Minimum Energy Efficiency Standards for Rented Property

Minimum Energy Efficiency Standards for Rented Property

Overview

The 2015 Energy Efficiency Regulations, passed in March 2015, set out minimum energy efficiency standards (MEES) for England and Wales.

These regulations make it unlawful for landlords to grant a new lease of properties that have an energy performance certificate (EPC) rating below E, from 1 April 2018. The regulations do not affect sales. 
 
The regulations will come into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020. It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches. 

What will the regulations mean for landlords and tenants? 

More control of energy bills and warmer homes

Up to 1 million domestic tenants in the private rented sector may be helped by the regulations, which is likely to grow over time as people move from property to property. The regulations are another way Government is helping consumers take control of energy bills and have warmer, more energy efficient homes.   

Tackling fuel poverty 

Improving the energy efficiency of domestic privately rented property is important in tackling fuel poverty.  Fuel poor households privately renting an F or G EPC rated home would need, on average, to spend around £1,000 more per year on energy to heat their homes properly compared to typical homes. This compares to around £390 for those in EPC bands E and above.  

More energy efficient properties

Investing in their properties will benefit landlords as they will own more energy efficient properties that should be warmer and more attractive to tenants.  

Landlords will be required by law to have improved the energy efficiency rating of the properties they let to at least a Band E from April 2018. However, there should be no upfront costs for them to do this, and the regulations provide safeguards to ensure this is the case.   

Funding improvements

There are a range of funding and financing options, such as Energy Company Obligation and the Green Deal that will help support residential landlords and tenants make improvements before the regulations apply.  Landlords and tenants can find out if they are already eligible for Government support schemes, such as the ECO, by contacting the Energy Saving Advice Service (ESAS) on 0300 123 1234 or visiting www.gov.uk/greendeal.    

What’s more, from April 2016, tenants will be able to request consent from their landlord to make the property they rent more comfortable, and easier and cheaper to keep warm, and the landlord cannot unreasonably refuse.

Prohibition on letting

A domestic private rented sector property is substandard if the EPC rating is F or G, unless an exemption applies. The legislation prohibits a landlord from letting out a substandard property. If there is an EPC in place which shows that the property is an F or G then it must not be let; otherwise the landlord is liable to penalties. This is subject to any available exemptions. 

Energy efficiency improvements must be carried out to bring the property up to an E rating at the minimum, unless one of the exemptions is applicable. In particular, if the work cannot be carried out so as to meet the Green Deal Golden Rule then there is potentially an exemption. Under the Golden Rule there should be no upfront costs (or any net cost to the landlord) because savings resulting from the works should repay their cost over the expected lifetime of the works.

If a landlord lets and continues to let the property in breach of the regulations, however, the breach does not affect the validity or legality of the tenancy itself, so the rent still continues to be payable.

YOUR AGENT comment.

As qualified Energy assessors (both domestic and commercial)  we will work together with all our landlord clients to ensure they are fully compliant with this change in legislation.

Help to Buy ISA deals unveiled

Banks and building societies are offering returns ranging from 0.7% up to 4% on savings in the Help to Buy ISA.

What’s the latest?
First-time buyers saving for a deposit can earn tax-free interest of up to 4% following the launch today of the Help to Buy ISA.

Banks and building societies are still unveiling their rates for the product. But those who have already published them are offering returns ranging from 0.7% to 4%, while the Government will also add a bonus of up to £3,000.

The leading rate for the product will enable people saving to get onto the property ladder to accumulate a £17,500 deposit over five years by setting aside just £200 a month.

Why is this happening?
The scheme is the Government’s flagship initiative to help people who are struggling to get onto the property ladder save money for a deposit.

With the average home now costing more than £186,000, and mortgage lenders still demanding significant deposits, many potential buyers face an uphill struggle to set aside the money required to purchase a property.

The Help to Buy ISA aims to make it easier for people to save the deposit they need.

Who does it affect?
Help to Buy ISAs are obviously good news for first-time buyers. Like conventional ISAs, any interest earned on the money is tax-free.

Potential buyers can save up to £12,000 through the Help to Buy ISA, and the Government will top this up with £50 for every £200 they have saved – the equivalent of a £3,000 bonus.

As a result, people saving as a couple will be able to set aside £24,000 and receive a further £6,000 from the Government, giving them a total deposit of £30,000.

The accounts can be opened by anyone over 16, as long as they have not previously owned a property.

Prime Minister David Cameron said: "My message is clear – if you’re working hard and saving for the future, I don’t just want you to have a roof over your head – I want you to have a roof of your own.

"Thanks to our strong economy and steps this government has already taken, over 230,000 more people have become homeowners since 2010. I want to go further and turn generation rent into generation buy – and today’s announcement is another clear step in us delivering on that commitment."

Sounds interesting. What’s the background?
It is early days for the Help to Buy ISA. Up to 14 banks and building societies will offer the product, but they are still announcing their rates.

Halifax currently leads the field, offering a variable interest rate of 4% on the product. The group claims this return, combined with the Government bonus, will give savers who set aside the maximum £1,200 in the first month and £200 a month thereafter a total of £17,500 after five years. 

And at the other end of the spectrum, Clydesdale Bank and Yorkshire Bank are each offering a rate of 0.7%.

