrastructure for High Speed rail links to London and the continent, airports and cruise terminals together with a £4bn investment in wind farms have made Kent an attractive investment area. “Whilst this has led to more jobs in the region, house prices are said to be 14
times the average local salary. This has led to an exceptionally buoyant lettings market from professional workers and European immigrants alike. The market for tenants on Housing Benefit is robust and in some areas there has been a gradual upwards creep over the last few months with LHA rates set at the 30th percentile beginning to match last year’s rates set at the 50th percentile. There is strong demand for accommodation from students attending the four universities in the region, although this trend is difficult to forecast as the universities are investing in their own accommodation, the forthcoming rise in student fees together with the prospect of Article 4 directions in Canterbury.” Landlord events: Marion is planning a range of landlord events in 2012, including business meetings, small focus groups and forums, across Kent and Medway, culminating in the Annual West Kent Fair in October.
Contact: marion.money@landlords.org.uk if you have suggestions for meetings in this area.
34 UKLANDLORD JANUARY/FEBRUARY 2012
7. Berkshire 8. Oxfordshire 9. Buckinghamshire
REGIONAL FOCUS STARTING UP
The South East REGULATORY
Tony Richard,
PROPERTY
TENANCY
SAFETY
FINANCE
NLA Representative for East Sussex
Responsible for developing relationships with local authorities in East Sussex. Portfolio: 19 properties, mainly residential houses and flats. Mostly in Bexhill, a few in Hastings. Local investment opportunities: “Much of the Hastings area is LHA dependant and the town is soon to be subject to a borough-wide Article 4 Direction which will limit HMO provision. An Additional Licensing Scheme is in operation across much of the town, which complicates investment planning and imposes additional operational costs. Bexhill has strong demand and less
LHA-funded tenants. I have had nothing other than consistently good results investing in this area. Small 2 and 3-bedroomed terrace houses rent well, have a far lower churn rate than flats and are easier to sell should the need arise.” Landlord events: NLA Hastings hosted a useful meeting last year where local MP Amber Rudd discussed landlords’ concerns with members. “Local landlords were reassured by the NLA’s determination to get their voice heard where it counts.” The NLA co-ordinates a total of 16 meetings each year across East Sussex, in Brighton, Eastbourne and Hastings.
Contact: tony.richard@landlords.org.uk if you have suggestions for meetings in this area.
Susan Bryer,
NLA Representative for West Sussex
Responsible for developing relationships with local authorities in West Sussex and organising local landlord events. Portfolio: a varied and busy portfolio in West Sussex and the South West. Local Investment opportunities: “In the area of West Sussex rents have risen steadily in response to demand. A two-bed flat now commands between £650 and £750 in rent and there are
a lot of tenants looking for quality accommodation. Investment opportunities are very much available for the astute landlord investor.” Landlord events: A new cycle of NLA meetings in West Sussex is planned for late January/ early February in Crawley, Chichester and Worthing.
Contact: susan.bryer@landlords.org.uk if you have suggestions for meetings in this area.
Mark Richardson,
NLA Representative for Hampshire
Responsible for developing relationships with all 14 local authorities in Hampshire and the Isle of Wight. Portfolio: A mix of student, multi-let and LHA tenanted properties predominantly in the Southampton Area. Local Investment opportunities: As the current economic turmoil continues to bite, Hampshire is fairing better than many other areas of the country and rental demand remains high. The student market is strong. Landlords who are willing to offer
quality accommodation to students are seeing great returns and low voids. However, with the Article 4 directive already in force in Portsmouth and due to come in to effect on the 23rd March 2012 in Southampton the shared housing market will become tougher for landlords going forward. Landlord events: We will be running events in Basingstoke, Portsmouth and Southampton during 2012 to continue the good work of Ken Staunton.
Contact: mark.richardson@landlords.org.uk if you have suggestions for meetings in this area.
David Kybett,
NLA Representative for Oxfordshire, Berkshire & Buckinghamshire
Responsible for developing relationships with local authorities in Berkshire, Buckinghamshire and Oxfordshire and organising local landlord events and meetings in Slough, Reading, High Wycombe and Oxford. Portfolio: properties in West London and South Oxfordshire.
Local investment opportunities: For the area that I cover my main piece of advice, particularly in Oxford, would be to keep a keen eye on any existing or future plans for additional licencing and Article 4 directions which should always be referenced against planning policy.
Contact: david.kybett@landlords.org.uk if you have suggestions for meetings in this area.
UKLANDLORD JANUARY/FEBRUARY 2012 35
REGIONS NEWS STARTING UP
Regular Local Business and Investment News REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
HMRC targets North West and Wales landlords HM Revenue and Customs has announced the launch of a new taskforce to tackle tax evasion by landlords in the North West and North Wales. The taskforce will target landlords – owning or renting three or more properties – evading their tax responsibilities in North West and North Wales. Landlords who deliberately seek to evade tax face not only a heavy fine, but
possibly a criminal prosecution as well. HMRC describes its taskforces as specialist teams that undertake intensive bursts of compliance activity in specific high risk trade sectors and locations across the UK. The taskforces have been set up following the Government’s spending review of investment to tackle tax evasion, avoidance and fraud. HMRC will roll out further taskforces this year. n
Saving lives with sprinklers Marion Money, NLA Representative for Kent, has been working with Kent Fire and Rescue Service to communicate the benefits of installing domestic fire sprinkler systems in residential accommodation. Marion invited a group of local landlords to a demonstration by Kent Fire and Rescue where two fires were deliberately started to demonstrate the benefits of installing a sprinkler system. Fire fighters built two structures to simulate the room and contents of a typical home. Each room contained standard furnishings, window fittings and a working smoke alarm. Only one of the rooms contained a sprinkler system. The ‘live burn’ showed that the first room – without sprinklers – filled with smoke within moments, while the second room suffered only minimal damage before the sprinkler activated, extinguishing the flames and preventing further fire spread.
Marion told UK Landlord: “We took away with us a lasting impression of the speed of smoke damage in an unchecked fire compared with the almost instant extinguishing of a fire contained by sprinklers.” The Fire Service says that the water damage from sprinklers is minimal. Typically the Fire Service can use anything from 100 to 1,000 times more water to put out a fire than is delivered by a sprinkler head. Sprinkler heads are set off individually by the heat of the fire and only the head/s directly affected by the fire are triggered to go off in a fire. In the UK, there has never been a single death by fire in a sprinklerprotected building. Residential fire sprinklers are not expensive, costing typically £1 per square foot in new homes or about £1,500 for a three-bedroom house. This is less than two per cent of the cost of an average new house.n
New NLA branches open During Autumn 2011 NLA Representatives launched 12 new branches: New Branch
Contact NLA Representative
NLA Bexley
Lucy.Regan@landlords.org.uk
NLA Boston
Raj.Beri@landlords.org.uk
NLA Bradford
Fiaz.Rashid@landlords.org.uk
NLA Conwy
Julie.Woolfenden@landlords.org.uk
NLA Dundee
Gerry.McDougal@landlords.org.uk
NLA Grimsby
Lynda.Bowen@landlords.org.uk
NLA Huddersfield
Fiaz.Rashid@landlords.org.uk
NLA Newton Abbot
Claire.Heale@landlords.org.uk
NLA Peterhead
Lorraine.Young@landlords.org.uk
NLA Redbridge
Richard.Blanco@landlords.org.uk
NLA Southgate
Phil.McGriskin@landlords.org.uk
NLA Trafford
Garry.Heil@landlords.org.uk
>>STOP PRESS>>STOP PRESS>>STOP PRESS>>
New NLA Representative for Surrey Just as this issue of UK Landlord goes to print, a new NLA Representative for Surrey has been appointed. Rowan Carstairs is now responsible for building relationships with local authorities in Surrey and will now run the Guildford and Woking branches, as well as setting up another one or two branches in the area. You can contact Rowan using Rowan.Carstairs@landlords.org.uk n
>>STOP PRESS>>STOP PRESS>>STOP PRESS>>
36 UKLANDLORD JANUARY/FEBRUARY 2012
NLA LANDLORD DEVELOPMENT
For the latest news visit: www.landlords.org.uk
Portable Appliance Testing for Landlords This course is designed for landlords wishing to learn how to carry out safety checks themselves on the electrical appliances they provide for their tenants. Testing equipment will be available for delegates to gain practical experience and the trainer can explain all that is necessary in the domestic situation.
