A year is a long time in housing with changes to rules, regulations and markets all affecting the landlords ability to provide safe housing and have their business thrive. This coupled with the increasing pressure on tenant finances squeezing their affordability and in some cases to the point where arears are building up. 2017 has seemed like a tough year.
In this article DASH looks at the main events which have influenced the housing market in 2017, and what is in store for the beginning of 2018.
The Housing white paper
Do you remember that? February – it feels like an age ago – the announcement of a government white paper detailing plans on how to fix the housing crisis. Whilst the white paper may not have been the answer to everything it certainly laid down the foundations for discussion and lobbying. For the first time in years housing was at the forefront of UK domestic policy and has remained there all year.
Councils get new powers to tackle rogue landlords
New rules came into force from April 2017 to help crackdown on rogue landlords that flout the rules and improve safety and affordability for renters. Councils are now able to impose fines of up to £30,000 as an alternative to prosecution for a range of housing offences and can now retain all of the income to make sure it is used for private sector housing enforcement purposes.
Rent repayment orders, which can be issued to penalise bad landlords managing or letting unlicensed properties, have also been extended to cover a wider range of situations. These include the illegal evictions or harassment of the occupiers of a property, using violence to secure entry and the breach of a banning order.
Homeless Reduction Bill
2017 was a landmark year for the homelessness sector. The ground-breaking Homeless Reduction Act, championed by MP Bob Blackman and the charity Crisis passed into law. The Act places a legal duty on councils to aid single homeless people who formerly had not been considered a "priority", leaving many to end up sleeping on the street or ‘sofa surfing’.
6-months on from the tragedy that was Grenfell Tower fire, has the horror taught landlords of tenants anything? The study of more that 1,000 tenants in August 2017, commissioned by the British Woodworking Federation and released to mark Fire Door Safety week, showed 55% of tenants do not feel fully prepared on what to do in the event of a fire. Renters also complained about damage to their fire doors - 21% - and just under a fifth said they reported faults or concern to their landlord - but a quarter waited weeks for a response. Research also revealed that 10% of social landlords and 23% of private landlords had been in contact with tenants since the Grenfell disaster to discuss fire safety measures.
As a result of the disaster, a quarter of adults surveyed feel more nervous/anxious about living in a rented apartment since the tragedy and the issues it exposed with regard to fire safety.
Universal Credit (UC)
Pressure grew on the Government over the devastating impact UC was having on millions of people. Widespread evidence showed that thousands of tenants on universal credit were running up rent arrears and debts because they could not manage the minimum 42 day wait for a ‘first payment’. Landlords also criticised the system, with private landlords warning that they would not ‘let to’ claimants of universal credit because of the high risk of rent arrears and problems navigating official bureaucracy.
Tax increases impacting of the PRS
1 in 3 landlords have actively sought to decrease lettings to under 35’s. Of these, 30% indicated that it was because of recent tax changes – according to research by the RLA. Many landlords are not investing or even downsizing, and there has been a significant increase in the numbers switching to short-term holiday lets which are not affected by the mortgage interest changes. The DASH Landlord forums in 2017 heard from MCube accountants on how these changes could have dramatic financial implications for certain landlords in the sector.
Ban on Agent Fees
The government held a consultation on the banning of letting agent fees. The results were published in November 2017. This document sets out the government’s response and proposed approach for implementing the ban on letting fees paid by tenants, which will be taken forward through the draft Tenant Fees Bill.
City of Lincoln Trusted Landlord Scheme launched
In June the first accredited landlord was accepted onto the City Of Lincoln's trusted landlord scheme. Since then over 280 properties have been approved. DASH, the NLA and the University’s own student accreditation scheme support the TLS and passport landlords into the scheme so they can benefit from dual badging.
With more and more councils across the country exploring licensing schemes, this is now becoming much more important to landlords with lots of questions arising. 2017 saw licensing schemes implemented in Nottingham, Ashfield and West Lindsey for the East Midlands area and consultations for Selective licensing in Gedling and Nottingham are going through.
What's coming up for early 2018……
- Banning orders for the most serious and prolific offenders – to be implemented in April 2018. DCLG has just published the outcome of the consultation on proposed banning order offences.
- A database of rogue landlords/letting agents convicted of certain offences – to be implemented in April 2018
- Changes to HMO rules. The government published its response to the consultation on HMO reforms. https://www.gov.uk/government/consultations/houses-in-multiple-occupation-and-residential-property-licensing-reforms In short, it is proposed in England – subject to parliamentary approval to:
- Extend mandatory licensing to all HMOs that are occupied by 5 or more persons in two or more separate households;
- Introduce mandatory conditions in all licensed HMOs concerning minimum sleeping room sizes and maximum number of occupants;
- Introduce a mandatory condition in all licensed HMOs concerning the provision of refuse storage facilities.
- Minimum Energy Efficiency Standards rules. Landlords have less than three months to ensure their rental properties meet the new Minimum Energy Efficiency Standards (MEES). As of April 2018, all buildings within the scope of MEES must have a minimum Energy Performance Certificate rating of E, or they will be illegal to rent out.
- Selective licensing – Nottingham. Feedback from the Secretary of State is imminent as to whether the scheme is approved and is likely to be implemented in early spring. We will keep you updated.