Here are banks and building societies' variable rates on Help to Buy ISA so far:

• Halifax: 4%
• Virgin Money: 3%
• Barclays: 2.27% (available from December 17, 2015)
• Aldermore: 2%
• Bank of Scotland: 2%
• HSBC: 2%
• Lloyds Bank: 2%
• Nationwide Building Society: 2% (it offers up to £1,750 cashback for first-time buyers accessing its Save to Buy mortgage range)
• NatWest: 2%
• Newcastle Building Society: 1.51% (rate includes a 1% bonus on the condition that you make a deposit each and every month)
• Santander: 1.5% (and 2% for 123 World and Select customers)
• Clydesdale Bank: 0.7%
• Yorkshire Bank: 0.7%

Given that the accounts are more akin to regular savings accounts, hpes were for rates closer to some of the very high rates currently available on standard regular saving accounts, to reflect the small amounts being saved. Halifax could well clean up with its market leading 4% rate – double what the majority are currently offering

Having said this, the interest rate is really the icing on the cake. A generous 25% bonus is a great incentive for those who are struggling to find the money to save for a deposit.

Are You Prepared for Right-to-Rent Day?

The UK government has confirmed that all landlords in England will have to check new tenants have the right to live in the UK before renting out their property from February next year.

 
It means that the pilot study on immigration checks which has been ongoing in the West Midlands will now be rolled out across England from February and in other parts of the country at a date yet to be announced.

Under the new rules, landlords who fail to check a potential tenant’s Right to Rent will face penalties of up to £3,000 per tenant.

The Government says that the scheme has been designed to make it straightforward for people to show evidence of their right to rent and a range of commonly available documents can be used, including a UK passport, a European Economic Area passport or identity card, a permanent residence card or travel document showing indefinite leave to remain, a Home Office immigration status document and a certificate of registration or naturalisation as a British citizen.

The checks should be carried out on all new tenants and are backed up by codes of practice, including guidance on avoiding unlawful discrimination, which was drawn up with the assistance of the Human Rights Commission.

Landlords need to check which adult tenants will live in the property as their only or main home and ask tenants for the original documents that show they have the right to be in the UK.

They then need to check the documents are valid with the tenant present, make and keep copies of the documents and record the date the check was made. If a potential tenant has an outstanding immigration application or appeal with the Home Office, landlords can conduct a check on that person’s ‘right to rent’ via the Landlords’ Checking Service.

The Immigration Bill, which is currently passing through Parliament, is likely to introduce even more stringent rules and it will be made it easier and quicker for landlords to evict illegal tenants if they lose their rights or they have no rights to remain in the UK. 

It will also make it a criminal offence to let to illegals, so that so called “rogue landlords” who repeatedly fail to carry out checks and rent to illegals will face not only a criminal record but they will be placed on a blacklist which will prevent them operating a landlording or letting business in the future.


YOUR AGENT will ensure all our landlord clients are fully compliant with the new legislation.

If you are a landlord who does not want to go through this onerous process then why not let YOUR AGENT be your agent? And let us take the hassle out of managing your property.

Legislation Update: Rent Smart Wales launches 23rd November

About Rent Smart Wales

Rent Smart Wales, the brand name for the new registration and licensing requirements under Part 1 of the Housing (Wales) Act 2014 will be launched on 23 November 2015. 
 
Landlords who need to register, and landlords and agents who need to become licensed, will be able to register and apply for a licence from this date. They will have 12 months from 23 November 2015 in which to comply with the new legislation.  During this first year there will be a focus on raising awareness of the new requirements and encouraging compliance. 

Registration

It resembles a policy introduced by the Scottish Government a decade ago. The Welsh Government believes that registration will help to improve standards in the private rented sector by being better able to target criminal landlords. 

What this means for Landlords?

This applies to every landlord who rents properties located in Wales, without exception.  It doesn’t matter whether the landlord lives in Wales or not.  It also applies to landlords who rent properties that are managed by an agent.

For the first time Landlords will have to register thier details with a central ‘Licensing Authority’ and details of all thier rented properties in Wales.

If Landlords don’t comply they will be unable to legally rent thier property and could face a number of penalties including unlimited fines and rent stopping orders.

What do I have to do?

The preferred process for registering will be via a new online portal, although written registrations will also be possible.

Landlords will have to register prescribed personal details, including full name, date of birth, previous names and details of any agent who manages thier property. 

They will also have to register details for each of thier properties.  The cost is TBA, but may be approximately £50 for personal registration and £10 for each property.

Licensing

The Welsh Government believes that national licensing will help to improve standards in the private rented sector by compelling managing landlords and agents to follow a set of conditions and undertake approved training. 

What this means for Landlords?

This applies to every letting and managing agent, and landlord who manages or undertakes maintenance on their property(ies) located in Wales.  It doesn’t matter whether the landlord lives or the agent’s main office/ branch is in Wales or not.

For the first time agents or landlords who manage their properties will have to have a licence.  Landlord who don’t wish to become licensed, or are unsuccessful in obtaining a licence, must then instruct an agent to manage the property on thier  behalf.  Agents that don’t obtain a licence will be unable to trade.  Landlords could face a number of penalties including unlimited fines and rent stopping orders.

What do Landlords have to do?

It has been confirmed that the process for applying for a licence will include personal or business details, including full personal/company name, date of birth, contact details, previous convictions and details of ‘connected persons’ (for agents potentially every member of staff).  Licensees must be: a ‘fit and proper person’, complete a training course, follow a set of TBA conditions and code of practice.  

Landlords and Agents will also have to meet some of this criteria before applying for a licence.  The cost of obtaining a licence is TBA and will be in addition to separate fees for training.  For managing landlords, this will be in addition to registration fees.

Please do not confuse this with Mandatory HMO, Additional HMO or Selective licence.  If landlords require one of these types of licence they shall also require this new national licence as well. 