Price: £155 (including VAT) for members and £185 (including VAT) for non-members. To reserve a place: Charlotte Clements on 020 7840 8920 or bookings@landlords.org.uk
2012 DATES
LOCATION
Tuesday, 31st January
South London
Tuesday, 21st February Tuesday, 28th February
Birmingham Newcastle
Wednesday, 29th February
Northampton
Monday, 12th March
North London
ALL TIMES: 8.45am for 9.00am start; 5.00pm finish
Landlord Foundation Courses The NLA runs one-day courses designed to help both new and experienced landlords to develop their professional skills. The course focuses on the main issues facing landlords, including: • • • • •
Price: Members £95 (including VAT), non-members £125 (including VAT) To reserve a place: Charlotte Clements on 020 7840 8920 or bookings@landlords.org.uk
fi nding tenants setting up managing and ending a tenancy keeping records repairing obligations
Specialist Courses To reserve a place: Charlotte Clements on 020 7840 8920 or bookings@landlords.org.uk
Possession One-day course on Possession, with practical workshops on filling in the forms and notices: Price: Members: £95 (inc VAT) Non-members: £125 (inc VAT) 2012 DATES
LOCATION
Wed 15th Feb
Brighton
Mon 20th Feb
Sheffield
Mon 5th Mar
Leeds
Mon 12th Mar
Manchester
TIME: 8.30 for a 9.00am start; 5.00pm finish
Local Housing Allowance & Deposits, Damages & Disputes Half-day course on Deposits, Damages and Disputes, incorporating Inventories and how to deal with disagreements: Price: Members: £55 (inc VAT) Non-members: £75 (inc VAT) Half-day course on Local Housing Allowance, what to beLOCATION wary of and how the system can work for you: Price: Members: £55 (inc VAT) Non-members: £75 (inc VAT)
The programme offers an excellent opportunity to network with other landlords and discuss face-to-face ideas, problems and possible solutions. 2012 DATES
LOCATION
Wednesday, 25th January
North Tyneside
Thursday, 2nd February Tuesday, 7th February
Liverpool Leeds
Tuesday, 14th February
North London
Wednesday, 15th February
Birmingham
Tuesday, 28th February
Manchester
Wednesday, 29th February
South London
ALL TIMES: 9.00am for 9.30am start; 5.00pm finish
2012 DATES
LOCATION
Thur 22nd Mar
Brighton
Local Housing Allowance: 8.30am for 9.00am start; 12.20pm finish Deposits, Damages & Disputes: 1.30pm for a 2pm start; 5.20pm finish
The 2 half-day courses on LHA and Deposits, Damages & Disputes can be followed on the same day. Price: Members: £95 (inc VAT) Non-members: £125 (inc VAT)
UKLANDLORD JANUARY/FEBRUARY 2012 37 39
NLA PRIORITIES FOR 2012 STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
Richard Lambert: NLA priorities for 2012 Richard Lambert joined the NLA as Chief Executive Officer in October 2011. He had been Chief Executive of the British Woodworking Federation (BWF) for nine years and prior to this Policy Director at the British Property Federation (BPF). As the NLA starts the New Year, he sets out his priorities for the organisation and for the private-rented sector. standards, supporting our members, engaging constructively with policymakers locally and nationally. The PRS needs to increase its capacity to offer the flexible and accessible housing that Britain needs in the 21st century.
UKL: What were the main messages you took home from the NLA Conference and how do you plan to act on these? RL: First, the Government is finally thinking about housing, and thinking holistically. Terrie Alafat gave the most positive view of the PRS I’ve ever heard from a civil servant. Second, we can use the Ministers’ instincts against regulating as an opportunity to prove that market mechanisms and self-regulation are more effective, and that we can work constructively with the authorities. Third, there are some fantastic initiatives springing up at local level. We should support these and help spread them across the country.
UKL: What do you think are the main strengths of the NLA, and what areas do you want to improve? UK Landlord: What do you think are the main challenges facing the private-rented sector? Richard Lambert: The single biggest challenge remains the popular image of private renting. While it persists, the public will believe the worst and politicians will listen to calls for tougher regulation. Many acknowledge this is not the whole story, but it’s still their focus, and some of the more specific issues we tackle stem from this perception. I think there’s a tectonic shift happening in housing in this country. It’s a tremendous
38 UKLANDLORD JANUARY/FEBRUARY 2012
opportunity for the PRS to show it can offer solutions to the current housing shortage in the form of good quality, well-managed homes that people want to live in.
UKL: What role do you want the NLA to play in meeting these challenges? RL: We must make a positive case. The NLA is the largest landlord organisation in the country, and we should accept the responsibility of being the sector’s strongest, most forceful advocate. To be credible, we have to be seen to be driving improvements in
RL: The NLA’s direct support to members, through the Advice Line and the support, guidance and education on the website, is tremendous. It’s the core of what we offer, and we need to add to it constantly. I’m also impressed by the solid foundation of research and evidence underpinning the NLA’s public policy work. I believe the great under-used strength of the NLA is its regional network, which has expanded more than threefold since 2009, but hasn’t been given the direction or support it needs to be truly effective. The NLA needs to be a national organisation that works at a local level.
UKL: What do you plan to do at the NLA to improve the reputation of landlords?
UKL: How do you think your time at the BWF and the BPF prepared you for the challenge of running the NLA?
RL: We have to foster a realisation of the reality of renting now. Part of that is finding examples of good landlords, as well as happy tenants, to counter-balance the stories of the rogues. We should build on our work in helping landlords acquire the skills and knowledge to manage their lettings businesses, properly and professionally, for the benefit of their customers and for themselves. Longer-term, I believe we ought to aspire towards expecting all our members to work towards becoming accredited.
RL: Working in and running membership organisations helped me understand how they work and what members want from them. I can see the strategic potential in an organisation, and my track record at the BWF shows that I can develop and grow it.
UKL: What initiatives are you planning to increase the membership of the NLA? RL: My main objective is to retain the members we have by making sure they feel they are getting the full value and benefit from their membership – and that they are as involved as they want to be. If we can satisfy those who are already paying a subscription, we will certainly attract new members.
UKL: What are your key policy concerns as CEO of the NLA? How will you make sure that policymakers listen to the voice of the PRS? RL: I’ve already mentioned that housing generally will become a central political issue. More specifically, I see local initiatives, such as Selective Licensing and Article 4 Directions, coming to the fore as the localism agenda develops. The Green Deal presents a major opportunity for landlords to upgrade the energy efficiency of their properties. And we still have to see the full impact of welfare reform. Policymakers listen to those they think are reasonable, credible and who show that they understand the wider political context. My job is easier because the NLA already has this reputation.
UKL: Finally, what are the three main items on your to-do list for 2012? RL: 1. Make the regional network central to the NLA 2. Retain and recruit more members 3. Ensure that we have the structures and systems in place to achieve this.
I believe we ought to aspire towards expecting all our members to work towards becoming accredited Richard Lambert, Chief Executive Officer, NLA
UKLANDLORD JANUARY/FEBRUARY 2012 39
PUBLIC AFFAIRS
Public Affairs Diary Chris Norris, NLA Policy Manager STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
A resounding Happy New Year from the NLA Policy Team! Hopefully the festive season has provided sufficient time to recharge those landlording batteries and prepare for the onslaught that 2012 is likely to provide. Not that Her Majesty’s Government allowed those of us in Westminster circles much time to relax and reflect on what has gone on in the year past.
Since the last issue of UK Landlord hit your doormat, the Department for Communities and Local Government (CLG) published its ‘Housing Strategy’ for England targeting policies designed to provide much needed homes and stimulate economic growth while not swelling the Exchequer’s outbox. Meanwhile, the Department for Environment and Climate Change (DECC) was busy issuing 237 pages of consultation concerning the implementation of its flagship Green Deal programme and the Ministry of Justice tabled amendments to primary legislation which will create the criminal offence of Squatting in England and Wales. Concentrating on the Housing
Strategy – it is an uncommon luxury for housing to be at the heart of Government policy for once. Although far from perfect, the new strategy recognises the importance of housing in promoting economic growth and stability. Crucially for landlords, the Government has also recognised that the only part of the housing industry which is demonstrating consistent growth is the PRS. It is clear that the powers that be would like to diversify the market by encouraging the involvement of ‘big money’ in the form of corporations and investment funds, however the expansion of the sector seems firmly in the hands of the ‘small landlord’ for the time being. While the mandarins in Whitehall
40 UKLANDLORD JANUARY/FEBRUARY 2012
work to increase the cash flow of the PRS, their counterparts in Brussels seem hell-bent on the reverse, thanks to the EU Directive on Credit Agreements Relating to Residential Property (aka the Mortgage Directive). As currently drafted, the Directive draws little or no distinction between lending for owner occupation and buy-to-let (BTL) investment. This means that, not only could BTL loans be regulated by the FSA for the first time, but that future rental income may be excluded from the lending criteria – cutting off finance for many landlords. The NLA is committed to securing amendments to this Directive and is working with partners in the UIPI to achieve this goal for landlords.
It looks set to be a busy year in Cardiff as the Welsh Assembly considers the contents of a housing White Paper – the prelude to future legislation. A bill outlining regulation of the PRS is expected to come before the devolved assembly in 2014, but there is a lot of work to be done in the meantime. Holyrood, on the other hand, has implementation in mind, as the housing sector in Scotland gears up for the launch of tenancy deposit protection sometime in the Spring. Members North of the Border should keep an eye on landlords. org.uk for updates on when and how to comply with the new requirements. n
PUBLIC AFFAIRS STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
LHA – One last Hoorah? Or all she wrote? January 2012 contains two major milestones for LHA recipients and their landlords. Firstly, the upper age threshold in relation to the Shared Accommodation Rate increases from 25 to 35 years old from the first of the month meaning that new claims made by single people who were previously eligible to access the LHA rate for a one bedroom self-contained property will only be able to claim for a room in a shared house. Those tenants whose claims are made on or after 1 April 2011 but before 1 January 2012, will move to the shared accommodation rate on the
anniversary date of their claim. However, January represents the end of the ‘transition period’ for the broader LHA rate cuts and caps meaning that the real impact of the Government’s welfare reform programme will start to become a much more pressing issue for those currently enjoying transitional protection. Fortunately, the impact of the change to the 30th percentile (from the 50th) has been cushioned somewhat by general rent inflation over the last 12 months, but this is still likely to be a very challenging start to the New Year. n
Regulation of BTL There was a great deal of speculation in the press late last year about the prospect of the European Directive on Credit Agreements Related to Residential Property (or the Mortgage Directive) and the impact that it could have UK landlords’ businesses. Some of this coverage accurately reflected the situation confronting landlords, some of it did not. There certainly is a directive, currently making progress through the institutions of the EU, which could have a significant impact on the ability of landlords to access finance to fund their portfolios. It is, however, not law yet and there is still the opportunity for the
NLA and other interested parties to influence the legislation. As drafted, the Directive fails to take account of the structure of the UK housing and finance markets. The NLA, with its partners across the EU, via the UIPI is working with MEPs and officials to construct targeted amendments which would satisfy those states seeking more consumer protection, without destroying the financial basis of the UK PRS. After all professional landlords invest in property in order to run a lettings business and therefore do not require the same protection as a consumer borrowing to buy a home. n
Delivering landlords’ messages in Brussels European legislation on energy efficiency and water efficiency is continuing to progress through the corridors of Brussels, with the UIPI, the International Union of Property Owners, providing some key input into EU policy on these important topics. Following lobbying by the UIPI, Members of the European Parliament have submitted a number of amendments to the proposed Energy Efficiency Directive, including exempting historical buildings from the obligation to install smart meters and other energy efficiency obligations. EU energy ministers have reiterated their opposition to binding energy savings targets and it is now likely that a political compromise will be reached by EU countries in the first half of this year, to be brokered by the Danish Government which currently holds the EU presidency. Meanwhile, European water efficiency legislation is at a much earlier stage, and policy is still being prepared in this area by the European Commission. In November, the UIPI gave a keynote presentation during the second meeting of the expert group on the water performance of buildings. The European Commission has now opened a consultation on the possible introduction of EU-wide measures for water efficiency in buildings. n For more information and to contribute your views on this topic, see http://ec.europa.eu/ environment/consultations/water_efficiency.htm
UKLANDLORD JANUARY/FEBRUARY 2012 41
Q&A WITH RICHARD PRICE
HHSRS for safe properties NLA Director of Operations Richard Price gives a quick guide to the Housing Health & Safety Rating System (HHSRS) in England and Wales. STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
According to the Government, only 15 per cent of landlords have heard about the Housing Health & Safety Rating System (HHSRS). Here’s a quick guide to understanding the system in England and Wales and how it works to minimise health and safety hazards in residential properties. Q: What is the HHSRS? Richard Price: The Housing Health & Safety Rating System (HHSRS) is the way in which local authorities assess housing conditions in England and Wales. The aim is to provide a system to enable risks from hazards to health and safety in dwellings to be removed or minimised. The key principle of the system is that a dwelling, including the structure and associated outbuildings and garden, yard and/or other amenity space, and means of access, should provide a safe and healthy environment for occupiers and visitors. The system applies equally to all tenures including owner occupied residences, although any enforcement action would consider tenure.
