If you are a landlord in England or Wales you will already know that once you take a deposit from a tenant you must by law place it in a deposit protection scheme within thirty days. You must also give your tenants information about the scheme that you chose, and provide them with a copy of the paperwork, or you could be eligible to pay a fine of up to three times the amount of the original deposit. Continue reading
Yesterday we published an article discussing how housing associations across the UK are planning on working with their tenants in order to improve quality of life, such as Coastline Housing in Cornwall who is making sure that their buildings are well ventilated in order to prevent health issues such as eczema and asthma. Now, River Clyde Homes in Scotland is planning on holding a meeting so that all their tenants can put forward their concerns about rent increases and what they would like to see money being invested in.
From Wednesday 30th of January to Saturday the 2nd of February, meetings will be held at the former Millets shop in the Oak Mall, Greenock, and will then move on to Port Glasgow to the 7½ John Wood Street Centre on Tuesday the 5th of February. Recently appointed chief executive at River Clyde Homes said: “River Clyde Homes has done a good job over the last five years in some challenging circumstances. Over half of our homes now meet the Scottish Quality Housing Standard and hundreds of impressive new homes have been built across Inverclyde despite the economic downturn.”
“However, much work remains to be done. We also know we can improve our services. The challenge for us now is to ensure that we provide our customers with the standard of services they want at a price they can afford. The rent consultation is the start of a process to get the views of our customers on progress at River Clyde Homes so far and what services and priorities for investment they would like to see in the future.”
Customers of River Clyde Homes will be able to fill out a feedback form which will address various aspects of the service, all of which will also be entered into a prize draw where residents can win one of two £50 Tesco vouchers. In the last five years River Clyde Homes have kept their rent prices stable, however with the introduction of the new welfare reforms this may change. Private rented sector landlords have already protected themselves from the expected increase in rent arrears by investing in landlord insurance, however social housing landlords are finding that having discussions with their tenants is also beneficial.
The results from the 2011 Scottish National Census have shown that the population of the country is at its highest ever. On census day (27th March 2011), the population of Scotland was recorded as 5,295,000, which is a five per cent increase since 2001, and the highest rise in population between two Scottish censuses in the past century.
The figures were released in terms of the amount of population in general as well as divided into sex and age brackets. For example, the Scottish public is now made up of 2,728,000 women and 2,567,000 men, whilst the number of people aged over sixty five in Scotland has risen by eighty five thousand (eleven per cent) since 2001. Furthermore, for the first time ever the number of people over sixty five in Scotland is higher than the amount of the population that is under fifteen, meaning that the over sixty fives now make up seventeen per cent of the whole country.
The results show that Scotland has an ageing population, especially as the number of children that are between five and fourteen has decreased by 69,000 (eleven per cent), whilst those that are over eighty has increased from 193,000 in 2001, to 230,000. Culture Secretary Fiona Hyslop has commented on the results stating that, “In common with every mature economy, we have an aging population, but these figures also show that the under-fives population is up by 6% compared with 2001.”
The census has also shown that there is a huge difference in population density across the country, with cities like Glasgow having over three thousand people per square metre, whereas the Highlands only has nine. Audrey Robertson , Acting Registrar General, said “these first results from the Census confirm the upward trend in the size of Scotland’s population in recent years. At 5,295,000, the population is now the highest ever recorded. This is partly because there have been more births than deaths, but mainly because more people have moved to Scotland than left.”
This increase in migration to Scotland will mean that those that own property in busy cities such as Glasgow and Edinburgh will be benefiting from an increasing demand for housing. It is important for those that want to take advantage of the increase in population to make sure their properties are up to scratch and are covered by adequate landlords insurance.
Students entering rented accommodation for the first time this year will be among the first to benefit from a new scheme which it is hoped will end the large number of disputes over deposits.
In the past, generations of students have found to their cost that when a deposit on rented accommodation is paid before moving in, there is no guarantee of getting it back when moving out. However, students renting properties this academic year are going to be among the guinea pigs for Scotland’s new tenancy deposit scheme. If there are any disputes over the return of deposits when the tenancy ends next summer, the dispute will be settled independently. The new scheme started in July and landlords have until November to comply.
Experts now believe that the days of arguments over deposits will be over which is good news for the estimated 11,000 tenants who have all or part of their deposits withheld each year. The scheme will also be welcomed by landlords who in the past have had to claim on their landlord insurance because of damage caused to the property by tenants and then faced months of wrangling with solicitors over withheld deposits.
Under the new scheme, both landlords and letting agents will be obliged to lodge a tenant’s deposit with an approved third-party scheme. They must then provide the tenant with confirmation plus proof of registration with their local authority at the time of paying the deposit. For the duration of the tenancy the money will be kept in an account set up specifically for the deposit.