Your Agent Comment

There will be no need for any of our Landlord clients to undergo the licencing, training or accreditation process. YOUR AGENT will be licenced on your behalf. We will also guide you through the registration processs and ensure you fully comply with the new legislation.

If you are a landlord who does not want to go through this onerous process then why not let YOUR AGENT be your agent? And let us take the hassle out of managing your property.

Where can I find out more?

https://www.rentsmart.gov.wales/en/

Legislation Update: Renting Homes Bill - Model Contracts

Model Contracts

Throughout 2015 the Welsh Government has been consulting and working on a piece of legislation designed to make the process of renting a home simpler and easier to understand. As a part of this process, the Welsh Government wanted to reduce the number of contracts that could be issued to establish a tenancy. What they came up with was a Model Contract that landlords must use when establishing a new tenancy.

The legislation which allows for the Model Contract is the Renting Homes (Wales) Bill, which is currently going through the Welsh Assembly. You may recognise terms from our blog posts such as RHB (Renting Homes Bill) and Model contract, however this piece of legislation (the RHB) allows for much more than just the Model Contract.

What does this mean for Landlords?

Every private sector landlord who rents a residential property in Wales must use the Model contract. It means that when you are setting up a new tenancy, the contract must have certain clauses and conditions set by the Welsh government. You are free to include your own, but they must not clash with or seek to alter any of the Welsh Government fundamental or prescribed terms.

If you carry on using your own contracts and ignoring the Model Contract, or if you don’t issue a contract at all, your contract will be void and the Welsh Government will impose their own ‘Default contract’. This means that the only thing you would be allowed to set is the rent level. After that, if you don’t comply with the requirements, the Welsh Government will set out everything for you.

What will I have to do?

When the RHB passes through the Assembly and the Model Contracts come into force, you will have to ensure that any contract you use is fully compliant.

The Model Contract will, basically, consist of three terms:

• Fundamental
  These terms cannot be changed and must be included within the contract
• Prescribed
  These are a set of terms written by the Welsh government, however you and your tenant must decide whether or not to include them within the contract. If you do include them within the contract, you must only modify them to benefit the tenant. Our advice is that if you are going to include them, don’t modify them.
• Additional
  Here you can include any additional terms you see fit. It comes with a word of warning though, you cannot include terms that impact on any of the Prescribed or Fundamental terms.

Where can I find out more?

At present the RHB is currently at Stage 2 in the Welsh Assembly (4 stages until something is passed) and isn’t expected to pass until later in 2016. Subscribe to ur blog to keep up to date with developments.

If you are a landlord who does not want to go through this onerous process then why not let YOUR AGENT be your agent? And let us take the hassle out of managing your property.

Legislation Update: Renting Homes Bill - Fitness for Human Habitation

Fitness for Human Habitation

As part of the Renting Homes Bill (RHB) the Welsh Government seeks to improve the standard of accommodation in the Private Rented Sector (PRS). In part this is a reaction to some of the very poor accommodation rented out by criminal landlords, however it is likely to also capture a significant number of good landlords.

The Fitness for Human Habitation standard has been based on the 29 hazards under the Housing Health and Safety Rating System, however a number of Assembly Members have insisted that the Fitness for Human Habitation standard goes much further and should be “more ambitious”.

The Communities, Equality and Local Governance Committee suggested, in its report, that they should consider using a model similar to that of the Scottish Repair Standard.

What does this mean for Landlords?

Just like HHSRS you will need to make sure your property complies at the start, during and end of a tenancy. A number of improvements may have to be made, such as the hardwiring of smoke and Carbon Monoxide detectors and any other requirements the Minister sees fit under to tackle the 29 hazards.

What do I have to do?

Right now the RHB (which is the bill that contains the Fitness for Human Habitation requirement) is still going through the process at the Welsh Assembly so no imediate action is require.

Your Agent Comment

This is a key issue and while we want to see standards in the sector improved over time, we do not want end up with unreasonably high standards, that good landlord will spend time and money complying to while the criminal landlords ignores it.

As the RHB progresses through the Welsh Assembly we will continue to send issue updates through our blog.

If you are a landlord who does not want to go through this onerous process then why not let YOUR AGENT be your agent? And let us take the hassle out of managing your property.

Legislation Update: Renting Homes Bill - The 6 Month Moratorium

The 6 month Moratorium

At present, when landlords issue a new contract under an Assured Shorthold Tenancy, they must include a minimum 6 months fixed term. The Welsh government is looking to remove this requirement so landlords do not necessarily need to offer a fixed term, but could start a tenancy on a month-by-month basis.

Although most landlords would probably still issue fixed terms at the start of a tenancy, this barrier is being removed to encourage landlords to rent to vulnerable people that landlords may have previous considered too risky to guarantee a minimum 6 month contract.

What this means for Landlords?

This means that if you so choose, you could rent on a month-by-month basis just like a statuary periodic contract now. This has lots of benefits, such as increased flexibility for those who want a contract shorter than 6 months and encouraging landlords to rent to people they may have previously considered too risky to give a 6 month contract.

What Should I do?

The removal of the 6 month moratorium has caused lots of controversy both among Assembly Members and tenants groups. The fear is that this will lead to less security in the private rented sector and more people being evicted from PRS accommodation after just a few months. .

Your Agent Comment

Our opinion is that most landlords will continue to offer fixed terms and that landlords do not want a high turnover of tenants.

We would strongly advise that normal business practice should be to issue a fixed term, as this guarantees income for the landlord over that period.

If you are a landlord who does not want to go through this onerous process then why not let YOUR AGENT be your agent? And let us take the hassle out of managing your property.