Q: How are inspections made? RP: HHSRS Inspections are in the form of a physical assessment of the whole property during which deficiencies are noted and recorded. The inspection process is a risk-based assessment and considers the effect of any ‘hazards’ in the property. Hazards are rated according to how serious they are and the effect they are having, or could have, on the occupants. All properties contain hazards, whether they are for example, stairs or electrical outlets, and it is therefore not possible to remove all hazards. The emphasis is on minimising the risk to health and safety as far as possible either by removing the hazard altogether or minimising the effect, as appropriate.
Q: What hazards does the system assess? RP: The system can deal with 29 hazards. In summary these are: dampness, excess
42 UKLANDLORD JANUARY/FEBRUARY 2012
cold/heat; pollutants e.g. asbestos, carbon monoxide, lead; lack of space, security or lighting, or excessive noise; poor hygiene, sanitation, water supply; accidents – falls, electric shocks, fires, burns, scalds; collisions, explosions, structural collapse. Each hazard is assessed separately, and if judged to be ‘serious’, with a ‘high score’, is deemed to be a category 1 hazard.
Q: How are hazards in a property assessed? RP: Once the inspection has been completed, the inspector judges firstly whether there are any hazards, and then the likelihood of an occurrence and the range of possible outcomes for those hazards. Each assessment of a hazard carried out using the HHSRS results in a score. Most inspectors will use a computer software programme to calculate the scores. A formula is used which takes into account the nature of the hazard, the likelihood of an occurrence and the seriousness of the outcome. Whilst the assessment will always be based on the most vulnerable age group, any enforcement action taken should reflect the actual occupants. For some hazards, all age groups are equally vulnerable, while for others, such as gaps between balusters, the hazard would be judged in terms of a young child. Scores are divided into ten bands (A to J); band A is the most serious and J the least serious. Hazards which fall into bands A to C are category 1 hazards with those in bands D to J being category 2 hazards. In simple terms, the greater the risk (likelihood), or more serious the outcome, the higher the overall score. An example of a high score would be a gas water heater leaking carbon monoxide – the risk is high and the outcome could be death.
Q: What happens if inspectors find a category 1 hazard in my property? RP: The hazard score does not dictate the action to be taken, but councils have a duty under the Housing Act 2004 to take action of some kind if they discover a category 1 hazard in a property, and a power to take action to deal with a category 2 hazard. Their first step should be to approach the landlord informally. If the landlord does not respond, the council is most likely to move into formal action by serving an improvement notice on the owner (or agent as appropriate) requiring that the hazard(s) be removed or minimised within a set time - generally 28 days. If a notice is not complied with within the time allowed, a prosecution for noncompliance can follow, which will be heard in magistrates courts. In the most serious cases, a council may serve a prohibition order prohibiting the use of all or part of a dwelling. For minor hazards, a council could serve a hazard awareness notice. Such notices are simply advice and do not actually require owners to do anything. If a hazard is specific to a child or elderly person but no children or elderly people occupy the property, the council could decide to suspend the notice (or part of it) until such time as a child or elderly person moves in.
Q: Can I appeal against a notice or order from the council? RP: An owner or agent who has an improvement notice or prohibition order served on them by a local council can appeal the notice, normally within 21 days. Appeals are heard by the Residential Property Tribunal Service (RPTS). The main grounds for appeal are likely to be that the deficiency referred to in the notice does not amount to a hazard;
Q&A WITH RICHARD PRICE that someone else is responsible for carrying out work at the property and the notice should be served on that person; and/or the works required in the notice are unreasonable/excessive etc. and alternative works should be considered.
Q: When will an HHSRS inspection be carried out in my property? RP: Local authorities are legally required to carry out an HHSRS inspection in all licensable properties (e.g . where Mandatory HMO Licensing, Additional Licensing or Selective Licensing applies). A local authority may also carry out an inspection if it believes a property contains a potential risk to the occupiers or as a result of receiving a complaint from a tenant. n
Northern Ireland and Scotland Please note that HHSRS does not apply in Northern Ireland or in Scotland. In Scotland, the Housing (Scotland) Act 2006 requires landlords to ensure that the houses they rent to tenants meet the ‘repairing standard’ as set out in section 13(1) of the Act. A house meets the repairing standard if: a) it is wind and watertight and in all other respects reasonably fit for human habitation b) the structure and exterior of the house (including drains, gutters and external pipes) are in a reasonable state of repair and in proper working order c) the installations in the house for the supply of water, gas and electricity and for sanitation, space heating and heating water are in a reasonable state of repair and in proper working order d) any fixtures, fittings and appliances provided by the landlord under the tenancy are in a reasonable state of repair and in proper working order e) any furnishings provided by the landlord under
the tenancy are capable of being used safely for the purpose for which they are designed, and f) the house has satisfactory provision for detecting fires and for giving warning in the event of fire or suspected fire. Every tenant who has entered into a new lease since September 2007 should be given a copy of the Repairing Standards Letter. Tenants can apply to the Private Rented Housing Panel (which acts as a third party body to mediate between tenants and landlords) for a ruling if their landlord has failed to meet that duty. n
For full details about the Property Repairing Standard and Overcrowding rules in Scotland, see the NLA Online Library www.landlords.org.uk/library/property/ property-repairing-standard-scotland
For more information see NLA Online Library: www.landlords.org.uk/library/safety/housing-health-and-safety-rating-system/introduction
UKLANDLORD JANUARY/FEBRUARY 2012 43
NLA RECOGNISED SUPPLIERS
For an up-to-date list of NLA Recognised Suppliers, visit www.landlords.org.uk
Suppliers You Can Trust For more information about the Recognised Supplier Scheme, email: recognisedsupplier@landlords.org.uk or telephone 020 7840 8921 STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
Look for the Partner or Recognised Supplier Logo What is the Recognised Supplier Scheme? We know that sourcing a new supplier can be a time consuming task, which is why the NLA works with a number of companies that provide products and services specifically for landlords. Our Recognised Supplier Scheme is a convenient way you can narrow your search, read reviews and find the supplier you need. In addition to this, a number of suppliers offer preferential rates for members of the NLA. NLA Recognised Suppliers meet a number of key requirements before being accepted on to the scheme. These due diligence measures mean that we do the hard work so you don’t have to. What does the NLA do to check those taking part are reputable and offer quality services? We undertake a series of checks before approving a supplier. These include checking
financial stability, an assessment of the products and services being sold, getting references from landlords who have used the service before, and then referring the application to our decisionmaking panel. A majority decision determines acceptance on to the scheme.
that each applicant has met a series of key requirements before being accepted on the NLA’s Scheme. Discounts and special offers from an array of different suppliers are available to NLA members.
How can members feedback? Once a supplier is approved we regularly assess how many landlords are using the service and monitor feedback from members. Members can also rate and review our Recognised Suppliers on the website www.landlords.org.uk/suppliers/ all. If you would like to recommend a supplier for the scheme, please let us know by emailing recognisedsupplier@landlords.org.uk How does the RSS benefit NLA members? Members can search the supplier directory online and in UK Landlord with the confidence
For the Scheme application pack, please visit the NLA Website: www.landlords.org.uk
NLA PARTNER
my|deposits Tel: 0844 980 0290 Fax: 0845 634 3403 info@mydeposits.co.uk www.mydeposits.co.uk
my|deposits is the only government-authorised tenancy deposit protection scheme specifically designed for landlords who want to keep hold of the deposit rather than handing it to a third party for safekeeping. With mydeposits, you pay a small fee to that legally protects the deposit, which means you can keep it in your bank account for the duration of the tenancy. At the end of the tenancy you are free to discuss the return of the deposit directly with the tenant without involving mydeposits. In the unlikely event of a dispute over the amount of deposit to be returned, mydeposits offer a free, evidence-based dispute resolution service to all members. The award nominated service uses an experienced and impartial adjudicator to quickly settle the dispute without the need to involve the courts. We believe this is the type of flexibility landlords want from a deposit protection scheme. Members of the NLA qualify for discounted protection rates for cost effective ‘pay-as-you-go’ deposit protections.
