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Tessa Shepperson Newsround #195 – The Landlord Law Blog

Our weekly news roundup.  What do we have for you?

Has Section 21 abolition been kicked into the long grass?

This is the conclusion of at least two industry specialists.

An article on LandlordZone suggests that this is because it will be tricky to implement.  Plus there have been industry warnings that unless it is done very carefully it will just result in more harm to tenants.

Nigel Lewis on LandlordZone reckons that taking into account the White paper due to be published in ‘the Autumn’ followed by a consultation period, and then draft legislation, the law is unlikely to go on the statute book before late 2022 at the earliest.  There is then likely to be a further delay before it comes into force so we are looking at a very long delay of some three to four years.

As to what the new law will contain, Nigel says

I suspect, as The Law Society has suggested, landlords will have to grant longer contracts, give tenants much longer notice periods when seeking to regain possession and even reimburse tenants should they wish to move back in or sell a property earlier than agreed.

On the other hand, tenants who deliberately dodge paying their rent, make too much noise or sell drugs from their front door, for example, will be ejected much more quickly and cheaply than now.

In a recent training webinar, solicitor David Smith told us that there was no prospect of section 21 reform before 2023, and indeed no guarantee that it will go ahead at all.  He also discussed a few of the other issues raised by the government which will probably crop up in any white paper:

  • Lifetime deposits– something promised by the government a ‘theoretically good but hard to make work in practice’
  • Landlord redress – almost inevitable but then will be tantamount to a landlord register, and
  • ‘Smarter, more enforcement enforcement’ – what does this mean?  Will this mean more funding for enforcement?  Probably not.  It could be code for retaining section 21 but making it conditional upon compliance with more legal obligations.  Or making compliance conditional for section 8 as well.  We shall have to wait and see.

But it does not look as if any of this will be happening any time soon.  Unless something happens to change the government’s mind.

Updated Guidance

The government has updated its online guidance for landlords and tenants, which applies just to England (Wales has its own guidance).

It covers issues that may arise during the current COVID pandemic including what to do if a tenant is struggling with paying rent, advice around carrying out emergency repairs, and information on property viewings and moves within rented accommodation.

You can find it here.

What letting agents can and cannot do

There is new guidance from MHCLG.  The following are recommended

  • Maintain social distancing
  • Wear masks in client homes
  • Virtual viewings recommended
  • Physical viewings limited to essential people only

Propertymark CEO Nathan Emerson said,

Despite the current pressures, these changes should in no way be seen as permission for mass attendance to properties or open house style viewings.

As we follow the governments roadmap, we have a responsibility to ourselves, our staff, and our clients, and need to follow the guidance being given.

Commonhold being considered

A new government created committee, the Commonhold Council, will be considering the introduction of a new form of ownership, commonhold, to replace leasehold, where in recent years there have been problems and indeed scandals with excessive fees.  Housing Secretary Robert Jenrick said

We want to give owners across the country the autonomy they deserve. The new Commonhold Council … will – together with leasehold groups and industry experts – pave the way for homeowners in England to access the benefits that come with greater control over your home.

Commonhold was actually introduced some time ago but has not proved particularly popular.  Maybe the recent problems with leasehold will change things.

The signs of cannabis

An interesting post based on information from Direct Line Business Insurance has given new guidance to help landlords spot cannabis growing (which can cause enormous damage to properties).

It seems that nearly half of investigations into the theft of utilities, where people have tampered with a gas or electricity meter so it doesn’t record the energy usage properly, are suspected to relate to the cultivation or manufacture of illegal drugs.

There has recently been an escalation during lockdown when the chances of being spotted by visitors or passers by was reduced.  The average insurance claim for repair after cannabis cultivation was £9,417 in 2020.  Not something you will want to pay yourself if you are a landlord.  Here are the signs:

  1. Windows and vents sealed or blocked off to prevent heat or the smell of cannabis escaping
  2. Tampering with the electricity meter or wiring
  3. Mould, condensation and excess humidity in a property
  4. The tenant wishes to pay cash upfront for the lease and is keen to discourage any inspections of the property
  5. Fortification of the building, such as an increased number of locks or window bars installed
  6. Noise and light pollution from ventilation fans and lamps
  7. Fertiliser and an excess of gardening equipment for the size of the property’s garden.

So now you know.  Be aware also that many insurance companies will refuse to pay out if the landlord has not carried out regular inspections.

A change in where tenant want to live

A survey of National Residential Landlords Association (NRLA) members, conducted by the research consultancy BVA-BDRC, has found

  • 56% of landlords with properties in central London saw tenant demand fall in the first quarter of 2021 compared to the same period in 2020.  Only 12% reported demand had increased
  • In Outer London, 45% of landlords reported demand having fallen, with 33% saying it had increased
  • Tenant demand was strongest in Wales, with 57% of landlords renting property there having reported an increase over the same period, compared to just 2% who registered a fall in demand
  • landlords renting property in the South West reported a 53% increase in demand, compared to 13% who registered a fall
  • Central and outer London continues to be the only regions where a significant proportion of landlords reported that rents are falling – by 46% and 27% respectively.

Ben Beadle, chief executive of the NRLA, said:

The pandemic has seen a significant shift in where tenants want to rent, with the trend towards home working making inner cities, especially London, far less desirable.

This poses significant challenges in determining where to invest to meet demand. Investors will no doubt be waiting for the market to settle, and the full roadmap out of lockdown to be realised, before making major decisions about where to invest. This will be particularly important as employers make decisions in the coming months about future working patterns.

Snippets

Newsround will be back next week.

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