Legislation Update: Renting Homes Bill - Abandonment

Abandonment

Another area being changed in the Renting Homes Bill is the abandonment procedure that landlords follow if they suspect a property has been abandoned. If you have ever been unfortunate enough to have this happen to you, it can be extremely tricky to follow the correct path and seek legal eviction by the court. The Welsh Government wants to make this  process easier to follow so that landlord should feel safer when pursuing possession in cases of abandonment.

So what are they proposing?

The guidance aims to make it possible for landlord to end a contract and regain possession of the property, under cases of abandonment, without the need to go to court. However, you may be required to re-house the tenant should they return up to a year later and could face hefty penalties if you don’t stick to the guidance.

What will you have to do?

Keeping in mind that this dose not yet apply, landlords would be expected to follow the guidance laid out by the Welsh Government. Although the exact guidance isn’t laid out, the Welsh Government has said that this will be highly comprehensive so that landlords feel confident in following the correct procedure.

It is expected that the guidance will involve issuing a formal notice to the tenant (at the property you think they have abandoned), informing them of your intention to recover possession if you don’t hear from them and then giving notice to the contract holder that you are ending the contract. At this point you should be able to recover possession without ever going to court.

Again we would reiterate that this has not yet become law, so evicting for abandonment without a court order at the moment could land you in very hot water. 

Your Agent Comment.

We are concerned that as this policy currently stands, landlord may have to re-house a tenant up to a year after they have recovered possession for abandonment. We believe that if a landlord has followed the Welsh Government’s own guidance on the matter, letter-by-letter, a landlord should not be liable if a tenant returns a year later claiming that they have not abandoned the property.

As the Minister produces more formal guidance, we will keep you informed about the proposals through our updates.

If you are a landlord who does not want to go through this onerous process then why not let YOUR AGENT be your agent? And let us take the hassle out of managing your property.

Deregulation Act 2015 - impact on residential landlords and tenants

The Deregulation Act 2015 (DA) was passed on 26 March 2015 and covers various points which will be of interest to landlords and those appointed to deal with residential properties.

Below is a brief summary of those points and the practical implications. Certain provisions of the DA only apply to property in England ONLY and these provisions have been highlighted accordingly. 

Tenancy Deposit Schemes – provisions in force from 26 March 2015

Since the Tenancy Deposit Scheme (TDS) legislation came into force on 6 April 2007, there have been a number of cases before the courts in which the wording of the legislation has been under scrutiny. The outcome of these cases left landlords taking a cautious approach to the legislation to ensure that they would be able to serve a valid notice to end an assured shorthold tenancy (AST) under section 21 of the Housing Act 1988 (Section 21 notice). 

The DA provides welcome clarification on the steps that a landlord must take to comply with the TDS legislation.

• What happens if the original fixed term was granted prior to 6 April 2007 but a statutory periodic tenancy arose after 6 April 2007? The Court of Appeal decided in the Superstrike Ltd v Rodrigues case in 2013 that, where a fixed term (which was granted prior to 6 April 2007) ends and the tenant continues to rent the property under a statutory periodic tenancy agreement (which arose after 6 April 2007), a "new" tenancy is created. As this new statutory periodic tenancy arose after the TDS legislation came into effect, the deposit must be protected in a TDS and the tenant served with the prescribed information. If the landlord failed to do so, before it could validly serve a Section 21 notice, it would need to return the deposit to the tenant. The landlord could, however, still be liable for a financial penalty for failing to comply with its obligations.  
• What if the original fixed term was granted prior to 6 April 2007 and the statutory periodic tenancy arose before 6 April 2007? This was the situation in the case of Charalambous and another v Maureen Rosairie Ng and another in 2014. The tenants had paid a deposit to the landlord in 2002 and the tenancy was renewed twice. Each time the deposit was carried over to the new tenancy. The fixed term ended on 17 August 2005 and a statutory periodic tenancy arose. The Court of Appeal held that there was no obligation on the landlord to protect the deposit as the deposit was received before the TDS legislation came into force. However, as the legislation provided that no Section 21 notice may be given in relation to a tenancy agreement at a time when the deposit is not being held in a TDS, in order to serve a valid Section 21 notice, the landlord had to either protect the deposit or return it to the tenants.

The DA has clarified what should be done in both of the above situations and gives landlords (in most cases) a period of 90 days from 26 March 2015 to comply with their TDS obligations where, on 26 March 2015 a periodic tenancy is in existence and the landlord is holding a deposit in relation to that tenancy. Steps to protect those deposits must be taken now! 

Where you have a periodic tenancy which arose prior to the 6 April 2007 and the deposit is unprotected, in order to serve a valid Section 21 notice at any point in the future, it must be protected by 23 June 2015 and the prescribed information served on the tenant. However there are no penalties for landlords who choose not to protect these deposits in these circumstances. 

Where the periodic tenancy arose on or after 6 April 2007 and the deposit is unprotected, again the deposit must be protected by 23 June 2015 and the prescribed information served on the tenant. In these circumstances, the financial penalties will apply to any landlords who fail to comply.

What if the fixed term commenced after 6 April 2007, the deposit was protected at that time and a statutory periodic tenancy subsequently arose?

The logical view would be that if a landlord has protected the tenant's deposit in a TDS and served the prescribed information upon commencement of the fixed term tenancy, there would be no need to repeat the procedure in the event that the fixed term came to an end and a statutory periodic tenancy arose. After all, the deposit is being held in a TDS and the tenant has been provided with the required information in respect of this.