Hamilton Fraser Insurance is the NLA’s preferred insurance partner having worked closely with the NLA since 1996. Services provided to NLA Members include NLA Property Insurance, Tax Investigation Insurance (a free member benefit) and most recently Professional Indemnity Insurance to UKALA accredited letting agents. Hamilton Fraser are also our partners and scheme administrators for the successful Tenancy Deposit Protection Scheme, my|deposits.
44 UKLANDLORD JANUARY/FEBRUARY 2012
NLA RECOGNISED SUPPLIERS
For an up-to-date list of NLA Recognised Suppliers, visit www.landlords.org.uk
Accommodation for Students Tel 0845 351 9911 Fax 0161 332 8261 enquiries@easyafs.com www.accommodationforstudents.com AccommodationforStudents.com is the UK’s No1 website for advertising property to students. It enables students to find their ideal digs fast and make enquiries. Featured at the top of the search engines for all ‘student housing’ related keyword searches AccommodationforStudents attracts in excess of 350,000 unique visitors per month. NLA members qualify for discounts. Arden Credit Management Tel 0845 849 4147 nlasupport@nlarentarrears.org.uk www.nlarentarrears.org.uk Arden Credit Management is an on-line facility that allows NLA members to instruct our rent recovery team to collect outstanding rental amounts from your tenant(s). Acting on your behalf, we can contact your tenant(s) by phone or letter, visit them at the tenanted address, serve notice and undertake possession proceedings. Whichever service you require, you can be sure that we will offer a professional approach to you and your tenant(s). This service is exclusive to NLA members only. ASA Fire Systems Tel: 020 8575 1801 info@asafiresystems.co.uk www.asafiresystems.co.uk Established in 1983, we specialise in the undertaking of all works pertaining to the fire upgrade of domestic and HMO properties to include the installation and servicing of fire alarms and emergency lighting. We also supply and install fire doors and undertake any building works to achieve the required fire rating standards in properties.
British Gas Tel 0800 980 4302 MTTPAYGE@britishgas.co.uk www.britishgas.co.uk/multitenancy British Gas can help you to manage your property portfolio by providing a dedicated account manager. We can ensure tenancy changes are managed more efficiently and provide discounts on our maintenance and repair range, as well as energy efficiency advice. The service is offered to NLA members completely free of charge.
Chafes Solicitors Tel: 01663 743344 michael.devlin@chafes.co.uk www.chafes.co.uk Chafes Solicitors LLP have an experienced team of solicitors with a proven track record. We realise that your business is as individual as you are, so we provide bespoke services for your situation. Offering a fixed cost arrangement for residential possession notices, possession proceedings, service charge / ground rent recovery, rent arrears recovery ensures our costs are transparent. Chafes Solicitors LLP can offer a 25% discount off our usual fees for NLA members. Dorset Energy Advice Centre Tel: 0800 975 0166 info@deac.co.uk www.deac.co.uk The Dorset Energy Advice Centre (DEAC) has over 15 years of experience of providing advice on saving energy in the home. The DEAC team are well versed in every aspect of Energy Efficiency, renewable technologies, transport, lighting, insulation and the grants that are available to help and advise the residents of Dorset and beyond, on saving energy in the home.
EnviroVent Ltd Tel 0845 2727 807 info@envirovent.com www.envirovent.com Our systems are designed to eliminate streaming windows, condensation and mould whilst protecting your investment. We manufacture the world’s most innovative, eco-friendly ventilation solutions saving local authorities, landlords, specifiers & developers vast amounts of money in maintenance and disrepair problems. To help achieve the Decent Homes Standard, EnviroVent offers substantial discounts to NLA members. Glide Tel: 0333 666 5555 glide@glide.uk.com www.glide.uk.com With Glide you can cut your admin, fix tariffs to control costs and offer bills-inclusive rents to attract more tenants. One itemised monthly bill for all of your services, properties and tenants. Or ask Glide to bill individual tenants directly and pay you commissions for the referrals. Join Glide today.
HCR Tel 01256 313758 ll@hcr.co.uk www.hcr.co.uk HCR is the UK’s largest independent relocation specialist. Renting over 6,700 properties from private landlords throughout the UK, demand for our services continues to grow and we wish to work with Private Landlords who have properties that are suitable for our clients. Benefits to landlords include: Guaranteed Rent, Professional Occupants with 28 Months average tenancy. No charge unless we can bring your property onto our landlord scheme. NLA members can benefit from a 10% discount off their registration fee. Instagroup Tel 01189 328811 info@instagroup.co.uk www.instagroup.co.uk InstaGroup has over 30 years experience and expertise providing products and services to improve energy efficiency. We supply Cavity Wall/Loft Insulation, Solar PV and Renewables, External/Internal Solid wall Insulation, Park Homes Insulation, Acoustic Wall/Ceiling/Floor systems and Innovative Flooring solutions. Get in touch to find out how you can reduce your carbon footprint through effective and affordable insulation systems.
Landlord Action Tel 0333 240 9770 enquiries@landlordaction.co.uk www.landlordaction.co.uk Landlord Action is the first UK-based organisation helping landlords and agents deal with their problem tenants. Founded in 1999 as the first ever fixed-fee tenant eviction specialist, they have acted in nearly 20,000 problem tenant cases and are considered the authority in this field. They run a free advice line to help landlords understand the process of eviction and give general advice about dealing with problem tenants. NLA members are entitled to a £20 discount on their eviction services. Lloyds TSB Commercial Please get in touch with your local specialist via the website: www.lloydstsb.co.uk/property Lloyds TSB Commercial has established a team of specialists who provide financial expertise, support and services to small and medium-sized enterprises with an annual turnover of up to £15m operating in the property sector. For further information on our services or to contact us, visit www.lloydstsb.co.uk/property.
UKLANDLORD JANUARY/FEBRUARY 2012 45
NLA RECOGNISED SUPPLIERS
For an up-to-date list of NLA Recognised Suppliers, visit www.landlords.org.uk
Loft Interiors Tel 0800 157 7322 Fax 0800 157 7323 info@loft-interiors.co.uk www.loft-interiors.co.uk LOFT Interiors provide landlords their agents and developers with a “onestop furnishing solution”. With over 30 years experience LOFT Interiors are the North West’s leading furniture supplier. We provide immediate, cost effective, furnishing solutions specialising in furniture packages, contract furniture, interior design, domestic appliances, laminate flooring and carpets, window blinds and property maintenance. LOFT Interiors are proud to offer all NLA members a 5% discount. Mattressman Tel: 0800 567 7625 Email: barryford@mattressman.co.uk www.mattressman.co.uk Mattressman is one of the UK’s leading suppliers of mattresses, bed frames & divans, offering landlords a comprehensive range of products at low prices. We hold over 8000 products in stock including bedroom furniture & accessories all ready for next day delivery to the entire UK. Further discounts available for NLA members. Portal Tax Claims Tel: 0845 000 0450 Email: nla@portaltaxclaims.com www.portaltaxclaims.com Portal Tax Claims are professional experts in the field of Capital Allowances and are widely recognised as one of the industry leaders. The company works extensively with some of the UK’s largest IFA, Accountancy, Property and Legal networks to provide surveys and tax reports on commercial properties (including HMOS, apartment blocks, and holiday lets) resulting in hundreds of millions of pounds being claimed.
Property Owners Directory Tel 020 7722 4334 Fax 020 7722 5335 info@propertyownersdirectory.com www.propertyownersdirectory.com POD is the UK’s leading online recommended tradesmen and property services directory. NLA members are entitled to a 15% discount for a site listing, and can claim a £20 cashback for recommending reliable tradesmen who sign up for a paid listing.
Property Portfolio Software Tel 01925 398 599 enquiries@propertyportfoliosoftware.co.uk www.propertyportfoliosoftware.co.uk Property Portfolio Software provides solutions to help landlords get better organised when managing multiple properties. Our software solutions are designed by landlords for landlords and are guaranteed to save you time, money and effort in running all aspects of your property business. NLA members can claim a 15% discount.
46 UKLANDLORD JANUARY/FEBRUARY 2012
Seddons Solicitors Tel 020 7725 8000 enquiries@seddons.co.uk www.seddons.co.uk Our specialist Property Dispute Resolution team advises landlords on all tenancy problems including rent arrears, squatters and the recovery of possession. Also commercial and residential property practice with teams for secured lending, commercial contracts and employment issues. Seddons offer NLA members a 15% discount on its usual fees for landlord and tenant disputes. An estimate of fees will be provided at the outset.
Sky Communal Solutions Tel: 0844 241 0331 no-reply@skyhomes.co.uk www.sky.com/managers Sky Communal Solutions (part of BSkyB group) equips private blocks of flats with high-quality digital TV. Our communal TV solutions are Shared Dish and Integrated Reception System (IRS). They will give all your residents a wide range of great digital TV options. For a free estimate, visit www.sky.com/managers.
Spick & Span Commercial Services Tel: 023 8060 2299 info@cleaningforlandlords.co.uk www.cleaningforlandlords.co.uk Spick & Span Commercial Services provide end of tenancy cleaning to landlords and letting agents across the UK. We can cover any number of properties within your portfolio whilst keeping superior quality of service. We have been in business for over 20 years and tailor our services to individual needs.
Upad Tel: 0333 240 1220 info@upad.co.uk www.upad.co.uk Need to find your perfect tenant? Upad advertises your property on the biggest UK lettings sites, including Rightmove, Zoopla and Findaproperty. We have a range of professional services for landlords, including inventories, referencing and rent collection. NLA members save 10% (£89.10 + VAT, normally £99) on a basic listing.
