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Raising Rented Housing Standards in the East Midlands

Landlord ‘Buy-to-Let’ awards 2009: Public Service Winner

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Regional Social Lettings Agency

The East Midlands Lettings & Accreditation Scheme will act in a similar way to commercial lettings agents, offering a competitive management fee to landlords in return for full property management.  The main difference is that tenants will be on housing benefit and the agency will provide a service to mitigate the risk of rent arrears and will be on hand to deal with any tenant issues such as antisocial behaviour.

Operating the Social Lettings Agency regionally will allow a number of local authorities to use the same model promoting closer working, consistency in service provision, financial efficiency and potential for shared services.

The Agency will provide a vehicle by which public money, in the form of the Local Housing Allowance, can be used to provide decent and safe accommodation to vulnerable households whilst providing responsible management.

Visit the Executive Summary [32kb] for more details about the scheme.



New Powers to Conrol High Concentrations of HMO's Announced

Changes to the Planning Use Classes Order to help control the spread of high concentrations of Houses in Multiple Occupation (HMOs) have been announced by John Healy, the Governmnent Housing Minister. The changes will create a new planning use class for HMOs. The changes will require the property owner to obtain planning permission, where a material change of use has occurred, for an HMO of three or more occupants who are not members of the same family and who share basic amenities. The threshold is currently set at six people. These changes are due to come into force in April 2010.

More information is available from the CLG website



Governement Response to the Rugg Review

The Government's response to the Rugg Review was published on 13 May 2009 and sets out their proposals for the reform of the private-rented sector in England.

The 35 page document presents proposals for changes to the way the Private Rented Sector is governed, primarily suggesting that it will introduce both licensing for all private landlords and regulation of all letting agents.

The publication of the Government’s response marks the start of a consultation period for these proposals which will hopefully give rise to a wide-ranging debate about what changes are actually needed to improve and grow the sector.

The closing date for consultation responses in the is 7th August 2009. If you would like your views on the Rugg Review to be included in the East Midlands regional response, then forward your comments to dash@derby.gov.uk.

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Private Rented Sector in the East Midlands ~ Response to the Local Housing Allowance and the Impact of the Economic Downturn

The Private Rented Sector (PRS) currently appears to be weathering the financial downturn well, but there are considerable variations from area to area. Whilst the outlook for the future is generally positive, the increase in new tenants negotiating market rent downwards introduced a note of caution, while some landlords had already noticed the rental decrease affect their income to a tangible degree. The full impact of the current scarcity of credit cannot be predicted at this time and should be reevaluated later in 2009 and possibly again in 2010 and 2011. Many landlords seem to currently have a ‘wait and see’ attitude and are proceeding with business as usual.

Local Housing Allowance (LHA) however, is universally disliked by landlords and agents, and anecdotal evidence suggests some claimants also have a negative view. This is mainly due to monies being received by the tenant directly, and the wider implications of this method of payment. Market forces and choice within the PRS allow those who have the available funds to secure a property that is specified to an acceptable standard, while those in receipt of LHA may be priced out of this market in some areas. Further research is required into the size and effectiveness of the Broad Rental Market Areas and whether or not they accurately reflect local variations in property rental rates.

Anecdotal evidence suggests that some LHA claimants actively seek out the cheapest properties, thereby fuelling the lower end of the rental market with public money, and possibly housing vulnerable people in non-decent, sub standard properties.

There is suggestion that LHA is used to feed drug, alcohol or gambling habits in some circumstances, and this could lead to a myriad of undesirable consequences. Some tenancies that were stable when Housing Benefit was paid have also become unstable under LHA. These trends need to be analysed further as a matter of urgency.

The number of Section 8 notices served appears to be rising. Landlords and agents who previously rented to Housing Benefit claimants have seen arrears and workload increase. Several have already stopped accepting LHA tenants, turning instead to the private rental market. Others have decided to increase deposits for LHA tenants or require a guarantor. Many more are seriously considering these options, potentially reducing LHA claimant choice further over the next 12 to 18 months. This process raises serious questions about not only the location and type of housing available to LHA claimants, but also the amount of relief the PRS will provide to overstretched social housing provisions.

As the Government wishes to increase the number of LHA recipients renting through the PRS, action needs to be taken urgently to mitigate or prevent the undesirable consequences of LHA highlighted in this report.

View the full report [62kb]

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East Midlands Private Rented Sector Landlord Research ~ Local Housing Allowance

This second report in the DASH series researches the broad picture of the Private Rented Sector in the East Midlands, and provides further data to accompany the initial DASH report on the introduction of LHA. A summary of the results is provided for you below.

