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AS RESIDENTIAL RENTAL INCOME SHOWS SIGNS OF
RECOVERY, BELVOIR SUPPORTS LANDLORDS AND TENANTS
WITH ITS RENTAL RECESSION GUIDE
The last 18 months have seen a big shift in the UK rental market with the amount of
residential properties available for let increasing by a massive 68%.
Belvoir, Britain’s biggest lettings specialist which has an office on Palmerston Road, believes this
flood of new properties coming onto the rental market is the result of homeowners
choosing to let their properties and become ‘accidental’ landlords rather than try and sell
in a depressed housing market.
As the number of properties available to let grew sharply, this was initially matched by a
big increase in the number of people looking to rent as they were unable to raise the
funds necessary to buy their own home. Rental incomes continued to increase until
reaching a peak in June 2008, after which they went into decline as supply started to
outstrip demand.
As well as being caused by the glut of new properties coming onto the market, the
national fall in rental income witnessed in the second half of 2008 (see the Belvoir
Lettings Rental Index attached) was, according to Mike Goddard, Chief Executive of
Belvoir, also due to significant numbers of migrant workers leaving the UK to return
home as a result of the economic down turn.
However Belvoir’s Lettings Rental Index shows that rental incomes are once again on
the up – and have been so since March 2009.
“The turnaround witnessed at the beginning of the second quarter of 2009 is certainly
significant,” says Mike. “Being optimistic, this upturn could be the first signs of ‘normality’
returning to the rental property sector. However, it could also be the result of increasing
numbers of people now choosing to rent rather than buy.”
“Mortgages, which drive the UK housing sales market, remain difficult to come by,
especially for first time buyers and, despite rental incomes dipping in the second half of
2008, the residential lettings market remains robust, driven as it is by tenant demand.”
Belvoir is the UK’s leading lettings specialist and has a network of over 140 franchises
that stretches across the whole of the UK, looking after a property portfolio valued at
more than £1 billion.
As the market continues to evolve and adapt, the company offers the following advice to
homeowners who, because of the recession, have found themselves becoming
‘accidental’ landlords in the past 18 months:
· Be wary of the ‘accidental’ lettings agency – the big rise in rental properties has
resulted in novice letting agents opening up to cash in but it is always best to
seek out a reputable and experienced agent who will know how the market is
evolving and have strong local knowledge allowing them to offer professional and
sound advice to both new and existing landlords
· Ensure that your mortgage lender is aware that your property is going to be let
· Seek professional advice to ensure that you have the right house insurance
policies in place
· Managing your own let can be time consuming and stressful so consider
employing experienced property management specialists who will professionally
reference tenants for your property and manage the tenancy on your behalf.
· Make sure you sign up for a bona fide tenancy deposit protection scheme
· Ensure all required safety checks have been carried out on your property before
it is let (e.g. EPC, CHAS (formerly CORGI) registered etc) – a good lettings and
property management agency will be able to advise on all legal requirements
“The residential rental market remains robust but is evolving in line with prevailing
economic conditions,” explains Goddard. “With our years of experience, market insight,
local knowledge and understanding of an ever changing environment, we at Belvoir are
well placed to ensure that both landlords and tenants continue to enjoy the many
benefits of property rental.”


Some Agents can seriously damage your wealth

All Lettings agents are not the same, this has certainly never been more true than in the current property market. Unfortunately anyone can set themselves up as an agent, there is no licensing of agents and no requirement to have professional indemnity nor clients account protection insurance, there is also no requirement to operate with trained staff who understand the intricacies of the statutory regulations surrounding the letting and management of residential property. Taking those costs out of the equation means that these ‘agents’ can offer ridiculously low headline fees.

A very worrying trend we are seeing is the propensity for Estate Agents – who are certainly feeling the pinch now sales have dried up – to set themselves up as ‘Lettings Agents’. They are entering this market as they are looking for an extra income stream to keep things ticking over until the sales market picks up sometime in the future. However, Estate Agents are sales people, they may be extremely good at what they do, however, they have no need to understand the intricacies of the Housing Act 2004, the Housing Health and Safety Rating System nor the laws regarding how and when a landlord can seek re-possession of a property.

When you appoint an agent any action or inaction of that agent, whether with your knowledge or not will ultimately be your responsibility in law. Should a boiler not be fixed with a certain period of time then a tenant could sue you, if the agent serves the wrong notice or even the right notice at the wrong time, then it will have no effect in law, this could mean you being left with a tenant who is not paying the rent for a considerable amount of time. Saving 1% per month on your management charges will pale into insignificance against such costs.

Remember - do not just base your choice of agent on the headline management rate, always conduct checks into their background before appointing an agent. If the charges look too good to be true – they are!

Your checks should always include the following:

1. Speak to other landlords and tenants, see who they recommend.
2. Check that the agent is a member of a recognised trade body and that they have PI insurance and clients account protection insurance.
3. Check that they are a member of a Tenancy Deposit Scheme.
4. What professional qualifications do they hold?
5. Always check the small print before signing an agency agreement and that ALL possible charges are listed.
6. Check what charges they will be levying against tenants.

