Monday, November 5, 2018

How The Lack of Social Housing is Affecting the Private Rented Sector.

Negative media stories surrounding non acceptance of tenants on housing benefit cast landlords and agents in a bad light. A decision like this can be down to the restrictions imposed by mortgage or insurance companies. It can also be down to bad experiences in the past.

Housing benefit - soon to be included in Universal Credit - is paid directly to a tenant and is in no way a definite income for a landlord as tenants’ situations change as do the way benefits are calculated.
Any tenants looking for a rental property while claiming housing benefits will require a guarantor who is earning enough to cover the income criteria, should a property owner accept it.

Increasingly low levels of social housing availability result in councils using every option to prevent an eviction. The Deregulation Act, which from October the 1st 2018 will apply to all assured shorthold agreements, irrespective of when they began, sets out criteria required of a tenancy to utilise a section 21 notice. If the landlord can not evidence a gas safety certificate or How to Rent guide - among other things - being given to the tenants BEFORE the tenancy commenced there is a possibility they will not be able to rely on a section 21 to regain possession of a property.

When a landlord serves a section 21 notice they are doing so because they require the property back. If councils are forced to look for ways to help the tenant stay due to no places for them to be housed then landlords are going to be forced to use the court system to regain possession.

It is essential if you are to be sure of an eviction to serve the right information at the beginning of the tenancy AND have evidence of you having done so. A good letting agent will know this and be able to demonstrate how they record and provide this information to a tenant. There are insurances available to protect you from costs incurred in just this sort of scenario.

It is indeed a worrying trend for landlords as more investors are put off by legislation-heavy tenancies and increasing tax burdens. The key to successful property investment is to DO YOUR RESEARCH.
Understand the local market and what you are looking for from your property investment. To be successful these days it is all about planning for the future and long term gains. Make sure your tenancy is set up correctly at the start. Most tenancies in Melton Mowbray are lasting longer than 2 years so it is worth the cost at the beginning to ensure peace of mind.

We need a private rented sector that encourages landlords to invest in the property and stick with the investment long term. If the landlord can have a hassle free investment elsewhere with less tax liability then they will come out of the property market. If they do then there will be less homes available to rent and rents will increase. People will not be able to save for the large deposits they need so this will not help those saving to buy.

We need a balanced property market where people have access to reasonably priced, well maintained rental property and a choice of property to buy when they are looking to do that. The only way this will happen is by more property being built. Year on year the targets for new building have not been met and this is going to take a long time to correct itself or a drastic drop in population to balance supply and demand.

In the mean time rents will continue to increase. If you would like any help or advice with a property investment or an Assured shorthold tenancy issue please give me a call. Charlotte Baker 01664 569700

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