Suppliers You Can Trust For more information about the Recognised Supplier Scheme, email: recognisedsupplier@landlords.org.uk or telephone 020 7840 8921
NLA PARTNER NEWS STARTING UP REGULATORY PROPERTY NEWS NLA Property Insurance: Tailor-Made for Landlords
SAFETY
FINANCE
Welsh AST threshold increases Following the changes in Wales from 1 December 2011 to raise the threshold for Assured Shorthold Tenancies from £25,000 to £100,000, many more private rentals in Wales will be subject to Tenancy Deposit Protection legislation. Tenancies with annual rents up to £100,000 a year automatically defaulted to an Assured Shorthold Tenancy from the 1st December 2011. Deposits that have been taken in respect of these tenancies will need to be protected with one of the Government-authorised tenancy deposit protection schemes. my|deposits, the Government-authorised scheme which is jointly owned by the National Landlords Association and Hamilton Fraser Insurance, explains that deposits taken before 6 April 2007 do not have to be protected unless the tenancy agreement has been renewed. Eddie Hooker, Chief Executive of my|deposits, said: “By using my|deposits, landlords n can continue to hold onto the deposit money themselves during the tenancy, and deal directly with the tenant when the time comes for them to
move out.” Using my|deposits, both parties will have access to free alternative dispute resolution if there is a disagreement over the return of the deposit. “Any dispute can thus be sorted out by us, rather than relying on a lengthy court procedure,” according to my|deposits. Landlords who fail to protect a deposit on an Assured Shorthold Tenancy can face penalties.
For more information about my|deposits, visit www.mydeposits.co.uk or call 0844 980 0290 See page 59 for the NLA Advice Line’s guidance for landlords on tenancy deposit protection
UKLANDLORD JANUARY/FEBRUARY 2012 47
NLA RECOGNISED SUPPLIER PROFILE
Instagroup
To further its core objective to raise standards in the private-rented sector, the NLA carries out a series of checks on companies that it considers professional and offer good value for money to its members under its Recognised Supplier Scheme. STARTING UP
REGULATORY
TENANCY
NEWS
SAFETY
FINANCE
InstaGroup: Insulation pioneers for the PRS
David Robson, Managing Director, InstaFoam and Fibre
As the winter weather bites, and with the Green Deal just around the corner, the thoughts of most landlords are now turning to insulation and other energy efficiency technologies. InstaGroup, a new Recognised Supplier to the NLA, is an industry pioneer in the insulation sector, and is positioning itself to work closely with the private-rented sector on implementing the Green Deal from the outset. the Department of Energy and Climate Change, and expects to be recognised as both Assessors and Suppliers. “We are also working with a finance company towards being able to offer Green Deal Finance,” David told UK Landlord.
InstaGroup was established in 1980, well before the start of the current boom in environmentally friendly technology. Since then, the business has grown rapidly, in response to increasing public awareness of the need to conserve heat and energy, both to protect the environment and to reduce consumption of the world’s resources. The company concentrated its initial efforts on the installation of cavity wall and loft insulation through its contracting division, InstaFoam and Fibre Limited. This has become one of the largest insulation companies in southern England, and it provides insulation and draught proofing services for government and energy companies’ grant schemes. It also undertakes the installation of solar PV panels and other microgeneration systems. The Managing Director of this division, David Robson, says that InstaGroup focuses on Loft/ Cavity Wall Insulation, Solid Wall Insulation, Spray Foam Insulation, Solar PV & Renewables, Park Homes Insulation, Acoustic Floors, Walls & Ceilings and Specialist Flooring Products. Back in 1983, InstaGroup also launched its own brand of insulation products, InstaFibre, which it now supplies to over 80 independent, approved contractors; in 2010, this nationwide consortium was rebranded as The Snug Network, which has grown to become the UK’s leading network of specialist insulation installers.
48 UKLANDLORD JANUARY/FEBRUARY 2012
One of the company’s most successful lines of products for the sector is InstaClad. This is used for buildings that are hard to insulate, such as solid wall, and listed buildings where items such as skirtings and dados cannot be changed or removed. The InstaClad product line includes the highly effective insulant InstaClad Aerogel Super Slim. Meanwhile, the company’s InstaLine range provides solid wall insulation - based along similar lines to the InstaClad system, each product has a different thickness which enables a bespoke solution. And David says that the company is currently discussing establishing deals and discounts for these and other insulation services for NLA members. Preparing for the Green Deal With the Green Deal due to start operating this Autumn, the company is also working closely with
The market has changed beyond recognition since 1980, with new regulatory, environmental and financial drivers generating significant growth for InstaGroup. Although InstaGroup remains a privately-owned company, operating from its own purpose-built offices in Berkshire, David says that the group’s mission remains the same: to be a leader in this rapidly developing market, and to help build a more energy efficient residential sector. “Everyone is now aware of the need for energy efficiency,” he adds. “InstaGroup is one of the pioneers in the industry and continues to help ordinary people save money and reduce their carbon footprint through effective and affordable insulation solutions.” n
For more information, please email info@instagroup.co.uk or telephone 01189 328811 or visit: www.instagroup.co.uk
NLA RECOGNISED SUPPLIER PROFILE
Portal Tax Claims
To further its core objective to raise standards in the private-rented sector, the NLA carries out a series of checks on companies that it considers professional and offer good value for money to its members under its Recognised Supplier Scheme. STARTING UP
REGULATORY
TENANCY
NEWS
SAFETY
FINANCE
Portal Tax Claims: making the most of your capital allowances Portal Tax Claims specialises in providing HMRC fully compliant reports that result in successful claims for capital allowances. Will Marshall, Portal Tax Claims
Portal Tax Claims is part of The Portal Group of financial companies employing more than 120 staff at its headquarters in Kent. The group has Financial Services Authority authorised and Ministry Of Justice regulated business operations. Portal Tax Claims is ISO9001 accredited and all staff undergo comprehensive training in capital allowances. Expertise and services Portal Tax Claims has been a member of the HMRC working group for a consultation providing feedback on proposed changes to the rules on capital allowances claims which could have farreaching significance for this tax regime. Portal Tax Claims’ Head Technician currently sits on the on-going HMRC consulting committee for capital allowances. The company provides landlords with the following services, working alongside the landlord’s accountants if needed: • A free, no obligation meeting to assess whether a client qualifies for capital allowances and what their potential allowances might be. Normally two to three meetings are involved depending upon the complexity of the situation and the information available. Invariably one of the meetings will involve the prospective client’s accountant.
• To qualify for capital allowances, the client must be a UK tax payer; the property must not be owned by a pension fund, local or central government or a charity; and at no time in the history of the property must a claim have been made. There are no charges for these meetings. • The firm carries out all the work to produce the report, including a survey, at its own expense. There are no up-front charges or add-ons. They only charge a fee if they identify at least £25,000 of capital allowances. • Once the client enters into a contract, Portal Tax Claims implements a formal process to gather the evidence in case of a challenge by HMRC. If after that process the client qualifies they then instruct a qualified surveyor to produce a report which defines the inherent plant and machinery in the fabric of the building and quantifies the claim. From that they will produce a report that goes to the client’s accountant for review. Providing no issues are identified the client’s accountant will then submit the report to HMRC. • If the company does not produce a report there is no charge. If the property costs £200,000 or more and they identify less than £25,000 of allowances, the report is free of charge. • For properties costing less than £200,000 there is a fixed fee of £2,500. For those acquired at £200,000 and above there are a number of
payment options to suit the client’s financial circumstances. Portal Tax Claims says it has 100 per cent success with HMRC claims resulting in millions of pounds worth of benefits to its clients. n
By making the most of your capital allowances you could enjoy significant rebates and reductions for future taxes.” Will Marshall.
For more information, contact Will Marshall by telephone on 0845 000 0450 or by email: w.marshall@portaltaxclaims.com or visit: www.portaltaxclaims.com
UKLANDLORD JANUARY/FEBRUARY 2012 49
FEATURE – EXPERT ADVICE: DAMP AND CONDENSATION STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
Expert Advice: Damp and Condensation Damp and condensation can cost landlords time and money spent on redecorating and in extreme cases, can lead to the tenant wanting to end the tenancy. Rebecca Marczak of NLA Recognised Supplier EnviroVent explains how to prevent problems occurring in your rental properties. What are the problems that condensation and damp can create in a private-rented property? The first tell-tale signs of condensation are streaming windows, walls and, in some cases, doors. This will affect the decor of the property, wallpaper may start to peel, mould (usually black) will appear on window frames, walls and ceilings. If left the mould will migrate to soft furnishings, fabrics, bedding and clothes hung up in wardrobes. Damp can also appear on walls, especially in corners and behind furniture. It is worth noting that rising damp is a separate issue to condensation and mould problems. What are the main sources for damp and excess condensation in a property? The main source for excess condensation in a property is simple – poor or inadequate ventilation. High occupancy levels also contribute to condensation problems, as does the daily living routine of bathing, cooking and washing. What should landlords advise their tenants to do to minimise condensation? Landlords should advise their tenants to try to keep the inside temperature reasonably constant
50 UKLANDLORD JANUARY/FEBRUARY 2012
for as much of the time as possible. Clothes should not be dried over the radiator and where possible avoid drying clothes indoors. If there is no alternative to this, the clothes rack should be placed in a well-ventilated room with the door shut. If your tenants use a tumble dryer they should ensure that it is properly vented or the condensate reservoir is regularly emptied. Do not disable any extract fans, however tempting it may be to do so, and ensure that these are used when cooking or bathing/ showering. Keep pan lids on whilst cooking to avoid excess steam. What parts of the building structure should landlords look at to minimise build-up of condensation? Modern homes, rentals and non-rentals, are much more energy efficient thanks to improvements such as double glazing and cavity wall insulation. However, these improvements ‘seal up’ a property making the need for good ventilation a priority in terms of comfort and health. Check that the ‘wet rooms’ (bathroom, kitchen, WC’s and Utility rooms) have effective ventilation, test the noise levels of extractor fans, if these are very noisy it is more than likely the tenant will turn the fan off. If an extractor fan cannot hold a postcard then they are not
providing sufficient ventilation and should be replaced. Until a property has occupants it can be difficult to spot condensation problems. What key ventilation, insulation and heating would you recommend in a private-rented property to minimise build-up of condensation? Poor heating and insulation in a property will contribute to condensation issues; ensure that any type of insulation meets British regulations and the same goes for heating systems. Invest in sustainable and energy efficient solutions, products which will last the lifecycle of the property rather than something which will need replacing in 3 years’ time. PIV (Positive Input Ventilation) is ideal for ventilating a property, it is quick and easy to install, without the requirement for extensive ductwork. PIV works by delivering fresh, filtered and clean air into the dwelling, gently ventilating it. This method dilutes high humidity levels, and by doing so, reduces any surface condensation, the main cause of mould growth. What’s more, PIV has energy efficient benefits and could save up to 10% of annual space heating costs.