The results of the survey are both positive and negative. On the positive side, landlords reported relatively low re-let times, some degree of satisfaction with Broad Market Rental Area (BRMA) levels and a healthy student market. 88% of respondents had an occupancy rate of 90% or higher. The outlook for the next 12 months was reasonable, with a widespread expectation of stagnating rental levels, but no suggestion of any imminent collapse in demand or achievable rent. 56% of respondents had no tenants in rental arrears by two months or more.

Less than 10% of respondents were considering withdrawal from Local Housing Allowance (LHA) tenancies within the next 12 months, providing a more positive outlook for LHA than was apparent in earlier DASH research. Added to this, the fall in interest rates has more than offset any stagnation in achievable rent levels for many landlords. However, there are several concerns. If the economic downturn continues, the number of respondents who have at least one tenant in arrears by two months or more can only be expected to increase. Anecdotal evidence suggests that re-let times are increasing and landlords are asking for a larger deposit or guarantor, particularly for LHA claimant tenants, reducing the amount of choice for some LHA recipients. There is concern that the serving of Section 8 notices will increase markedly in the next 12 months. LHA still remains unpopular, with direct payments to tenants receiving criticism, and many respondents stating that they are only continuing with LHA until the economy recovers, as they are concerned about their properties standing empty if they opt out of LHA tenancies in the short term. Nearly a quarter of respondents had previously offered properties to LHA or Housing Benefit claimants and no longer did so.

Landlords' dissatisfaction with their local authority is also highlighted. The main issue appears to be the perceived tenant bias of local authorities and apparent lack of concern or assistance for the landlord. This raises questions over the future of the relationship between local authorities and the private rented sector.

80% of respondents who currently offer property to LHA tenants were not aware of the Rent Service and what role they play in setting BRMA levels, highlighting communication issues between Government and landlords.

View the full report: East Midlands Private Rented Sector Landlord Research [103kb] ~ Local Housing Allowance.

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Attention Landlords!

Would you like to take advantage of DISCOUNTS on a variety of goods and services? Would you like FREE professional development courses and materials to ensure you are fully up to date with developments in the private rented sector? Would you like a FREE central hub of information and advice on matters related to being a landlord? Would you like FREE market advantage?

To provide you with all of the above and more, DASH are delighted to announce the launch of the East Midlands Landlord Accreditation Scheme (EMLAS). This new region-wide scheme is the first of its kind outside London. Its aim is to reward good landlords as well as provide them with professional development, information, standardised forms and guidance on best practice.

Until April 2011, a 3-year membership with EMLAS is FREE to all landlords who have residential property within the East Midlands.

Developed by DASH and its partners, including landlords and landlord associations, EMLAS offers something for everyone. Landlords are able to identify themselves as accredited, thereby gaining market advantage, as well as making use of the discounts, advice, briefings, professional development and standardised paperwork provided by EMLAS. Tenants are able to differentiate accredited and non accredited landlords and make an informed choice about which landlord they wish to let from.

Membership is FREE, so you have much to gain and nothing to lose. For further information on EMLAS, and to take advantage of this very special offer, visit the website at www.EMLAS.org.uk

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Gas Safety in Great Britain has Changed - What Does This Mean For You?

A new gas registration scheme started from 1st April 2009 in England, Scotland and Wales (Great Britain). The new scheme, Gas Safe Register™ is delivered under an agreement with the Health and Safety Executive (HSE) and replaces the CORGI gas register which ends on 31st March. In relation to domestic gas under the Gas Safety (Installation and Use) Regulations 1998, landlords' legal duties apply to a wide range of accommodation, including residential premises provided for rent by private landlords, local authorities, housing associations, housing co-operatives, and hostels.

It remains a legal requirement for all landlords to have an annual safety check on all gas appliances and flues provided in a rental property. However, as from 1st April 2009 a Gas Safe registered engineer, not a CORGI installer, must carry out the safety check.

If you let any properties of this kind, you must now make sure that pipework, appliances and flues provided for tenants are maintained in a safe condition and subject to an annual safety check carried out only by a Gas Safe registered engineer.

In all cases, all gas equipment (including any appliance left by a previous tenant) must be certified as safe or otherwise removed before re-letting. A record of safety checks must be provided to the tenant within 28 days of completing the check, or to each new tenant before they move in. You must also keep a copy of the safety check record for two years.

Gas Safety Certificate

The 'Landlord Gas Safety Record' is often referred to as a 'Gas Safety Certificate' or 'CP12' form. It is quite acceptable to continue to use this style of certificate - even if it has a CORGI logo or the word CORGI on it. There is no requirement for new paperwork. The important change is that from 1st April 2009 is to have a check carried out by a Gas Safe registered engineer.