However, Deputy District Judge Davies, sitting in Birmingham County Court in the case of Gardner v McCusker in May 2014 interpreted the Court of Appeal's decision in Superstrike v Rodrigues as meaning that where a statutory periodic tenancy arises, the prescribed information has to be served, even in circumstances where this was done in respect of the original fixed term tenancy. This placed an unduly onerous obligation on landlords who have already complied with their obligations. 

Thankfully the DA has addressed this and amended the Housing Act 1988 so that where the landlord has complied with its TDS obligations once; they will not need to repeat them for a replacement/periodic tenancy. 

The Following Regulations apply to ENGLAND ONLY

Retaliatory evictions – Provisions to be in force from 1 October 2015 

The DA introduces new provisions which will come into force on 1 October 2015, to protect tenants from eviction in England only. 

These provisions restrict a landlord's ability to serve a Section 21 notice in circumstances where the tenant has complained about the condition of the premises or the common parts of a building of which the premises form part, and the landlord either did not respond within 14 days, provided an inadequate response or responded by serving a Section 21 notice.
  

The tenant can then complain to the housing authority which may serve various types of enforcement notice on the landlord. If the housing authority does this, the landlord cannot serve a Section 21 notice within six months of the date of service of the enforcement notice (or, if the operation of the notice has been suspended, within six months of the date on which the suspension ends).

Although the provisions state that the tenant's complaint must be in writing, they go on to say that they will still apply if the tenant did not know the landlord's email or postal address or if the tenant made reasonable efforts to contact the landlord to make the complaint, but was unable to do so. Landlords should, therefore, ensure that tenants have adequate means of contacting them.

There are various circumstances in which a tenant will not be assisted by the new provisions, including:

• where the condition of the dwelling house or common parts which gave rise to the service of the notice is due to a breach of the tenant's duty to use the premises in a tenant like manner;
• where, at the time of service of the Section 21 notice, the dwelling house is genuinely on the market for sale;
• where the landlord is a private registered provider of social housing; and
• where the dwelling house is subject to a mortgage which was granted before the beginning of the tenancy, the mortgagee (which includes a receiver appointed by the mortgagee under the terms of the mortgage or in accordance with the LPA 1925) is entitled to exercise a power of sale under the mortgage or under section 101 of the LPA 1925, and at the time the Section 21 notice is given the mortgagee requires possession of the dwelling house for the purpose of disposing of it with vacant possession in exercise of that power.

These new provisions will apply to ASTs granted on or after 1 October 2015. They will not apply to a fixed term AST granted prior to that date even if, after 1 October 2015, the fixed term AST becomes a statutory periodic tenancy. The position changes, however, after the end of the period of three years, at which point the provisions will apply to any AST in existence. 

Practically this raises a number of points for landlords and fixed charge receivers:

• The importance of adequately responding to any complaints about maintenance or the condition of the property from the tenant within 14 days;
• Before serving a Section 21 notice, consider why it is being served. If the strategy is to recover possession in order for the lender to exercise a power of sale, this strategy should be confirmed in writing before service of the Section 21 notice.

Section 21 Notices – Provisions in force from 1 July and 1 October 2015

The DA tidies up various aspects of the procedure whereby a landlord obtains possession under Section 21 of the Housing Act 1988.

From 1 July 2015 in England

• The Secretary of State will be able to make regulations prescribing the form of Section 21 notice to be served. Once these regulations have been passed, the procedure for serving a Section 21 notice should be much simpler and clearer.
• A landlord will not be able to serve a Section 21 notice if the landlord is in breach of a "prescribed requirement". The prescribed requirements will be set out in regulations and will relate to the condition of dwelling houses and their common parts, the health and safety of occupiers of dwelling houses, and the energy performance of dwelling houses. As such, they could be quite wide and may impose onerous obligations on landlords to ensure compliance prior to serving a notice.
• The Secretary of State will be able to make regulations requiring a landlord to provide prescribed information about the rights and responsibilities of the landlord and tenant under the AST. The landlord will not be able to serve a Section 21 notice if it is in breach of this requirement.

From 1 October 2015 in England

• There will be no requirement for the date specified in the Section 21 notice to be the last day of a period of the tenancy.
• A landlord will not be able to serve a Section 21 notice within the first four months of the tenancy. This will, therefore, limit the landlord's ability to serve notice at the start of the AST.
• There will be a statutory right for the tenant to claim back rent paid in advance (calculated on a daily basis) where a Section 21 notice brings the tenancy to an end before the end of a payment period.

The new rules will apply to ASTs granted on or after the date on which the relevant provision (as set out above) comes into force. They will not apply to a fixed term AST granted prior to that date even if, after the relevant date, the fixed term AST becomes a statutory periodic tenancy. 

The position changes, however, (in respect of all of the above provisions except the requirement for the landlord to provide prescribed information about the rights and responsibilities of the landlord and tenant under the AST) after the end of the period of three years from the date on which the provision came into force, at which point it applies to any AST in existence.

Legislation Update: Renting Homes Bill - Retaliatory Eviction

Retaliatory Eviction

Retaliatory Eviction, or Revenge Eviction (sometimes shortened to RE) is the practice where a landlord would evict a tenant simply because they have made a legitimate repair complaint that the landlord does not want to oblige by. 

The practice is already illegal under consumer law, however the Welsh Government are planning to formally outlaw the practice in the Renting Homes Bill.

England & Wales

If you have properties in England, Retaliatory Eviction has already been made illegal under the Deregulation Act 2015, however this Act does NOT APPLY IN WALES.

What does this mean for Landlords?

This policy will apply to every landlord who seeks to evict a tenant, you cannot and should not evict a tenant simply because that have made a legitimate complaint against the property. This measure is designed to target the criminal landlord who keep tenants in squalor and evict those who ask for basic repairs.

