Letting legislation never stands still and here are some more changes on the way, as discussed at the February letting forum with East Lothian Council:
Private Rented Housing Bill 2010
A few changes here but the ones that mainly affect our clients are; Landlord registration number has to be displayed on all marketing material with the exception of to let boards (ie the number will need to be displayed on each window card, advert and websites), Pre-tenancy charges will be illegal (i.e. sums charged for granting, renewal or continuance of tenancies). These changes are expected to be passed in March 2011 and brought in late in 2011-12.
Tenancy Deposit Scheme
The scheme is designed to safeguard tenants deposit by placing it in the hands of a 3rd party. Even existing deposits held will need to be put into the scheme. Administrators of the schemes will be approved as fit and proper (may only be one scheme or possibly a choice). When the tenancy ends then Chalmers & Co would apply for release of the funds detailing what is to be paid to the landlord and what to the tenant with reasons why and proof. Tenant has 30 days to respond – agree or dispute. In the case of a dispute then it is referred to an independent adjudicator – there will be no provision for landlord to appeal to court. Due to be passed in March 2011 but unlikely to be introduced until 2012.
Housing Benefit Changes
Local Housing Allowance rates are to be set at the ‘30th percentile’ level of market rents which means properties available to LHA claimants will drop from 5 in 10 to 3 in 10. Essentially this means people will have less money to pay rent & less options for alternative housing. Landlords may be obliged to either reduce rents or end tenancies. Any landlords unable to reduce rents or to re-let may themselves default on their mortgage.
This will affect our clients who currently let to DSS assisted tenants. Timescales involved – starts April 2011 however any existing tenants have at least 9 months to prepare for the change. To give you an idea of what this means figure wise at the moment someone renting a 3 bed gets paid £150pw – this will be reduced to £137.31pw. The larger the property the more it is affected for example someone currently paid for 5 bedroom property at £386.54pw will be reduced to the new cap of a 4 bed at £253.85pw (a loss to the tenant of over £500pm)
Or by contacting Ewan Ritchie at East Lothian Council on 01875 824368 or at email@example.com
What do you think of these changes? Are they helpful of do you think they add unnecessary red tape to an increasingly complex letting market? Please give us your comments and views.