Landlords advised to move to Full Management as even more regulation is on the way
Help!... Last week I received a call from a landlord whom I have acted for since the late 1990’s. A client who has become a friend, given he has a portfolio of 8 properties in the Surrey area that we have since then let for him. To respect of his privacy, I will call him Graham for the purpose of this article.
Graham is a self-managed landlord with property in Surrey, Hampshire and London. An extremely diligent and successful businessperson, he is what I would normally class as a normal, decent and fully compliant landlord.
Graham’s problem? Graham has a property in Brighton that is proving too isolated from the rest of his portfolio, so he has decided to sell. He had a buyer, but he can’t get his property back due to a legal ruling surrounding the validity of the Section 21 notice he served on his Tenant. To be fair to him, there are many that don’t realise we are into our third version of the Form 6A since this new Form replaced the 21b and 4a notices in October 2018! An increasing number of self-managed landlords are having similar issues, with notices and tenancy agreements being rendered invalid due to the multiple changes in compliance and legal statute.
Tenant protection, safety and security are rightly paramount and the days of cutting corners at a tenant’s expense are, thank goodness, mainly tales from the past. Private rental sector letting agents, have been brought into line and the rogue agents we all see highlighted on our TV screens highlighting malpractice, are rightly being exposed and put out of business. The Tenant Fees Ban Act 2019 is shaping up to be the last nail in the coffin for the scurrilous as standards raise.
Trading Standards Officers are now turning their attention to private landlords, with heavy fines for non-compliance. We have an all-party political movement for private landlord self-managed regulation. This is likely to include the same insurance and formal qualifications that agents are, or in the case of qualifications will soon be, required to adhere to.
My message to Graham was simple. After over 20 years as a self-managed landlord, times are changing, and the writing is on the wall. It is now vital to have your property managed by a regulated letting agent, who automatically achieves a landlord continual compliance and insurance cover. The shrewd businessman that Graham is turned this to his financial gain…..by negotiating a trial management period with me for free!
New electrical regulations - Out April 2020 - Effective 1st July 2020
Subject to approval by both Houses of Parliament, landlords and agents will need to ensure electrical installation inspections and testing are carried out for all new tenancies in England from the 1st July 2020, or from 1st April 2021 for existing tenancies.
The Government has laid out the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020, meaning landlords must ensure every fixed electrical installation is inspected and tested at least every five years, by a qualified electrician. The Regulations also state that a landlord is required to obtain a report of the results of the inspection and test, supply it to each tenant within 28 days and retain a copy until the next inspection is due.
The private landlord must supply a copy of the last report to any new tenant before occupation, or any prospective tenant within 28 days of a request from the prospective tenant.
The Regulations require local housing authorities to enforce the rules and they have the power to arrange remedial action. Be warned as proven breaches of the Regulations can result in the local housing authority imposing a financial penalty of up to £30,000.
Rents on the increase.
After a period of little, and in some cases negative, rental value growth in 2019, 2020 is already showing signs of catching up with a lack of available property already starting to push rents up. After the Tenant Fees Ban in Scotland was implemented in 2016 (3 years ahead of England and Wales), rents rose there on average 6.1% in the first 12 months. The signs are that we will see a similar increase when the figures are rolled out for the South East of England. Yes…the prediction of many a year ago now, I know!