So what should you do?

At present this hasn’t come into force yet, however the best way to protect yourself against future unscrupulous claims is to keep a constant log of every complaint that a tenant has made and what has been done in relation to that complaint. In the future you may have to prove to the court that you are not evicting just because a complaint has been made.

YOUR AGENT Comment.

Tenants could keep making complaints, month after month, to avoid eviction. We do not support the practice of retaliatory eviction, however we do not want to see this policy become used as a weapon against good landlords, by tenants doing everything they can to avoid eviction.


If you are a landlord who does not want to go through this onerous process then why not let YOUR AGENT be your agent? And let us take the hassle out of managing your property.

Legislation Update: Renting Homes Bill

OVERVIEW

In 2006 the Law Commission began to look into the way tenancy contracts are issued and the legal complications around them. They concluded that the law surrounding tenancy agreements was far too complicated for tenants, and perhaps some landlords, to fully understand.

The Welsh Government decided to act on the work by the Law Commission and began setting out to completely overhaul the way contracts are issued. The Renting Homes Bill (commonly referred to as RHB) doesn’t stop at the contracts, it includes a number of other changes to the way landlords operate, such as:-

• Retaliatory Eviction 
• Abandonment
• The 6 month Moratorium
• Fitness for Human Habitation  
• Model Contracts

The Renting Homes Bill is still making its way through the assembly and isn’t expected to be passed until 2016. 

We will bring you more informaion as and when it becomes available.

Important Legislation Update

Registration

The Welsh Government is set to enact this policy following the passage of the Housing (Wales) Act 2014 in the National Assembly for Wales.  The official branding is ‘Rent Smart Wales’.  

It resembles a policy introduced by the Scottish Government a decade ago. The Welsh Government believes that registration will help to improve standards in the private rented sector by being better able to target criminal landlords. 

What this means for Landlords?

This applies to every landlord who rents properties located in Wales, without exception.  It doesn’t matter whether the landlord lives in Wales or not.  It also applies to landlords who rent properties that are managed by an agent.

For the first time you will have to register your details with a central ‘Licensing Authority’ and details of all your rented properties in Wales.

If you don’t comply you will be unable to legally rent your property.  You could face a number of penalties including unlimited fines and rent stopping orders.

What do I have to do?

The Welsh Government is set to announce details the practical details in due course.  It is likely that you will be able to register from Autumn 2015 and that you will have up to one year to comply before full enforcement begins.  The preferred process for registering will be via a new online portal, although written registrations will also be possible.

It has been confirmed that you will have to register prescribed personal details, including full name, date of birth, previous names and details of any agent who manages your property. 

You will also have to register details for each of your properties.  The cost is TBA, but may be approximately £50 for your personal registration and £10 for each property.

Licensing

The Welsh Government is set to enact this policy following the passing of the Housing (Wales) Act 2014 in the National Assembly for Wales.  The official branding is ‘Rent Smart Wales’  

The Welsh Government believes that national licensing will help to improve standards in the private rented sector by compelling managing landlords and agents to follow a set of conditions and undertake approved training. 

What this means for Landlords?

This applies to every letting and managing agent, and landlord who manages or undertakes maintenance on their property(ies) located in Wales.  It doesn’t matter whether the landlord lives or the agent’s main office/ branch is in Wales or not.

For the first time agents or landlords who manage their properties will have to have a licence.  If you are a landlord and don’t wish to become licensed, or are unsuccessful in obtaining a licence, then an agent must manage the property on your behalf.  Agents that don’t obtain a licence will be unable to trade.  You could face a number of penalties including unlimited fines and rent stopping orders.

What do I have to do?

The Welsh Government is set to announce the practical details in due course, and much is still unconfirmed.  You will be able to apply for a licence from Autumn 2015 and will have up to one year to comply before full enforcement begins.  The preferred process for submitting an application will be via a new online portal, although written submissions will also be possible.

It has been confirmed that in applying for a licence you must include personal or business details, including full personal/company name, date of birth, contact details, previous convictions and details of ‘connected persons’ (for agents potentially every member of staff).  Licensees must be: a ‘fit and proper person’, complete a training course, follow a set of TBA conditions and code of practice.  

You will also have to meet some of this criteria before applying for a licence.  The cost is TBA, but may be approximately £100 to obtain licence in addition to separate fees for training.  For managing landlords, this will be in addition to registration fees.

Please do not confuse this with Mandatory HMO, Additional HMO or Selective licence.  If you require one of these types of licence you shall also require this new national licence as well. 

Your Agent Comment

There will be no need for any of our Landlord clients to undergo this licencing, training or accreditation process. YOUR AGENT will be licenced on their behalf. We will also guide you through the registration processs and ensure you fully comply with the new legislation.

If you are a landlord who does not want to go through this onerous process then why not let YOUR AGENT be your agent? And let us take the hassle out of managing your property.

Where can I find out more?

https://www.rentsmart.gov.wales/en/

Mortgage lending hits eight-year high

Mortgage lending hit an eight-year high in August as the housing market continued to recover, figures showed today.

A total of £20bn was advanced during the month, the highest total for August since 2007, and 12 per cent above the amount lent in the same month of 2014, according to the Council of Mortgage Lenders (CML).

But there was a slight dip in lending levels compared with the previous month, when £21.7bn was advanced, as the market experienced its traditional August lull.

Bob Pannell, CML chief economist, said: “Mortgage lending is currently enjoying its best spell since 2008, on the back of a pick-up in house purchase and remortgage activity over the summer months. 

