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Landlords told to vet migrant tenants

UK Passport and FormsThe government is to start requiring landlords to check the immigration status of their tenants. If they don’t, they will face fines of several thousand pounds.

The move will be announced in tomorrow’s Queen’s speech, which marks the state opening of parliament. It is part of the Immigration Bill, which seeks to crack down on illegal immigration. It sits alongside measures designed to stop employers from taking on illegal immigrants. While the Bill will be welcomed by many, it is expected to face criticism from landlords. Continue reading

Funding for Lending: a landlord’s guide

Mortgage AgreementThe Bank of England’s Funding for Lending scheme provides cheaper loans to households and businesses. It was launched last August, with the intention of boosting the economy by giving people access to affordable loans. That has been in short supply since the credit crisis of 2008.

The scheme gives banks financial incentives for lending to small businesses. In many cases, it has also allowed them to drop their mortgage rates. Buy-to-let landlords have already benefitted in this way. Now, the £80 billion scheme is to be expanded with extra funding. It’s hoped that the struggling housing market will benefit. Continue reading

Squatters Rights Removed

Today, squatters have had their rights removed so those who own homes are properly protected says the Government.

Those who are constantly caught squatting could face six months in jail and/or a £5,000 fine. This is because in the eyes of home owners, squatter are stealing their property. Whereas the squatters believe if the property is empty then they are perfectly entitled to live there.

One way to help your case though when it comes to squatters in your property is landlord insurance. When taking out a quote remember to check if this is covered, if not you may have to take out an additional policy to give you some back up.

Charities

Although this new law will be coming into play, charities are worried that this will end up making criminals out of those who are trying to protect themselves from the streets.

Leslie Morphy from the housing charity, Crisis, has said, “There was already legal provision that police and councils could, and should, have used to remove individuals in the rare instances of squatting in someone’s home.

“And the new law also applies to empty homes – of which there are 720,000 in England alone, including many that are dilapidated and abandoned – criminalising homeless people when they are just trying to find a place off the streets.”

The charities believe that by removing squatter’s rights that this is not helping the issues as to why they are squatting in the first place.

Government

The Government on the other hand, think differently. They, along with homeowners and landlords, believe that they have been avoiding the justice system for far too long which causes most, distress why trying to evict them and clearing up the damage they often leave behind.

When the law is changed this means that police and various other agencies can take quick action.

Crispin Blunt is the justice minister and he has said, “We are spending £400 million a year in this spending review period on the homeless.

“We have a proper strategy for the homeless… that needs to sit alongside this measure, but this measure is about justice and fairness for home owners who shouldn’t have their homes stolen by squatters.”

Guide to the Green Deal

The government’s Green Deal scheme, designed to reduce household energy use, is beginning to take shape. From last week, potential Green Deal installers were able to start the process of becoming authorised, ahead of the scheme’s official launch early in 2013. The Green Deal is designed to provide homeowners with finance for energy saving modifications that will help the UK meet its carbon emissions reductions targets, paid back via energy bills. Loans will be available to both landlords and owner-occupiers.

How will it work?

Households can claim loans of up to £6,500 towards improvements on their home for energy-saving modifications such as improved insulation or a more energy-efficient boiler. Loans are linked to the home, not to the owner or tenant. They are paid back via energy bills, so whoever is living in the home (and benefitting from the energy efficiency measures) will pay of the loan. Loans are paid back via energy bills, but the government guarantees that repayments will always be lower than the savings made as a result of the improvements.

In order to get a Green Deal loan, homeowners will need to call in an accredited assessor to look at their home’s energy performance. They will then advise on what energy-saving measures might be useful. It is then up to homeowners to look for Green Deal providers to carry out the work. These are private contractors who have applied to the government to be able to carry out Green Deal work. 22 organisations, including both big-name property companies and SMEs, have signed up to be the scheme’s initial providers. If the scheme is successful, the number of providers is likely to grow.

Will it work?

Opinion among those in the industry is divided. Environmental think-tank E3G has expressed doubt on whether take-up will be high enough to have a significant impact, believing that interest rates for Green Deal loans have been set too high. However, the Green Building Council has backed the proposals, saying that no-one should lose out financially as a result of the scheme. For landlords, carrying out work under the Green Deal may become essential. From 2015, tenants will be able to request improvements, and landlords who fail to carry out improvements may find that it becomes harder to get landlords insurance.

Funding for Lending

Today it was announced that there is an £80 billion lending scheme called Funding for Lending that is hopefully going to help get the economy back on track.

The Scheme

The Treasury and Bank of England’s Funding for Lending scheme is going to be given to banks so that cheaper loans and mortgages will be made available to the public.

This extra money will be made available to businesses which will exceed the current national loan guarantee scheme which helped businesses take on extra staff. British banks are going to be offered the funding at low interest rates which will incentivise them to offer the low rates to the customers.

As a result of the low interest rates, this will help businesses save money and in turn, they will be able to hire more staff. By having more of the population in employment, this means more people will be looking to spend their money, putting it back into the economy and this includes purchasing homes. This will therefore help boost the housing market by increasing demand and current homeowners will be more encouraged to move into a new property. This will also increase supply.

Property Market

This is desperately needed in a time where people are forced into renting for much longer and therefore are unable to save for a deposit to even qualify for a mortgage. Those who are unemployed and aren’t already on the property ladder will also struggle and will be living with parents for a long time to come. This does not help the current stagnation that is already being experienced in the housing market.

With mortgage rates a lot lower this will help ease the financial burden that comes with owning a property. For many landlords in the country, their monthly bills may be on the increase whilst there are additional costs, such as landlord insurance that need taking care of. Lower rates mean more cash for these essentials and less financial stress landlords and general households throughout the country.