It shouldn't cost you more to get appliances checked and maintained under the new scheme; the cost of registration is only a small element of the bill you pay. As a minimum, the record of a gas safety check must contain the following information:

All existing gas safety records will be valid until their expiry date (even if that date is later than 1st April 2009). Any gas safety record given to you after 1st April 2009 will only be valid if the engineer is on the Gas Safe Register. There is no dual running of the schemes. CORGI will operate the registration scheme in GB until 31st March 2009 and Gas Safe Register will start on 1st April 2009.

If letting or managing agents are involved

As before, by law you must make sure that the letting or management contract clearly specifies who is to make arrangements for maintenance and safety checks on gas equipment and for keeping associated records. Where specified by the contract, make sure gas appliances and flues are serviced at least once every 12 months or at any other time if there is a safety doubt. We strongly advise that you request to see copies of the maintenance information and safety check from any agent you use to ensure maintenance has been completed by Gas Safe registered engineer.

Always check the ID card

Whatever the letting arrangement, you must always check the engineer's ID card (and details of the type of work that an engineer is registered to carry out) before they begin work on any gas appliances. Please also encourage your tenants to do the same. From 1st April, anyone can find or check a Gas Safe registered engineer 24 hours a day, 7 days a week online at www.GasSafeRegister.co.uk or call 0800 408 5500. You can even get a photo of the engineer with details that tell you if they're qualified to do the job sent to your mobile phone for added peace of mind.

Refused entry

In some cases, there have been problems experienced with engineers refused entry by tenants and subsequent failure for safety checks to take place. Please encourage your tenants to let the Gas Safe registered engineer into the property upon presentation of the ID card.

To help you explain the situation to your tenants, you can download free leaflets from the Gas Safety website or email 'Consumer Leaflet Request' to marketing@GasSafeRegister.co.uk

No to DIY

If you are letting or renting a property, you should never attempt to install or repair a gas appliance yourself in an attempt to save money. This is breaking the law and putting lives at serious risk. HSE gives gas safety a high priority and will take the appropriate action to ensure compliance with the regulations. If your tenants suspect a gas appliance isn't working correctly, ask them to turn it off and report it to you immediately so you can contact a Gas Safe registered engineer for advice. If ever in doubt, call the National Gas Emergency Service on 0800 111 999.

Further advice on landlords' duties is contained in HSE's Guidance to Landlords and Letting Agents found on the HSE's website

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Publication of the Rugg Review

FINAL REPORT, October 2008 EXECUTIVE SUMMARY

October 2008 saw the publication of the long awaited Rugg Review. The report entitled "the Private Rented Sector: its contribution and potential" by Dr Julie Rugg and David Rhodes contains a wealth of information about the size, structure and characteristics of the private rented sector (PRS).

Here is a short summary:

The Nature of the PRS: It's not a single entity, it’s complex and diverse and ranges from upmarket corporate lets to temporary accommodation for asylum seekers.

Significant niches include: students, young professionals, corporate lets, middle aged, middle market renters, housing benefit tenants, slum rentals and asylum seekers.

The Size of the PRS: Private rented housing contains almost 12 per cent of all households and 11 per cent of housing stock. The sector made up only nine per cent of households in 1988. Close to 2.5 million homes in England are currently rented from over 500,000 private landlords.

The sector has expanded rapidly in recent years due to Buy To Let. The sector grew from five per cent to 17 per cent of the UK mortgage market between 2002 and 2007.

The proportion of under-30 households renting has grown to 43 per cent compared with 33 per cent in 2001.

Regulation: Rugg favours introducing a "light touch licensing system for landlords and mandatory regulation for letting agencies, to increase protection for both vulnerable tenants and good landlords".

Landlords would pay an annual licence fee, the proceeds of which would be used to set up a complaints and redress system.

Bad Landlords: Bad landlords will have their licences revoked and will be excluded from the sector if they do not meet statutory requirements on housing management and quality.

Incentives: Rugg proposes tax changes to encourage good landlords, including changes to stamp duty to encourage them to buy more properties.

Build To Let: Rugg is not convinced about the need to change planning laws to encourage institutional investment via build to let, pointing out that it will create rental 'silos' and will make the market more inflexible.

She also worries that large scale institutional investors would be selective in the tenants they accept and may exclude poorer tenants.

Longer Tenancies: Rugg also wonders whether departing from the six-month AST is wise. She concludes that the existing "tenancy framework appears, for the most part, adequate for purpose".

The report calls for a more business-like approach within the sector from landlords, letting agents and managing agents. Part of this will be done through the education of landlords and encouraging them to operate with good business planning.

To grow the sector, Rugg argues that this is not simply a case of encouraging the development of institutional investment but allowing all successful landlords the ability to grow, regardless of their size. Hopefully, the range of measures will help boost the image of the private rented sector and encourage it to grow.

Overall, the report recognises the positive role the vast majority of private landlords play and calls for more support for landlords, compulsory light-touch licensing, tougher enforcement against rogue landlords and strong mandatory licensing for letting agents.

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