The TDS (Tenancy Deposit Scheme) undoubtedly gives students better protection, although there are some concerns that the success of the scheme may be undermined by low awareness of it. Research has shown that the majority of private landlords are taking the scheme seriously and have already registered.
Julie Grieve, managing director at Braemore Property Management, said: “Students must check that their landlord is appropriately registered and that their deposit will go to an approved scheme under the new tenancy deposit scheme rules. Too often they are simply in a hurry to get the keys and don’t do the required homework.”
Warnings that many Scottish letting agents are going to go bust due to the new tenancy deposit law are getting stronger as the autumn deadline approaches, and if the worst happens some industry experts are forecasting a £50 million black hole in tenant deposits leaving private landlords legally accountable.
It has already been reported that a record number of letting agents in Scotland are trying to sell up in advance of the November deadline that will require them to place all tenants’ deposit money in a custodial scheme. The latest warning is the most serious yet, and the dire forecast is that the new law may have the opposite effect to what was intended. The result could be that many letting agents will go out of business, taking with them huge amounts of tenancy deposit money and landlords are being warned that in some cases their landlord insurance will not mean that the deposits are protected.
This will then have a substantial knock-on effect for private landlords, who will be forced to find the money for their tenants from their own savings. In the last week some private landlords have reported that letting agents have simply disappeared while there are some forecasts that in the next twelve months, half of all Scottish letting agents will have gone out of business. Any private landlord with a property in Scotland and where the agent has taken a deposit is urged to act now to clarify exactly where the deposits are being held and to take steps to make sure that it is properly protected.
Peter Grant, managing director of VTUK, said “Many Scottish agents have used tenants’ deposits for their own businesses’ working capital requirements. The clock is now ticking and agents have until November 2nd to find the finance required in order to place deposits into one of the three approved schemes. Given current economic conditions and the restrictions banks are placing on lending, there is a real danger that many agents simply won’t find the money and will go out of business, leaving landlords and tenants significantly out of pocket. It was stated at the debate that Scottish agents could potentially have a collective £30m-£50m hole in their accounts, which really demonstrates the extent of this problem.”
Property investors in Scotland holding landlord insurance policies are being urged to prepare for July 2nd when a big change in how tenant deposits are handled will come into force.
From July 2012 landlords must transfer tenant deposits to a licensed third party who will hold the deposit until a tenants contractual agreement comes to an end. The scheme has already been rolled out in other parts of the UK, and the great majority of people connected with the private rental sector in Scotland believe the scheme will improve landlord/tenant relations.
It has long been a bone of contention for many tenant and student organisations that private landlords are notoriously reluctant to return deposits at the end of tenure, while landlords say the deposit is only withheld if there has been damage caused to their property. In future the deposit holders will keep hold of the money until disputes between tenant and landlord have been resolved. New operators of the scheme are now springing up although it is difficult to get a licence. SafeDeposits Scotland is one of the new licence holders and is an amalgamation of Scottish landlords, tenants and letting agents. The not-for-profit organisation is backed by experts from England and has already formed a charitable organisation to run alongside their deposit holding business, which will provide grants to improve all aspects of the private housing sector in Scotland.
John Ferguson from the Scottish council of Voluntary Organisations welcomed SafeDeposits Scotland’s arrival and said: “Most landlords and tenants act fairly but where unscrupulous behaviour exists SafeDeposits will put a stop to it. Better still; the SafeDeposits Scotland Trust will put any surpluses to public good by promoting education, training and best practice in Scotland’s private rented sector. It really is a win-win all around.”
A well known housing charity in Scotland is encouraging tenants to reclaim thousands of pounds of cash paid out in administration fees, and at the same time are warning property investors with an interest in landlord insurance to steer clear of unscrupulous letting agents.
The charity, Shelter Scotland, has launched a “Reclaim Your Fees” campaign throughout the country and is advising tenants in private housing that charges by letting agents for administration costs or reference checking is currently illegal and that they should request the money back. Already some tenants in Edinburgh have been successful in the small claims court but the charity is now urging the Scottish Government to outlaw tenancy fees completely in a bid to flush out bad letting agents.
Graeme Brown, a Director of Shelter Scotland. said “Over a quarter of a million families and individuals call the private rented sector home. That some letting agents – established and new – are routinely ripping off tenants by charging extortionate and unjustified upfront fees is shocking and quite simply exploitative. They are not only ripping off people who need a roof over their head and who, in many cases, have little or no choice but to pay up, but they are also undermining the work of good letting agents who offer a fair deal to tenants.”