Do you advise any decorating or other tips to landlords to avoid or minimise condensation? Prevention is better than cure! Avoiding problems of redecoration, insurance claims and the possible loss of a tenant is cheaper and less hassle than the alternative. Investing in energy efficient and sustainable solutions which offer long term benefits and savings are better options. How can you spot rising damp? It can be difficult to differentiate between condensation and rising damp. EnviroVent, offers a free, no obligation home check to identify the type of problem using a device called a therma-hygrometer which measures the relative humidity levels in the property. The readings will be higher in the areas of the property suffering from condensation and mould. The result of the survey allows us to determine and recommend the correct type of ventilation for the dwelling. If the problem is rising damp we will recommend that a specialist is contacted to deal with the problem. n
Prevention is better than cure! Avoiding problems of redecoration, insurance claims and the possible loss of a tenant is cheaper and less hassle than the alternative.
EnviroVent have won a Queens Award for Innovation and are now celebrating 25 years of manufacturing sustainable ventilation products. For more information, see www.landlords.org.uk/services/suppliers/envirovent Need to delve into the topic of condensation? Take a look at the NLA Online Library: www.landlords.org.uk/library/property/condensation
UKLANDLORD JANUARY/FEBRUARY 2012 51
MORTGAGE MARKET ROUNDUP STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
BTL lending on the up Buy-to-let lending continues to grow, according to the CML’s most recently published data. In the third quarter of 2011, the value of new BTL lending increased by 19 per cent to £3.8bn. This put BTL lending at its highest since the final quarter of 2008. Hand in hand with the growth in lending comes the news that the number of BTL lenders and products has also increased. Defaqto analysis states that since October 2008 the number of products has grown over 100 per cent and the number of lenders has increased from 56 to 63. Their analysis also shows the growing importance of intermediaries with 60 per cent of products available exclusively through brokers. “Although the growth in lenders mentioned above may seem small, while some high-street lenders have withdrawn from the BTL arena, they have been replaced by specialist lenders who see the broker as the best tool distribution channel,” Gareth Lowman of Savills Private Finance says. During the third quarter, 53 per cent of offers were for remortgages, which suggests that existing landlords are looking to release equity in order to expand their portfolios. “This improvement in the remortgage market can be attributed to an increase in the number of good deals available specifically for refinancing and evidence that house prices may have bottomed out, providing suitable conditions for further property investment,” says Paul Rockett, Managing Director at NLA Mortgages. “Also noteworthy is that around 85 per cent of offers were made to people who are 40 years old or over, compounding the finding that experienced landlords are now remortgaging.” According to the Landlord Profile
Tracking Index of the NLA for the third quarter, the average chosen fixed rate for BTL rose by +0.21 per cent in the quarter to 5.03 per cent, with the average chosen tracker rate up just 0.08 per cent to 4.10 per cent. Variable rate in favour And continuing the trend since the beginning of 2011, the last quarter saw a further increase in the proportion of buy-to-let applications for variable rate products. This reflects the weight of expert opinion that the Bank of England base rate will remain low for some considerable time, certainly well into 2012. In the third quarter of 2011, 62 per cent of applications received by NLA Mortgages were for variable rates with just 38 per cent for fixed rate mortgages, according to Paul Rockett. “During the third quarter there has been a small increase to the average variable rate, rising to 4.10 per cent,” he told UK Landlord. “The observed rate increase is likely to be a result of continuing problems in the Eurozone including the huge financial bailout for Greece. This in turn has affected the money markets and increased the price of funding. It is probable that product rates would have risen further had there not been increased competition amongst lenders in the buy-to-let mortgage market.” On the supply side, there has been continued aggressive movement by financial institutions in the market. “Over the past few weeks, probably the single most important change was the move made by Woolwich,” says Gareth Lowman of Savills Private Finance. Woolwich moved the maximum loan to value from a cautious 60 per cent to 75 per
52 UKLANDLORD JANUARY/FEBRUARY 2012
Best Sellers NLA Mortgages’ most popular products in November included: • 3.74 per cent 2 year discount with Hinckley and Rugby Building Society up to 75 per cent LTV with £1999 completion fee. • 4.19 per cent 2 year fixed rate with Kent Reliance up to 75 per cent LTV with 3.00 per cent completion fee. • 4.99 per cent 2 year discount with Saffron Building Society up to 80 per cent LTV, with £2995 completion fee. • 5.99 per cent 2 year fixed with Kent Reliance up to 85 per cent LTV with a 1.00 per cent completion fee.
cent. “It was good to see one of the UK’s largest residential lenders look to raise its BTL profile,” he told UK Landlord. “However, this move coupled with the good products they made available meant service suffered and their daily funding limits were often reached early in the day. Products have subsequently been increased but if you’re looking for 75 per cent (up to £1m) with a flat fee, Woolwich is worth a look.” Platform, the intermediary arm of the Co-operative bank, has consistently been offering a wide range of products; fixes and trackers at 60 per cent LTV up to 75 per cent each with percentage or fixed fee options. Platform
has recently launched a range of exclusives with a 1 per cent cashback (capped at £2000). The 2-year tracker starts from 3.49 per cent (at 60 per cent) up to 4.09 per cent. (75 per cent). “The product has a flat fee and comes with a free valuation for both purchases and remortgages,” Gareth says. Remortgages also receive free legals. Downside? Loans are capped at £350,000 and the limited distribution. n
For more information, visit: www.nlamortgages.co.uk
HOUSE PRICES AND LETTINGS SURVEYS REGULATORY
STARTING UP
PROPERTY
TENANCY
SAFETY
FINANCE
House Prices House prices remain subdued House price indices at a glance Index
Month
Price
Average house price
movement (England & Wales) CLG
October
-0.6
£205,974
Land Registry
October
-0.9
£159,999
Halifax
November
-0.9
£161,731
Nationwide
November
+0.4
£165,798
LSL Acadametrics November
+0.0
£220,043
• The latest house price index from Communities and Local Government (CLG) records that in October UK house prices decreased by 0.4 per cent over the year and decreased by 0.6 per cent over the month (seasonally adjusted). The average mix-adjusted UK house price was £205,974. Average house prices increased by 0.6 per cent over the quarter to October, compared to a quarterly decrease of 0.6 per cent over the quarter to July. •The Land Registry reported an annual price decrease of 3.2 per cent which takes the average property value in England and Wales to £159,999. The monthly change from September to October is a decrease of 0.9 per cent and continues the negative monthly price change seen in September. The only region in England and Wales to experience an increase in its average property value over the last 12 months is London with a movement of 0.3 per cent. The East experienced the greatest monthly rise with a movement of 0.7 per cent. The North East experienced the greatest annual price fall with a decrease of 7.2
• House prices rose by 0.4 per cent in November according to Nationwide. This means that house prices are 1.6 per cent higher than they were one year ago, and the price of an average house now stands at £165,798, according to the lender. “House prices have remained surprisingly resilient in recent months, despite the deterioration in the economic outlook. But, with the UK economic recovery expected to remain sluggish well into 2012, house price growth is likely to
remain soft, with prices moving sideways or drifting modestly lower over the next twelve months,” chief economist Robert Gardner said. •House prices in England and Wales were flat in November according to the LSL Acadametrics house price index, with the average price of a home in England & Wales now £220,043, which is 0.7 per cent lower than in November 2010. n
per cent. Wales experienced the most significant monthly price fall with a decrease of 3.0 per cent. •The Halifax house price index reported that house prices fell by 0.9 per cent in November, and were down 1.0 per cent annually. “House prices in the three months to November were 0.6 per cent lower than in the previous three months. Prices fell by 0.9 per cent between October and November. This followed October’s 1.2 per cent gain, therefore, continuing the very mixed monthly pattern seen this year,” Halifax housing economist Martin Ellis said. “Overall, house prices have remained remarkably stable in 2011 despite the difficult and deteriorating economic climate and the substantial pressure on households’ finances. The UK average price now is only marginally lower than at the end of 2010. In addition, activity has recently shown a few signs of strengthening a little. We expect the market to remain broadly unchanged in terms of both prices and sales over the coming few months as demand and supply conditions alter little.” The average house price is now £161,731.
