The Green Party have published their 2015 manifesto in advance of the General Election and it’s not looking good for landlords. The Greens have described their policies as ”making renting normal” but the National Landlords Association (NLA) disagrees, instead describing the Green policies as “an attack on landlords”.

What are the Green Party’s Manifesto Proposals?
• Rent controls linked to consumer price index

• ‘Living Rent’ tenancies, which include a 5 year fixed tenancy agreement

• Introduction of not-for-profit letting agencies

• Mandatory licensing scheme for landlords

• Abolition of various tax breaks for landlords

• Establishment of Living Rent Commission to see if local rents can be brought in line with local income averages

NLA View on the Green Proposals
The NLA is not happy with these proposals.

“This manifesto does not appear to take a balanced view of the PRS. The Green Party appear to want people to rent however does not take into account the demands on landlords to provide safe and decent housing for those families.”

They are also concerned that the introduction of five-year tenancies will reduce flexibility within the private rental sector and doesn’t take into account the fact that tenants are already free to ask for longer tenancies if required.

The NLA is also concerned at the prospect of the removal of landlord tax breaks. Many landlords rely on tax breaks to make their businesses viable and if these tax breaks were no longer available, some landlords would have no choice but to leave the private rental sector.

Ending a tenancy is not just a case of asking a tenant to leave. Landlords have to follow strict protocols if they want to take possession of their property – if they fail to follow the correct procedure they will fall foul of the law and could face all kinds of problems.

There are two ways for a landlord to end an Assured Shorthold Tenancy: Issuing a Section 21 notice is the normal route for the landlords, but they can also use a section 8 notices in specific circumstances, usually if there are rent arrears.

Changes to Section 8 Notices
New legislation came into force on Monday 6th April, which landlords need to be aware of. The wording of Section 8 notices has changed, so if you have any of the old forms in your possession, you should destroy them immediately. New Section 8 forms, with the revised wording, are available for download online.

New Section 8 notices must be used from now onwards. If you inadvertently use one of the old forms the case could be thrown out of court in the event you need to apply for a Possession Order. If you served a Section 8 notice before Monday 6th April, there won’t be a problem as long as the notice was served correctly.

Changes Section 13 notices
Section 13 notices are used if you need to notify a tenant of a rent increase. The wording of Section 13 notices has also been revised, so once again, get rid of any old forms you have and download new ones. Section 13 notices should always be used if the tenancy doesn’t contain a rent review clause.

The National Landlords Association (NLA) is concerned about Liverpool Council’s plans to launch its citywide landlord licensing scheme on April 1. The NLA says the current license application process would put local landlords in breach of the law. As such, the NLA is extremely concerned.

The problem apparently relates to the online application process, which according to the NLA does not meet legal requirements. The NLA has sought legal advice and is now demanding that Liverpool City Council postpones its plans to launch the scheme until the problems have been resolved.

Liverpool City Council Puts Landlords in Impossible Position
“After seeking legal advice, we believe that the Council has failed to meet its obligations in providing a suitable application process which meets the requirements as set out in law, yet it intends to make it an offence to manage an unlicensed property next week,” says Richard Lambert, CEO of the NLA.

“This puts landlords in an impossible position of being unable to comply with the scheme, and consequently unable to use a section notice 21 to gain possession of a property.”

NLA Advises Landlords to Download Application Form
The NLA is advising landlords to avoid the online application form and download one instead. The form can be filled out manually and returned to Liverpool City Council for processing. This will prevent landlords from being put at risk of not complying with the scheme

The NLA has challenged Liverpool City Council to come up with a suitable solution before April 1, but as yet, it has not had a reply.

Thanks to high property prices and stringent requirements set by lenders, a whole generation of people is being forced into the private rental sector because unlike their parents, they can’t afford to buy a home. But is this a bad thing?

Apparently not, according to an article written by Mark Coulter, Managing Director of a leading Edinburgh estate agent. He says there are a number of reasons why renting a home as opposed to buying one is the smart choice for many, in particular young professionals and workers who need flexibility.