In the near future landlords in Scotland will have to place tenant deposits in an independent tenancy deposit scheme, which should help to reduce the squabbling between landlord and tenant when a tenure is ended. However, the scheme will be retrospective and it is questionable if unscrupulous letting agents holding on to tenant deposits at the moment will have the cash flow available to hand over the money. Certainly John Blackwood. from the Scottish Landlords Association. has his doubts, saying “If letting agencies don’t have that money tucked away then agents may suddenly disappear off into the night and fold. We suspect that a lot of small agents will simply disappear because they haven’t been able to make sufficient provisions for the deposit scheme.”
Military veterans and their bereaved families are set to benefit from a new scheme that will help first-time buyers onto the property ladder. The Scottish Government is investing £13 million into a shared equity programme that will allow the buyer to spread the cost.
The scheme is part of the Scottish Government’s Low-Cost Initiative for First Time Buyers (LIFT), and will be open to those who rent a property that is protected by landlord insurance from either a housing association or the local council. The scheme will allow the successful applicants to use shared equity to buy a property from a housing association, private developer or on the open market. The buyer will take a majority share in a property while the Scottish Government will pay the rest. If and when the property is sold, the Government will receive the value at the time of sale of the percentage equity stake they originally funded.
Housing Minister, Keith Brown, said: “With mortgages harder to access, we are committed to doing all we can to help people on low to moderate incomes across Scotland get on the property ladder where this is affordable for them. These schemes also help our brave armed forces and veterans secure a roof over their heads. It is important that people who have served this country with distinction should have access to this type of assistance.”
House building throughout Scotland has been through tough times during recent years and this investment offers great value for money for both taxpayers and buyers. It will also help the economy by kick-starting more new housing developments and keeping jobs in the construction industry. As well as delivering at least 30,000 new affordable homes over the course of this current parliament, the scheme will help buyers overcome the need for high deposits which are an unrealistic goal for everyone who will benefit from this investment.
Tenants in Aberdeen and Edinburgh are being priced out of the market because demand for accommodation has soared since 2009. And landlords in the cities are being criticised for increasing rents by 10% to an average of £862 per month.
Experts are warning that the soaring cost will make it even more difficult for young people, who cannot get on the first rung of the property buying ladder, to afford to rent a home either. In areas such as Edinburgh and Aberdeen, demand for good quality rented homes is outstripping supply, and the amount of time a rented property is empty is the lowest throughout Scotland. The 20th annual report from Citylets has heralded a bright future for the rental sector across Scotland but Shelter Scotland, a charity helping the homeless, believe the good news for landlords is not so good for tenants and they expect the housing shortage to get worse throughout 2012.
With a huge lack of social housing in Eastern Scotland many people have little option other than turn to the private rented sector. The Scottish Association of Landlords feels that the figures could be skewed by the large amount of properties coming on to the rental market in both Aberdeen and Edinburgh that are not traditionally typical rental stock. This is because homeowners who are unable to sell in the depressed property market are looking at landlord property quotes and becoming reluctant landlords.
Dan Cookson, senior analyst with Citylets, said “Generally, landlords are enjoying steady increase in rents, while properties are generally empty for less time. The good news for tenants is that many rent rises are well below inflation. Landlords are not being greedy. It’s a competitive market and most of them are in it for the long term and realise that short-term rent hikes are likely to lead to longer void periods. But where renting was once the easy, cheap alternative to home ownership, rising rents have forced many ordinary families to cut their spending on essentials like food and heating, or uproot and move away from jobs, schools and families in search of cheaper rents.”
Campaigners are calling for party flats to be banned and new laws brought in to restrict the number of occupants allowed for short term lets. This is because of the increasing number of revellers organising stag and hen parties, which are both disturbing and keeping neighbours awake all night.
As many as fifteen people are being regularly crammed into two and three bedroom city centre properties which are being marketed by letting agencies who are hoping to attract what is a lucrative market in both Edinburgh and Glasgow. Landlords are earning around £600 a night for the flats which are located in the city centres and close to the bars and nightclubs. Property owners with landlord insurance can earn more by renting the property per night then they can for having a full time tenant paying them monthly.
Residents believe that any property which shares an entrance stairwell with other private dwellings needs to be regulated by the authorities in the same way as a long let apartment has to be. Large groups are also packed into the flats during the Edinburgh Festival when landlords can charge even more because accommodation in the city is always at a premium.
A spokesman for the Scottish Association of Landlords said: “Some owners were buying properties specifically for this purpose. Unlike the long-term letting market, they are not governed by any legislation and they can pack as many people as they like into a small flat. Obviously anyoneliving anywhere can have a party, but the difference with this, for flats that are catering specifically for the market, is that there are parties going on every night that there are people renting the flats.”
The problem is believed to be growing as properties that are not given a license under the HMO (Houses of Multiple Occupancy) regulations are instead being turned into a party flat by the landlord.