“August’s lending of £20bn marks the third month in a row of strong year-on-year growth and is the highest August figure since 2007.

“We expect further modest growth for the rest of the year, although affordability pressures are likely to limit gains for first-time buyers and home movers.”

The mortgage market is currently enjoying a boost from the return of both buyers and existing homeowners who are remortgaging.

Many potential buyers, who sat on their hands due to the uncertainty caused in the run up to May’s General Election, have since returned to the market.

At the same time, there has been a surge in the number of people remortgaging following warnings by Bank of England Governor Mark Carney that interest rates could start rising at the turn of the year.

Figures released by the CML earlier in the week showed a 34 per cent year-on-year jump in the number of people switching loans as homeowners look to lock into the current competitive rates on offer.

The group pointed out that remortgage and buy-to-let lending was improving more strongly than advances to people buying their own home.

A recovery in sales levels is being constrained by a shortage of homes on the market, which is continuing to put upward pressure on prices.

The Royal Institution of Chartered Surveyors (RICS) recently warned that while new buyer enquiries increased for the fifth month in a row in August, the number of homes being put up for sale remained at record low levels.

Affordability pressures are also likely to be having an impact on transaction volumes.
The average UK home currently costs 5.34 times average earnings, according to mortgage lender Halifax.

This is the highest level since March 2008, shortly after the housing market correction began.

Half of landlords affected by removal of wear and tear allowance

Almost half (47 per cent) of landlords will be affected by the removal of the annual wear and tear allowance, according to new findings from the National Landlords Association (NLA).

The research findings show that a quarter of landlords (24 per cent) let their properties fully furnished, with 22 per cent letting a mixture of furnished and unfurnished properties. Just over half of landlords (53 per cent) let their properties on an unfurnished basis.

The news comes shortly after the government announced its intention to scrap the annual wear and tear allowance – which is only available for furnished properties – and replace it with a tax relief system that enables all landlords to deduct the costs they actually incur on replacing furnishings in the property.

The new system, currently under consultation until the 9th of October 2015, will apply from 6 April 2016 for Income Tax purposes and 1 April 2016 for Corporation Tax, and will cover the cost of replacement furniture, furnishings, appliances and kitchenware provided for tenants including:

Movable furniture and furnishings
Televisions
Fridges/freezers
Carpets and flooring
CurtainsLinen
Crockery or cutlery

Chris Norris, Head of Policy at the National Landlords Association said:“We fully understand the frustration of those landlords who let exclusively on a furnished basis as the removal of this allowance will very likely represent a reduction in the relief they can claim.

“However, it will come as a welcome revision for those letting a mixed portfolio, unfurnished, or part-furnished property as the replacement system will allow them to deduct legitimate revenue expenses in the future.

“The NLA has broadly welcomed these proposals as it should lead to a fairer system for more landlords. However, as we transition from one system to another, we will push to make sure that any landlords who’ve made recent investments with the expectation of offsetting the cost over a number of years using the current allowance, will not be disadvantaged”.

New law means Wales is first part of UK to introduce training for landlords and agents

Rent Smart Wales. A new law that is being introduced this autumn which will affect all private sector landlords and housing agents in Wales.
 
Everyone who owns and rents out private property in Wales will have to register with a central licensing authority and obtain a new type of licence under a new law from this autumn.

It means that Wales will become the first part of the UK where managing landlords and agents will need to undertake training to ensure they are aware of their rights and responsibilities.

The new Rent Smart Wales scheme aims to raise standards in the private rented sector and will replace the existing voluntary Landlord Accreditation Wales scheme, which has been operated by Cardiff Council on behalf of all local authorities in Wales.

It is intended that the new legislation will also result in raised awareness by landlords and agents of their respective rights and responsibilities and in turn, raised awareness by tenants of their respective rights and responsibilities.

All private landlords who have a rental property in Wales must register themselves and the addresses of their rental properties in Wales and those who undertake defined letting or property management activities at a rental property in Wales must apply for a licence. 

If a landlord instructs an agent to do such work on their behalf, it is that agent who must become licensed and in order to get a licence a person must be adequately trained, and also declare themselves ‘fit and proper’.

Licensing training will be offered through Rent Smart Wales or people can choose to attend Rent Smart Wales approved training courses delivered by other bodies.

The Welsh minister with responsibility for housing, Lesley Griffiths, is encouraging landlords and agents to subscribe for important news and information ahead of the changes.

‘We know approximately 184,000 homes in Wales, around one in seven, are now privately rented. With so many people renting, a strong sector with good working practices is absolutely essential,’ she said.

‘The new legislation we are introducing will not only improve the situation for tenants, informing them of their rights and responsibilities, it will also help good landlords by improving the sector’s reputation,’ she explained.

‘When Rent Smart Wales is introduced this autumn, it will provide a simple way for landlords to register and for them and their agents to become licensed. Ahead of the changes, I encourage landlords and agents to subscribe to register their interest and to receive useful news and updates,’ she added.

Cardiff Council, which currently operates the existing voluntary Landlord Accreditation Wales scheme, will be the licensing authority for the new statutory scheme, Rent Smart Wales, on behalf of all local authorities.

‘The scheme demonstrates the value of training and the development of positive relationships with landlords based on a better understanding of responsibilities and the potential risks of getting things wrong,’ said Bob Derbyshire, Cardiff Council cabinet member for the environment.
 
‘Rent Smart Wales is the next step, building on this early success, and provides an exciting opportunity for Wales to lead the way in professionalising the private rented sector through focusing on supporting landlords to get things right first time,’ he pointed out.