The High Cost of Buying a Home
There are many costs associated with buying a property: stamp duty, solicitor’s fees, mortgage fees, survey and valuation fees, and of course raising a large deposit. All of this has to be paid up front and for younger, first time buyers it is a huge financial outlay at a time when they don’t have much money. And to make matters worse, a lot of young people change jobs frequently in the early years, so the prospect of moving house and incurring the same costs all over again, is not an attractive one.

The Benefits of Renting Set to Increase
Many experts believe that the benefits of renting will only increase as time goes on. They predict that capital growth will be a lot more modest over the next few years, so people will have even less of an incentive to buy instead of rent. Even security of tenure shouldn’t be an issue with good tenants, as many landlords are more than happy to extend shorthold tenancies for several years.

Landlords have won an important victory after the Minster of State, Brandon Lewis, has announced some major reforms to Selective Licensing. The changes mean that local authorities will no longer have the power to implement borough or citywide blanket licensing schemes.

Reforms Come into Effect in April 2015
The reforms, which will come into effect on April 1st, are largely as a result of intensive lobbying by landlord groups such as the National Landlords Association. The NLA published a report in February that highlighted problems with licensing schemes.

“We’ve argued solidly since 2010 that councils have been abusing their power to push through blanket licensing schemes. Today’s announcement means that if a council intends to licence a large proportion of its housing it will first need to show the case stands up to independent scrutiny.

“Landlords are getting fed up with being unfairly targeted and made responsible for problems such as anti-social behaviour when in reality they have little effective control over the issue, except by eviction. Hopefully this now means that councils who are serious about tackling poor property standards and anti-social behaviour will first look to the extensive existing legal powers they already have to combat the issues.”

New Rules for Local Councils
Licensing schemes have become increasingly popular since 2010, but with new rules in place, councils will have to seek government approval of the selective licensing scheme would cover more than 20% of private rental homes or the council’s geographic area.

The Residential Landlords Association is also welcoming the changes.

According to Nick de Bois, MP for Enfield North, neighbours of anti-social households need more rights. He is campaigning for the law to change so that the housing ombudsman can intervene when problems arise between neighbours and landlords.

A Bill to Settle Disputes
Mr De Bois tabled his ten-minute rule Housing Ombudsman (Power to Settle Disputes Between Neighbours and Tenants) bill on Tuesday. As the rules currently stand, the housing ombudsman can only get involved when there is a dispute between a landlord and a tenant. If Mr De Bois has his way, the ombudsman will be able to intervene when there is a dispute between a landlord of an HMO and neighbours.

Absentee Landlords to be Held Responsible
Under the terms of the bill, absentee landlords will be held responsible if there are problems with their tenants and the ombudsman will have the power to track down landlords and force them to enter into negotiations with fed-up neighbours.

“Presently it can be very hard to even try to locate and identify landlords when residents are seeking to enlist landlord help in resolving what can be a very disturbing cycle of anti-social behaviour, that all too often take too long for authorities to sort out, if at all,” said Mr De Bois.

“I want to put a stop to this, by giving the neighbours who are the victims of anti-social behaviour the right to deal with the landlord of properties – which I believe will help resolve the problem in a more timely fashion. Good landlords will want to stop bad behaviour if they are aware of it, and where there are landlords that don’t care then this bill will force them to take action.”

According to new Government figures published in the housing survey, landlords in the private sector put up rents by 8.2% last year. The increase in London was even higher, with rents going up by 8.4%. Unfortunately, Consumer Price Index inflation fell to less than 0.5%, so rent rises will affect tenants.

A survey published by Survation at the beginning of this year revealed that an overwhelming majority of people are in favour of rent controls in the private sector. Less than 10% of those surveyed said they were against the idea of rent caps in the private sector whereas 59% were strongly in favour of the idea.

Labour Says No, Green Party Says Yes
Labour wants to introduce limits on future rent rises, but the Conservatives, Lib-Dems and UKIP don’t advocate rent controls at all. The Green Party supports rent controls and has been campaigning for them to be introduced in London for some time.

“We give our tenants some of the weakest protections in Europe, we should copy the smart rent controls and security enjoyed by tenants in countries like France and Germany where rent can’t rise faster than inflation guaranteeing fairness and predictability for tenants and landlords,” said Green Party London Assembly member, Darren Johnson.