For a full appraisal of our services please call us on 023 9273 5863 and talk to any member of our staff.

Should you wish to discuss any aspect of Lettings and Management please email the author on: paul.cartwright@belvoirlettings.com .

Harassment from Landlords
Definition:

This is laid down in The Protection from Eviction Act 1977 and is defined as any act(s) likely to interfere with the peace or comfort of the residential occupier or any members of his or her family, or the persistent withdrawal of services reasonably needed for occupation. Offences under S1(3) can only be committed by the landlord or his agent who intend to cause the person to leave,. There is no requirement to prove that the landlord intended the occupier to leave. Under S1(3A) the same offences can be committed by any person who knows or has reasonable cause to believe that this will make the occupier leave. There is a defence to S1(3A) if a landlord can prove that they had reasonable grounds for carrying out the acts.

Under section 6(2) of the The Criminal Law Act (1977) it is an offence for anyone ‘without lawful authority’ to use, or threaten to use, violence to gain entry to a property where someone is trying to prevent him from doing so.

The Housing Act 1988 introduced the right to civil action for damages in the case of wrongful eviction. This act allows tenants to seek an injunction to restrain a landlord
or to regain possession of a property.

Examples of harassment.

Threat (or implied threat) of violence.
Cutting off the utilities (water/gas/electricity).
Nuisance phone calls
Contacting the tenant at places other than the property (eg at work).
Deliberate noise pollution
Failure to do repairs
Threatening eviction
Interfering with mail

Abandonment

Should a landlord believe that a tenant has left the property it is particularly dangerous to just assume that this is the case. The Housing Act 1988 S5(2) states that a tenancy can only be brought to an end by a court order or by surrender of the property by the tenant. Effort must be made to contact the absent tenant, neighbours talked to – did they see a removals vehicle? It has been known for a landlord to clear out a tenants belongings, change the locks and re-let a property only for the previous tenant to come out of prison 6 months later to find his home and possessions gone. In this case the landlord was prosecuted for illegal eviction!

Advice:

Landlords or agents should never attempt to coerce a tenant to leave a property no matter how bed the provocation. There is only one lawful way to end a tenancy and that is with a court order. It is possible to bring a contract to an end with the agreement of both parties but should you choose to go down this route, and the tenant is agreeable, ensure that you have a signed and dated letter from the tenant stating that he/she wishes to break the contract. In addition, ensure that you have full notes of all conversations, emails and copies of all letters relating to the discussions regarding their vacation of the premises in order to provide proof, should the tenant subsequently claim harassment, that you acted according to the law.

Should a landlord need to visit a property when relations have become strained with the tenant it is always advisable to take along an independent witness in order to be in a position to counter any later spurious claims from the tenant.

Penalties.

Under the Protection from Eviction Act 1977 a landlord could be subject to a penalty of up to a £5000 fine and 6 months in jail at Magistrates Court and an unlimited fine and up to 2 years in jail at Crown Court.

A landlord who faxed a demand to a tenant at his place of work with regard to outstanding rent was successfully sued by the tenant, this cost him £750.

A London landlord removed the personal effect of his tenant in black plastic bags and put them on the pavement, he then changed the locks and waited for the tenant to return. Upon his return he went to the cash point with him – collected his rent and gave the tenant the new key to re-occupy the property. This case (Murray V Aslam) resulted in the landlord being subject to a penalty of £40,263 in fines and damages. Although the majority of the award was set aside later by the Court of Appeal it shows just how seriously these cases are dealt with by the courts.

For a full appraisal of our services please call us on 023 9273 5863 and talk to any member of our staff.

Should you wish to discuss any aspect of Lettings and Management please email the author on: paul.cartwright@belvoirlettings.com .

Real Cases

REGINA -V- GURPHAL SINGH :- The cost of not conforming to Gas Safety Regulations meant that not only did the contractor serve a custodial sentence, so did the landlord and so did his son for not discharging his duty of care to the tenant after one of the tenant died.

REGINA -V- PARKER :- Had this been brought by the Crown Prosecution Service it would probably have been grounds for a custodial sentence. A tenant died from carbon monoxide poisoning. Instead the landlord was fined £32,000 plus £24,861 costs.

MACRAE -V- LONDON BOROUGH OF CAMDEN:- The tenant, a fashion designer, was awarded £170,000 plus £120,000 legal costs for being unable to work as a result of a leaking gas fire.

HARDY -V- MAUD (1995):- The landlord was found to be in breach of repair obligations and was instructed to give 50% of the rent back plus a £3000 disconfort payment fro distress under Section 11 of the Landlord and Tenant Act after the Court upheld that the tenant claim that parts of the property were unusable due to disrepair.

MANSFIELD COUNCIL -V- CARTER (1994):- The landlord had the tenant sign an illegal document agreeing to vacate the property and surrender the tenancy agreement. The local authority had the landlord arrested by the police fro unlawful eviction and re-instated the tenant into the property.

SAXBY -V- McKINLEY:- The tenant was in arrears on the rent so the landlord changed the locks. He knew it was illegal and when instructed by the Court to let the tenant back into the property he ignored the order. He was imprisoned for 28 days for this refusal and for unlawful eviction.