Regional house price indices 12-month percentage change for the latest month
Source DCLG
UKLANDLORD JANUARY/FEBRUARY 2012 53
PRODUCTS AND SERVICES DIRECTORY Products and Sevices Directory - adverts are booked in units or multiples of units. Each single unit measures 3cm x 1 column (6cm) wide. Prices are given per unit, as a total cost for the full schedule booked. See below. For all advert enquires please contact Steve Pearce at advertising@uklandlord.org.uk or on tel: 0117 957 5400
FIRE SAFETY
LEGAL SERVICES
This space is available from just £67 per issue
PROFESSIONAL SERVICES
LANDLORD PORTAL
LANDLORD SOFTWARE
COSTS: TRADE ADVERTISING 3 issues
Black Colour
-
£200 £260
Prices per single unit 3cm x 6cm
54 UKLANDLORD JANUARY/FEBRUARY 2012
6 issues
Black Colour
-
£380 £495
PRODUCTS AND SERVICES DIRECTORY LETTING AGENTS
LETTING
TRACING SERVICES
PLUMBING, HEATING & GAS
APPLIANCES
Promote your products and services to over 30,000 landlords and Property Investors Products and Sevices Directory - adverts are booked in units or multiples of units. Each single unit measures 3cm x 1 column (6cm) wide. Prices are given per unit, as a total cost for the full schedule booked. For all advert enquires please contact Sandra Zealand or Steve Pearce at advertising@uklandlord.org.uk or on tel: 0117 957 5400
MAINTENANCE
PROPERTY FOR SALE CLEVELAND CLEVELAND TS10 A SMALL PORTFOLIO CONSISTING OF 3X 1BED FLATS, 1X 3 BED DETACHED HOUSE, 1X 3 BED SEMI-DET HOUSE & 1X 2 BED SEMI-DET HOUSE. ALL TENANTED, ALL IN THE TS10 AREA. • £450,000 • 6% yield at current rents with scope to increase. Tel: 07973478736 for further details 0r email alanturner68@hotmail.com
Wishing our readers a happy & prosperous new year
UKLANDLORD JANUARY/FEBRUARY 2012 55
MAXIMISE YOUR MEMBERSHIP
Benefit from a wide range of services NLA Services will help you with all aspects of renting your property. Members enjoy discounts or cashback on all our services. We offer: • my|deposits: The only government-authorised Deposit Protection Scheme designed for landlords who prefer to keep hold of deposits for the duration of the tenancies* • NLA Forms: FREE online editable tenancy agreements, forms and letters to tenants • NLA Property Insurance: A choice of Standard or Superior policy to meet your needs • NLA Tenant Checks: A choice of instant or fully comprehensive tenant reference checks • NLA Rent Guarantee Insurance: Rental income protection if your tenant fails to pay • NLA Mortgages: An online search and quotation service to help you find the best buy-to-let mortgages. Cashback for NLA Members* • NLA Conveyancing: An online search and quotation service to help you find the right law firm. £100 cashback for NLA Members* • NLA Energy Performance Certificates (EPCs): Professional property energy assessments from accredited assessors • NLA Online Shop: Our one-stop-shop for many of your landlord needs, from pre-printed tenancy agreements to fire safety equipment for your property • Recognised Suppliers Scheme: Access to a range of suppliers that you can trust. We carry out a series of checks on each supplier before they qualify for the Scheme
Other membership benefits: • Know your rights and responsibilities • Enjoy substantial savings • Meet fellow landlords • Strengthen our voice • Gain a competitive edge
For details on membership benefits: Visit: www.landlords.org.uk/membership-benefits Call: 020 7840 8937 Email: membership@landlords.org.uk *Terms and conditions apply 56 UKLANDLORD JANUARY/FEBRUARY 2012
NLA MEMBER VIEWPOINTS STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
Landlord Views: David Heard “I am a partner in a steel and plastic drum reconditioning company although I only attend the site three days a week now because of my commitments as a landlord. I have a portfolio of 40 properties. My advice to any new investor landlords is that although property investment meetings can be very useful to learn basic investment strategies, beware – you will not become a millionaire overnight! The only people who do are those charging you £3,000 for the course. From my experience, you will have
David Heard NLA member
Options
Subscription
Saving
5 years
£320*
£98
£195*
£63
to carry on working for many years and take many financial risks if you want to produce a substantial property portfolio. The bottom line is that it will take a lot of time and hard work, including financial stress, to achieve the goal of being capable of living off of your portfolio. If you are going to risk the standard of living you have now to improve your future, you must have the backing of your partner or spouse. If your partner gets involved as much as mine has done, you will have a much greater likelihood of building and managing a successful
property portfolio. I have been a multiyear member for three years now. The main benefit is the very wellinformed telephone helpline which can save you thousands of pounds on legal fees by offering in-depth advice on some of the more technical aspects of being a landlord. However educated and knowledgeable a landlord is, life has a tendency to throw the odd unusual spoke between the wheels, and if you are unsure of the direction to take on any particular aspect, then the answer is only ever a phone call away.” n
* Membership fee is tax deductable against letting income
3 years 1 year
(only £1.23 per week)
(only £1.25 per week)
£98*
(only £1.88 per week)
Save £10 on Direct Debit**
**To join via Direct Debit call the membership team at 020 7840 8937
To join the NLA or to find out about the benefits of membership visit: www.landlords.org.uk/membership
UKLANDLORD JANUARY/FEBRUARY 2012 57
THE NATIONAL LANDLORDS ASSOCIATION The Aims of the NLA The National Landlords Association aims to establish itself as the leading national representative organisation for private landlords. It seeks to raise standards and encourage best practice in the private rented sector, principally by helping landlords to be aware of their obligations and responsibilities and by codes of practice. It lobbies government and other national and supra national bodies with a view to influencing public policy for the legislative and regulatory environment affecting the letting of private residential accommodation. It seeks to create an effective regional and local branch network that can work in co-operation with local and devolved government, and works in co-operation with non-government organisations where there is a common interest in the private rented sector. It develops, promotes and offers a range of services designed to meet the needs of private landlords.
President
Geoffrey Cutting
Chairman Chief Executive Officer Executive Assistant
David Salusbury Richard Lambert Steven Powers
Policy Policy Manager Public Affairs Officer
Chris Norris Vincenzo Rampulla
Policy Officer
David Cox
Media Media Relations Manager Press Officer
Lucy Cheeseman Dane Svenson
Editor UK Landlord
Andy Stern
Managing Editor UK Landlord
Louise Gale
Marketing & Sales Head of Marketing & Sales Marketing Manager
Paul Berwick James Acreman
Affinity Marketing Manager
Vacant
Marketing Executive Marketing Executive Membership Marketing Executive my|deposits
. Lucy Salter Sai Mehta Sarah Kennett
Operations Director of Operations
Richard Price
Landlord Development Manager
Alison Perkins
Member Services Manager
Meurig Lloyd
Operations Manager Operations Support Officer Local Government & Accreditation Officer
Dave Offord Charlotte Clements Siobhan Cannon
Telephone Advisers Chris Hellings, John Coyne, David Mclean, Tesh Rai, Jilly Westcombe-Evans, Gordon Brierley, Jackie Taylor, James Fraser, Alan Jakeway, Catherine Behdad, Sally Blunt, Stephanie Traynor, Paul Gosal and Georgina Nwabueze and Erica Mackenzie. Finance & Administration Director of Finance and Company Secretary
Patrick Jacobs
Membership Manager
Pauline Wilson
Membership Administrator
Dean Johnson
Membership Administrator
Vicky Little
Membership Administrator
Shabana Khan
Accounts Manager
Ian Wilcox
Book-keeper
Janet McCarthy
HR Executive
Christine Williams
Membership Assistant
Jack Stevenson
Systems IT Manager IT Consultant
Mike Houghton Simon Jessop
Web Developer
Subs renewals/queries/change of address: Tel: 020 7840 8937 E: membership@landlords.org.uk To purchase Tenancy Agreements: Tel: 020 7840 8900 or www.landlords.org.uk/shop General Correspondence: 22-26 Albert Embankment, London SE1 7TJ Tel: 020 7840 8900 Fax: 0871 247 7535 E: info@landlords.org.uk www.landlords.org.uk
58 UKLANDLORD JANUARY/FEBRUARY 2012
Vacant
Regions Head of Regions Regions Coordinator Regions Support Officer
Ken Staunton Sally Thorn Lyra Haldane
England East of England Regional Representative Lynsey Sweales Local Representative (Norfolk, Suffolk) Emma Hunter Local Representative (Essex) Barbara Carr Local Representative (Hertfordshire) James Fraser Local Representative (Bedfordshire, Luton, Cambridgeshire) Billy Gill East Midlands Local Representative (Northamptonshire) John Socha Local Representative (Nottinghamshire, Derbyshire, South Lincolnshire) Raj Beri Local Representative (Leicestershire) Christine Fernandes Local Representative (North Lincolnshire) Lynda Bowen London Regional Representative Maryann Pearce Local Representative EuGin Song Local Representative Richard Blanco Local Representative Yvonne Baisden Local Representative Philip McGriskin Local Representative Lucy Regan North East Regional Representative (County Durham, Northumberland) Johnny Lighten Local Representative (Tyne & Wear) Bruce Haagensen Local Representative (Teesside) Steve Simpson North West Regional Representative Tom Reynolds Local Representative Carolyn Uphill Local Representative Garry Heil South East Local Representative (Kent) Marion Money Local Representative (Berkshire, Buckinghamshire & Oxfordshire) David Kybett Local Representative (East Sussex) Tony Richard Local Representative (West Sussex) Susan Bryer Local Representative (Hampshire) Mark Richardson Local Representative (Surrey) Rowan Carstairs South West Local Representative (Devon) Claire Heale Local Representative (Cornwall ) Vacant - See website to apply Local Representative (Dorset) Steve Bartlett Local Representative (Bristol & Somerset) Jacqui Darbyshire Local Representative (Gloucestershire) Paul White West Midlands Local Representative (Staffordshire, Warwickshire & West Midlands) Mary Latham Local Representative (Shropshire & North Wales) Julie Woolfenden Local Representative (Wolverhampton & Coventry) Don Robbie Local Representative (South Staffordshire) Mandy Bygrave Yorkshire and the Humber Local Representative (Doncaster, Rotherham, Barnsley, Selby) Carl Agar Local Representative (Hull, Scunthorpe, Grimsby) Lynda Bowen Local Representative (Scarborough, Whitby, Bridlington) Jackie Smith Local Representative (Sheffield) Shona Davison Local Representative (Sheffield) Chris Bryan Local Representative (Leeds, York) Mike Troke Local Representative (Bradford, Huddersfield, Wakefield, Halifax) Fiaz Rashid Northern Ireland Northern Ireland Representative Connor McCann Scotland Scotland Representative (Glasgow) David Kendall Local Representative (Dundee & Fife) Gerry McDougal Local Representative (Edinburgh) Tristan Compton Local Representative (Aberdeen) Lorraine Young Wales Wales Representative Lee Cecil Local Representative (North Wales) Julie Woolfenden Local Representative (South Wales) Vince Botham
Please Note: All NLA representatives can be emailed by using their name and standard NLA email/derivative. e.g: Lee Cecil: lee.cecil@landlords.org.uk
NLA SERVICES
visit: www.landlords.org.uk
NLA Advice Line Feedback The NLA Advice Line has been set up to provide members with practical guidance and offer reassurance on the numerous issues that can affect landlords throughout the UK.