‘Centralised administration at Cardiff Council will deliver a consistent service across Wales and also provide the opportunity to establish a simple application process and reduce costs for customers,’ he added.

 At YOUR AGENT we've got you covered. Ciontact us today to find out how we can help you comply with the new legislation and take the stress out of managing your property.

Mortgage lending soars to seven-year high

Mortgage lending soared to a seven-year high in July as the housing market continued to gain momentum, figures showed today. 

A total of £22bn was advanced during the month, the highest level since July 2008, according to the Council of Mortgage Lenders (CML).

The group said the figure, which was also 9 per cent above lending in June, was in line with its expectations that mortgage advances would strengthen during the second half of 2015, following a subdued start to the year.

Activity in the housing market was muted in the run up to May’s General Election as many potential buyers adopted a ‘wait and see approach’, but it has bounced back following the Conservative victory.

A CML economist, said: “We expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers. 

“Today’s data is in line with our forecast that gross lending will rise to £209bn this year, 3 per cent higher than in 2014.”

Meanwhile, Government figures also released today showed a fall in the number of new build homes being built.

Only 33,280 new properties were started in England during the three months to the end of June, 14 per cent fewer than in the first quarter of the year and 6 per cent down on the same period of 2014.

Within the total, the number of private homes being built dropped by 12 per cent quarter-on-quarter, while housing association starts dived by 23 per cent.

Fix your mortgage rate, homeowners warned

Homeowners considering remortgaging were today urged to move fast as fixed rate mortgages start to nudge higher.

High street lenders have increased the cost of 36 mortgage deals during the past month, compared to rises on just six products in January, as they prepare for a rise in the official cost of borrowing.

Increases have been made by a number of major banks, including Lloyds, Halifax, first direct and Santander, while other groups have withdrawn some deals completely.

The price hikes have led to the average cost of a two-year fixed rate mortgage for borrowers with a 40 per cent deposit rising to 1.86 per cent, up from 1.81 per cent at the beginning of July, according to financial information group Moneyfacts.

Typical prices on five-year deals for people borrowing up to 60 per cent of their property’s value have also risen, to stand at 2.59 per cent, compared with 2.54 per cent a month ago.

The group said it was the first increase in the average rate charged to borrowers with a large deposit for 12 months.

The rise in mortgage rates comes as little surprise, after Bank of England governor Mark Carney recently warned that the Bank Rate could start to increase at the turn of the year.

Today’s news on mortgages comes as the Bank’s Monetary Policy Committee begins its two-day interest rate-setting meeting.

Commentators have predicted that up to three members of the committee could vote for a rate hike this month, although the majority of the committee is expected to vote to keep interest rates on hold at their current record low of 0.5 per cent.

One pundit, urged any borrowers who were still sitting on their lender’s standard variable rate to move fast and remortgage before the cost of fixed rate deals rose further.

Saying: “People with higher loan to value mortgages need to try to fix onto a good rate now.
“Mortgages that are seen to be more high risk will be the ones lenders look to re-price first.”

But added that while lenders had increased rates on 36 mortgages during the past month, some had continued to cut the cost of their loans, and there were still good deals available.

A 0.25 per cent increase in the Bank Rate would increase repayments on a variable rate £150,000 mortgage by around £17 a month or £204 a year.

But in his recent speech Carney implied the Bank Rate could be increased to 2.25 per cent over the medium term.

A hike of this level would cost households with a £150,000 mortgage an extra £126 a month or £1,512 a year.

Remortgage levels jump by a third in June

Remortgage levels soared by a third in June as homeowners looked to lock into low interest rates before borrowing costs start to rise, figures showed today.

The number of approvals for people remortgaging jumped to 23,985 during the month, the highest level since August 2011 and up from 18,137 in June last year, according to the British Bankers’ Association (BBA).

There was also a 6 per cent rise in pipeline loans for people buying a property, with 44,488 mortgages approved for house purchase.

The BBA said some of the year-on-year gain was due to the slowdown in the mortgage market seen in June last year, as lenders adapted to the tougher new affordability criteria introduced under the Mortgage Market Review.

But it added that once the impact of the change in the rules had been factored in, total mortgage approvals were still 8 per cent higher than they had been in the same month of 2014.

There was also a 4 per cent month-on-month increase in the number of loans approved for house purchase, in a further sign that the property market is picking up steam following the General Election.

Richard Woolhouse, chief economist at the BBA, said: “The housing market is beginning to hot up again, as we’ve seen a pick-up in the number of mortgage approvals for the last month.

“Interestingly, we’ve also seen an increase in the number of people remortgaging, which could be down to savvy borrowers taking advantage of competitive deals on fixed rate mortgages ahead of a possible rise in interest rates.”

Today’s figures predate a recent speech by Bank of England governor Mark Carney, in which he warned the official cost of borrowing could start to increase at the turn of the year.

He also suggested that over the medium term, the Bank Rate was likely to rise to around 2.25 per cent.

Total mortgage advances reached £11.6bn in June, up on both £10.7bn in May and the £10.2bn lent in June last year, the BBA figures showed.

Net lending, which strips out repayments and people switching to a new deal, reached £1.2bn, unchanged from May but significantly higher than the £811m seen in June last year.

Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The latest statistics from the BBA showing that mortgage approvals are on the rise is great news for the market and borrowers alike.

“This rise is partly fuelled by record-low mortgage deals: the average two-year fixed rate mortgage has fallen from 3.67 per cent a year ago to 2.75 per cent today, and borrowers are clearly taking advantage of these low rates to secure lower monthly repayments.

“However, with Mark Carney’s announcement that Bank Rate is likely to rise in the near future, these low rates will not be around for long.”