RLA Against Rent Caps
The Residential Landlords Association is against rent controls in any form. They believe that the introduction of rent controls will damage the private rental sector and drive landlords away. They also point out the majority of landlords intend on freezing rents in 2015.

Liverpool City Council has decided to introduce a compulsory licensing scheme for its private landlords, in an attempt to improve housing conditions in the private rental sector. Around 50,000 rental properties in the city will be affected and landlords will be expected to pay a minimum of £400 as of April 1st. Subsequent properties will be given a small discount and landlords who are accredited members of an approved scheme will only have to pay £200 per property.

Heavy Handed says NLA
The National Landlords Association has described the licensing scheme as “heavy handed” and believes that landlords will feel alienated as a result of stringent checks to see if they are a “fit and proper person” (i.e. they don’t have any convictions for drugs, violence, dishonesty and abuses of housing law).

Costly Fines for Non-Compliant Landlords
Landlords affected by the licensing scheme will be expected to meet health and safety guidelines, deal with anti-social complaints quickly, and maintain the exterior of their properties. Eligible landlords who don’t bother applying for a license face fines of up to £5k. They might also have their properties confiscated by the council.

“Responsible landlords… have absolutely nothing to fear”, claims Liverpool Council’s Assistant Mayor, Ann O’Byne. However, she added that the council was “concerned about a number who rent properties that fail to meet satisfactory standards.”

“This has a negative impact on the health and welfare of local communities and on a housing market that is already vulnerable in terms of vacant properties, low house prices and depressed rental values.”

The number of bailiff repossessions in 2014 rose to 41,965, which is an 11 per cent rise on the previous year – and the highest figure since records began in 2000. In contrast, the number of landlords starting the repossession process to reclaim their property has actually fallen to 161,257, a 5 per cent decrease on the previous year. Social landlords made the majority of the claims for possession (62 per cent); private landlords made a further 13 per cent of the claims; and the rest were accelerated claims where a landlord just wanted his property back and there was no overdue rent.

‘It’s Grim in the Rental Sector’ says Shelter
Housing pressure group, Shelter, claims the statistics released by the Ministry of Justice paint a very grim picture of life in the private rental sector. In a statement made to Channel 4, Shelter’s chief executive, Campbell Robb, says:

“The failure of successive governments to build anywhere near enough affordable homes combined with a wave of welfare changes is making it harder and harder for people to stay in their homes. The only way for politicians to fix this crisis for good is to commit to building the genuinely affordable homes that we desperately need.”

‘No, it’s Not!’ says NLA
The National Landlords Association disagrees.

“These statistics reinforce what the NLA has consistently said, that repossession is always a last resort for landlords.

“A landlord will always aim for good, stable, long-term tenancies and repossession just doesn’t make good business sense. Repossessions mean additional costs for landlords in the form of court costs, loss of rent, letting agents’ charges and local empty property charges.”

Figures released by an auction research group have revealed that properties sold via auction usually sell for 15 per cent less than properties marketed via estate agents.

To illustrate this trend, there were 2,712 residential properties offered for sale via auction in December 2014, of which 2008 were sold. The average sale price was £154,014. By comparison, the average sale price for a residential property not sold via auction during the same period was £177,766.

Record Year for Auction Sales
“In the residential sector, the gavel fell on 21,834 lots during 2014 – a 2.1% increase on 2013. More significantly, this sets a new record for the highest number of residential sales in a calendar year, surpassing the previous high recorded in 2007,” said David Sandeman, managing director of auction research firm, El Group.

“We have also seen the amount raised at residential auctions increase throughout the year, often in double-digit percentage terms, and the yearly figures below show the total has broken through the £3 billion mark for the first time in seven years – a fantastic achievement for the industry.”

Auctions not for the Faint Hearted
Buying properties at auction can be a smart move for property investors, but bidding at an auction is not for the faint hearted. For one thing, you need to have your finance sorted out before the auction as once the gavel falls you have a limited time to complete the sale. For another, you won’t be able to back out of the sale if you subsequently discover that the property has some catastrophic or expensive fault, so surveys, etc., need to be sorted out before the auction begins, which is money spent with no guarantee you will even be the winning bidder.