Doubt

However, with the economy as it is, many fear that banks will simply not want to lend more no matter what interest rate they will be paying. This is especially true with a “Eurozone storm” on the horizon.

Chris Leslie is the Shadow Treasury minister and he has said, “Despite promises from ministers, net lending to businesses has fallen in every month of this Government. And there are serious questions about whether the new Funding for Lending scheme will really see lending to businesses become cheaper and easier to access.”

What are your thoughts on this new lending scheme? Let us know by commenting below.

20k Fine for Landlords who House Antisocial Tenants


Landlords in Derbyshire who let their tenants behave in an antisocial manner could face fines of up to £20,000. This is in an aim to bring back to life “broken down” communities.

The Derby City Council is looking to create new rules for private landlords that are letting property in areas that have an antisocial problem.

Private Landlords

At the moment public housing providers have to take action against their tenants if they are behaving in an inappropriate fashion however this obligation is not the same for private tenants.

The council is hoping to impose rules which would mean that landlords who are in a certain zone have to be licensed. They are currently looking into rules from the Government to see if this is possible.

Landlords will be required to purchase their own licence which is another additional cost private landlords will encounter on top of others such as landlord insurance.

The new scheme would be put into place in the areas that have had complaints about antisocial behaviour.

Dawn Gee is a private landlord in Derbyshire, she has said, “I certainly think that action should be taken, landlords have a part to play.

“Already, antisocial behaviour, gangs congregating and fly-tipping have driven people away from parts of Normanton.

“If you look down Stanton Street and Porter Road there are properties that are empty and lots of ‘To Let’ signs up.

“The community has broken down and I’m keen on anything that can be bought in to change that.
“But my concern is that it will end up being the law-abiding landlords who engage with this, while those landlords who are the problem will ignore it. How will the council enforce this?”

The Rules

The council haven’t decided which areas they will enforce this new proposal on however they have said there will be a £20,000 fine for those who do not follow the new rules.

There are also some tests to go through before landlords will be able to have a licence. Someone will need to check that their property is safe and that they have no criminal convictions. One of the other criteria is that the landlord will help the police and the council when it comes to antisocial tenants.

The properties also have to fit in with a list of conditions increase fire, gas and electrical safety. The property also needs to be visually acceptable and managed to a good standard. Landlords will also need to get references before they agree a tenancy.

New homes still in short supply

The fragility of the housing market outside of London is still very much a concern for those in the industry and more importantly for those looking to find decent accommodation in which to live. The recent figures released by The National House Building Council (NHBC) illustrates amply the problems prospective home buyers are facing and how vital it is for property investors with an interest in landlords insurance to expand their portfolios.

Not enough new builds

While sales of established properties at least appear to be holding steady, a chronic under supply in new properties is continuing to harm the housing market. In Wales, where housing needs are getting desperate, there have been a number of new homes built and covered by homeowners insurance in the last three months, but many more are needed to meet what seems to be an ever increasing demand. According to the National House Building Council there were 1200 homes built in the last three months but this is only a small percentage of the number actually needed.

It is not just a problem for Wales as throughout the United Kingdom the number of new homes that have been registered with NHBC has dropped compared with the same time period year

Who will buy the homes?

Only last week the Government announced that it was looking to see almost a quarter of a million new homes built every year for the next 4 years. This it said would ease the burden on local authorities, councils and the private buyer. Where the homes will be built and by whom is still far from clear. Housing associations have been informed as to whether their bids for Government funding for building new homes have been successful but builders are still uncertain as to how the Green Deal and other regulations will impact on their building plans. And of course the other uncertainty is who will buy the homes aimed at the private sector. Many more landlords will fancy the opportunities to grow their business if the conditions are right and they may need to, if banks don’t help private homebuyers.

Market dependant on Landlords

The NHBC feel the coalition needs to remain strong on its current policy as well as being prepared for further assertive action if it becomes clear that house building is getting to a perilously low level. In recent months the UK property market has been drowning in the negative publicity of low interest rates and the low supply of realistically priced homes. The property market still has stiff challenges ahead for the rest of this year and probably the whole of 2012. The outlook remains uncertain but, with the UK economic recovery expected to remain sluggish landlords may have a big role to play in housing the residents of the UK.

Scottish landlords threatened by new law

Landlords in one part of the UK are bracing themselves for a law change that will significantly affect how they conduct their business.

The Scottish Parliament is studying proposals to introduce a mandatory self financing deposit scheme where private landlords and agents will have to pay rent deposits from their tenants into a named bank account.

The scheme comes on the back of a report that said a large number of private tenants in Scotland find their rental deposit or at least part of it is withheld by the landlord at the end of the lease without good reason. The Scottish Government believe the new scheme would alleviate this problem by putting the deposit account in quarantine until a third party can judge on any dispute between landlord and client in respect to the condition of the property at the end of the lease.

At the moment there is no standard procedure in Scotland to deal with this kind of dispute, and although an aggrieved tenant could take his case to the Sheriffs court, government advisors believe many of the thousands of tenants who have had deposits withheld believe people are intimidated by the system and therefore let rogue landlords get away with their bad practices.

The move was welcomed by the National Union of Students who has many members in private accommodation in Scotland, a large of whom have had deposits withheld in the past. The scheme was slated, however, by the Scottish Association of Landlords whose spokesman said that the scheme would only be subscribed to by good landlords, the type who cared about both their properties and tenants, and the type who had landlord insurance and obeyed all required legislation already.

The final details of the scheme have yet to be finalised but it is anticipated that fines will be levied on non compliance. However, Scottish landlords will look back at the recently introduced Landlord Registration scheme which has failed miserably because of a lack of government action against non compliance in achieving good practice by all landlords.