STARTING UP
REGULATORY
PROPERTY
TENANCY
SAFETY
FINANCE
Landlords and tenancy deposit protection rules One of the main topics on which NLA members seek guidance from the NLA Advice Line relates to the rules on tenancy deposit protection. Chris Hellings, Advice Line Supervisor, addresses the key points that the NLA Advice Line team gives to members. It is almost 5 years since legislation to protect a tenant’s deposit was brought in by the Government for England and Wales. From 6th April 2007, any landlord who takes a deposit on an Assured Shorthold Tenancy in England and Wales has to protect it in one of the Government-approved schemes. The NLA Advice Line still gets a considerable number of calls from members who are unaware of this legislation. Below are some key points. • Failure to comply with the legislation would lead to a penalty, if taken to court. The penalty will be 3 times the deposit plus the return of the deposit, all payable to the tenant. As you can see, this can be a very expensive mistake. • If you renew an agreement after 6th April 2007 with an existing tenant you will still have to re protect the deposit, even if you use the original deposit. The law sees this as, a new agreement–so–a new deposit! • However if the tenancy is allowed to become a Statutory Periodic Tenancy, (this happens automatically if no further agreement is entered into) there is no requirement to re protect the deposit. This will also speed up the possession process if a Section 21 was required. • The two types of schemes are 1 – Insurance based, & 2 – Custodial. There is a fee to pay for the Insurance based scheme, the Custodial is free. • If you have created a tenancy BUT NOT protected the deposit, you can still do so but if the tenancy has become periodic you can only use the Custodial Scheme to do this. • The Custodial Scheme is the only one available for landlords who do NOT live in the UK.
• You must provide the tenant with a certificate containing all the relevant information (Prescribed Information) within 14 days of receiving the deposit. Relevant Information 1. The name and contact details of the Scheme you are using including details of dispute resolution service; 2. How the deposit is protected and how to apply for its release; 3. Details of what happens if the landlord or tenant cannot be found; 4. The address of the property and amount of the deposit; 5. The landlord or agent’s name and contact details; 6. Details of any third party responsible for the payment of the deposit; 7. Items covered by the deposit; 8. Details of when the landlord is able to retain part of the deposit and how to dispute this retention. For a full list of the Prescribed Information, see the Tenancy Deposits section of the NLA Online Library. Provided you do not enter into a new agreement, the protection will last as long as the tenancy does, with no further fee to pay (if using my|deposits).
Further information may be found on all schemes (in England & Wales) at: www.landlords.org.uk/library/ tenancy/tenancy-deposits and www.direct.gov.uk/ en/HomeAndCommunity/ Privaterenting/Tenancies/
Information on the tenant BEFORE the date of the hearing you will not face the penalty. Scotland The legislation for a similar scheme in Scotland is in place, under ‘The Tenancy Deposit Schemes (Scotland) Regulations 2011’. This should come into force this Spring and will mean that any deposit taken on an assured or short assured tenancy on or after that date will require protecting. For existing tenancies which continue to run after the Scottish scheme comes into force, you will have nine months in which to protect the deposit already held.
If you require any help on the above, contact the NLA Advice Line.
One very key point to note! You are no longer able to get possession of your property using Section 21 unless the deposit is protected. IF IT HAPPENS TO YOU! If you are in the unfortunate position of being taken to court over an unprotected deposit, as long as you are able to get the deposit protected and serve the Prescribed
UKLANDLORD JANUARY/FEBRUARY 2012 59
LETTERS & EMAILS Letters to UK Landlord are welcome and should be sent by email to editorial@uklandlord.org.uk or by post to The Editor, UK Landlord magazine, 22-26 Albert Embankment, London SE1 7TJ. Careful checks
The case for EPCs I was somewhat taken aback by the vitriol of Norman Elliott and his rant against Energy Performance Certificates (EPCs) in your last issue. My daughter was about to rent a pretty cottage last Autumn and the letting agent, the largest in Newbury, deliberately hid the EPC. On my advice she requested it and they reluctantly admitted that the EPC was a score of 1, and agreed that over the following 6 months her heating bill would exceed £3,000, nearly doubling the cost of her monthly rent. She declined
the property. There seem to be a number of landlords smugly owning properties with 100% mortgages blissfully unaware of a responsibility to provide houses fit for purpose. I have 10 properties myself and find the EPC invaluable for making improvements in a timely fashion to their energy efficiency mindful of the high number of people living in fuel poverty. If he can’t afford to provide properties to a good standard then respectfully he should leave our industry.
Adrian Foster-Fletcher
EU proposals for Mortgages I refer to the page 14 article in the November/December 2011 edition of UK Landlord magazine re the UIPI (the International Union of Property Owners) in Brussels and note that it is gratifying that UK landlords have a voice in the EU. Assuming that the organisation survives in its present form for a few more years (though I would not place a bet on it), I am keen to know more about the proposed
Directive on BTL Mortgages which, as I understand, would deny lenders the option of relying on rental income for use by prospective borrowers and force them to only take account of other income when assessing suitability of loans. Do the NLA have any up-to-date information on this proposal and especially is it envisaged to apply to existing mortgages?
Anthony Bannister
David Cox, NLA Policy Office responds: The Directive is currently in the European Parliament and British MEPs have tabled amendments that do not necessarily exclude BTL from the Directive but allow rental income to be taken into account when assessing mortgage finance. We do not yet know whether the amendments will be adopted. The UK Government have been making noises about opting-out of the Directive if the amendments do not pass but we will have to wait and see whether these murmurings turn into something more substantial. The NLA is monitoring developments closely, together with the UIPI.
Combi boiler makers Regret I somehow cannot get into the feedback site to respond to comments by Combi boiler makers who chose not to see things a homeowner or landlord might. These include, for example: Pressure increase: Replacing an old installation fed from an expansion or cold water storage tank puts mains pressure into old piping giving rise to possibly a 5-fold pressure increase. Might create leaks and some may be undetected! Buildings Insurance: Increasing pressure in pipes not originally intended to operate at mains pressure which causes leaks could possibly compromise a claim? Parts: Including pumps and diverter valves within the boiler means no choice of alternative replacements which are
e
not necessarily inferior and need a boiler engineer rather than DIY or plumber to change. Breakdowns: Since these complicated boilers are more susceptible to breakdowns it’s regrettable that there is no possibility of immersion heater in system to at least give hot water on boiler failure. Hot water flow rate: Never mind the minute or so wait for hot water to flow. Because of the time needed to heat water as it passes through heat exchanger, baths will be slow to run. Installation: While one might gain space in airing cupboard but a condensing boiler cannot be fitted to a SEduct or Uduct installation very common in flats so pipework etc and new mounting position may be very unsightly or awkward.
I was concerned to see the full-page display advertisement for Dial-ARod’s heating & boiler service cover in the September/October edition of UK Landlord (issue no. 152). Firstly, because the cover offered at the price offered seemed too good to be true, and, as they say, ‘if it seems too good to be true then it probably is (too good to be true)’. Secondly, could this be the same Dial-A-Rod who unblocked a pipe for me, relayed my credit card details back to the ‘office’ and then some months later fraudulently charged my credit card for more than £1000 for work they never did for me? After much wrangling I was reimbursed after suffering the usual stories of ‘we’ll call you back’ and they didn’t, ‘you’ve called the wrong office/the person you want isn’t here’ and so forth. Luckily in this case we were able to establish that the impressive-looking invoice was a total fraud. Clearly, an advertisement in UK Landlord does not imply any recommendation by the National Landlords Association. However anyone contemplating using services or products offered in adverts might want to investigate attractive offers very carefully, and check out the company. For example, look closely to check that addresses given are not fictitious by using Google Maps and Streetview, and also do Internet searches of the company’s name and key words such as ‘fraud’, ‘scam’ or ‘rogue trader’. Rogue traders are very good at changing their registered business names slightly and starting anew to separate themselves from their previous misbehaviours. So I would advise anyone considering doing any business with anyone called Dial A something to proceed carefully. Don’t give out your financial details (especially on their unsecured web pages).
Name and address supplied UK Landlord advertising department: We always carry out a series of checks on any company that advertises their products or services in UK Landlord. We have recently introduced additional checks including credit checks to help protect members’ interests. We also check the advert is, insofar as we are aware, ‘legal, decent, honest and truthful’ in line with the Advertising Standards Authority (ASA) guidelines. Although ‘Caveat Emptor’ (let the buyer beware) is true in respect of any purchase, and whilst an advert in UKL doesn’t imply a recommendation by the NLA or its principals, we recognise there is duty to both the members and the readership of the magazine not to promote any product or service that we know falls outside of the advertising guidelines. On occasion we have declined to accept adverts from companies that we feel don’t meet these guidelines. In response to a number of member complaints about this advertisement we have reviewed our advertising policy and we have also given the advertiser the right to reply to this complaint for the benefit of NLA members. Dial A Rod HomeCover response: We only do work for our homecover customers who pay us between £59.99 and £149.99 to cover their heating and boilers from breakdown. We do not do any reactive emergency work for non-homecover customers and would certainly not charge £1,000 for any works. Any customer buying a homecover with their credit card will have their details destroyed after the transactions.
Note from the Editor: Apologies, the feedback link www.landlords.org.uk/uklandlord is now working! The letters on this page express the views of those who wrote them and the NLA cannot take responsibility for their accuracy or for the views expressed. The Editor reserves the right to amend and shorten any letters or emails received for publication. 60 UKLANDLORD JANUARY/FEBRUARY 2012