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Newsletter - June 2017

04/06/2017
Emily Brown

 

Tenants On Benefits Refused Housing

According to the survey from a mortgage distributor, increasing numbers of landlords are being told by their lenders that they are not allowed to give tenancies to people on housing benefits.

The market analysis carried out on behalf of an association, found that nearly two thirds of the major buy-to-let lenders who enjoy a 90% share of the market, bar their landlord clients from renting properties covered in their buy-to-let mortgage agreement, to any tenant that claims benefits.

The research investigated 58 lenders’ buy-to-let mortgage policies for a two-bedroom flat with the caveat that the prospective tenants would be claiming housing benefits. The distributor found that out of the 58 lenders around two thirds (38) would not allow the buy-to-let properties to be rented to benefit claimants.

Doug Hall, director of the mortgage distributor, said: “Some of the reasons given for not lending to those renting to claimants include concerns about rent not being paid and historic data which calculate the risk of tenants falling into arrears or facing repossession.”

The association will ask the new government to consider whether they can stop this industry practice by helping landlords.

A spokesperson for the association said: “Discrimination against tenants receiving benefits is not driven by landlords but by the banking system.

“If the private rented sector is to house more people then barriers to landlords making fair decisions over who they rent to must be removed.”

The association wants the government to pay the benefit tenants' rent direct to the landlord.

The spokesperson commented: “We need a system which gives tenants, landlords and lenders the confidence they need that rent will be paid on time and in full".

The government's Universal Credit payments system needs a shake up, we have asked time and time again why can't the government take on the same process as in Northern Ireland and possibly Scotland, whereby tenants on benefits should have their rent paid direct to their landlords?

There is a new fully enhanced digital Universal Credit system that will be rolled out nationwide and from first impressions it does look comprehensive however it does not, at the moment, have any fields that could allow rent payments going direct to landlords.

 

18-39 Yrs Old Private Renting Tenants Have To Share Because Of Wages

According to a Company that offers peer to pay mortgages and investments, renters between the ages of 18 - 39 are finding it nigh impossible to rent their accommodation on their own and have a reasonable lifestyle.

The company's recent rental index highlights the problems that this age group is facing, as they have to give up more than two thirds of their monthly wage just to be able to rent their own solus accommodation.

Those tenants in the age bracket, who are living alone with an average monthly net income of £1,447, pay on average £1,012 in rent.

However if they live with another tenant in a house costing £1,152 in monthly rent between them, will be in the region of 39% of their income for both of them, with three people in a property it comes down to 30% of their monthly wage if the rent is £1,322.

Rent increases have been slower during the last eighteen months, and over the last five years’ rents on average have risen by 9%. The company's April rental index claims that the average monthly rent is now £1,191 per month.

It is little wonder that many of the tenants are unable to save for a deposit for their own home after spending the rest of their wages left on living necessities, travel and sometimes holidays.

John Goodall, CEO and founder of the company, said: “For intermediaries, this generation is the future of their client base, a generation who will face a tough financial journey.

“Whether these millennial tenants are renting as a stepping stone on the way to home ownership – or in some cases choosing to rent for life – this generation are relying on a well-served buy-to-let market to ensure rental growth doesn’t become unbearable.”

Goodall is calling for the incoming government to introduce new measures that will help improve standards, increase the numbers of private rental properties and to make rents more affordable.

He continued: “Institutional investment and the subsequent growth and professionalisation of the private rental sector are already helping control rental growth and improve living standards for renters, so we hope to see some clear plans outlined in this month’s party manifestos ahead of the General Election in June.”

 

Landlord Fined £16,000 For Tenant's Music

Landlord Jason Duffield has been slapped with a £16,000 fine for anti-social behaviour even though it was his tenant who constantly tortured the neighbours by playing excessively loud rave music in 36 hourly shifts.

Duffield's tenant did not bother to stay to face the music and moved out shortly afterwards without leaving any trace of his intended whereabouts. Jason will be launching an appeal against the fine and is desperately trying to contact his ex-tenant.

Jason said: "I honestly can’t put into words how I feel about it. It’s made me sick with worry and I have no idea how I will pay the fine."

Neighbours lives were made hell as they had to complain time after time about the tenant blasting out tunes like Stardust’s Music Sounds Better With You and American Dream by Jakarta for 36 hours at a time.......well there's no accounting for taste.

Duffield lives in Birmingham and has never lived in the property that he rented out in Tamworth, Staffs, and following the court's decision he has sold the house.

Police gave the hapless landlord a restraining order in 2016 because of the excessive noise from the Tamworth property. He was later handed an abatement notice from the North Warwickshire Borough Council.

Finally the council's officials entered the property and seized stereo equipment and televisions, which included some of Duffield's possessions as the property was furnished.

Duffield said: "I will fight it all the way but it’s just so much extra stress. To get blamed for something I have not done is completely crazy.

"Even in court, the solicitors and the people next door said they had not seen me at the house.

"I warned the tenant, who said he does play music but not very loudly. The next thing I knew the police had come in and seized goods from the property."

The Magistrates' Court found Jason guilty of five breaches of the Noise Abatement Notice and was ordered to pay a £10,000 fine as well as £6,000 council's costs together with £170 in surcharges.

The council's assistant chief executive and solicitor Steve Maxey said: "This fine reflects the severity of the offence.

"Jason Duffield repeatedly ignored the warnings from the police and from the council, which not only constituted a flagrant breach of the law but also caused undue distress and upset to his neighbours in Dordon."

 

Labour To Target Rouge Landlords

In its latest manifesto Labour has pledged a “consumer rights revolution” in the private rented sector to introduce a range of new measures of legal minimum standards for rental properties, as tenants have “fewer rights renting a family home than you do buying a fridge-freezer”.

The measures that will be introduced if they win the forthcoming General Election will include new minimum requirements for kitchen, electrical safety and sanitation facilities to make sure that tenants' homes are “fit for human habitation”.

The shadow housing secretary John Healey also announced that those landlords who do not comply with the new regulations could face fines of up to £100,000. He is adamant that the new measures will guarantee that tenants will be able to “call time on bad landlords”.

The Tories have said that the new standards would be in effect be a 'tenants' tax' which is slightly rich, as they themselves have already done this by reducing mortgage interest tax relief and other measures which have and will be forcing landlords to increase rents. It is very unlikely that Labour, if in power, will ever change the stamp duty on second properties and reversing the mortgage interesttax relief changes.

John Healey said: “Our homes are at the centre of our lives, but at the moment renters too often don't have basic consumer rights that we take for granted in other areas.

“In practice, you have fewer rights renting a family home than you do buying a fridge-freezer.

“As a result, too many are forced to put up with unacceptable, unfit and downright dangerous housing.”

Labour said the 2014 English Housing Survey shows England's tenants were paying £800m a month on rent - or £9.6bn a year - for their 'rented homes' that by the previous government's standards were classed as “non-decent”.

Labour also stated that £2.3bn a year was paid by housing benefit.

Healey continued: “Most landlords provide decent homes that tenants are happy with, but these rogue landlords are ripping off both renters and the taxpayer by making billions from rent and housing benefit letting out sub-standard homes.”

Healey finished by saying: “After seven years of failure the Conservatives have no plan to fix the housing crisis”.

History shows that no matter which party gets into power they have and will continue to drive through anti-landlord legislation and measures. This is in spite of their failings to build enough houses and to turn a blind eye to developers' land banks.

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