Time To Switch To Short Lets ?

2/2/2022

Government white paper confirms Section 21' no fault eviction'  will be abolished in UK

The government's long awaited White Paper confirms that a landlord's automatic right to gain possession of their rental property will be abolished. Section 21 ' no fault evictions'  will no longer exist and landlords will have to apply to the courts or tribunal to prove they have grounds to remove a tenant, when this statute becomes law.

There are no timings given at this stage.

Many believe that it is has been Section 21 that allowed and underpinned the growth of  The Buy To Let Sector encouraging Lenders to enter the market offering finance to landlords, and allowing landlords to keep control of their properties and rental income.

 

21/1/2022

All Scottish Airbnb Short Stay Properties Must Obtain Licence By 2023 & 2024.

Councils will be given powers to ensure short-term lets are safe and meet the needs of their local communities under legislation laid before the Scottish Parliament.

Under the legislation, all local authorities will be required to establish a short-term lets licensing scheme by October 2022. Existing hosts and operators will have until 1 April 2023 to apply for a licence for each property that they operate as a short-term let. All short-term lets in Scotland will have to be licensed by 1 July 2024.

 

14/1/2022

Government Backs ' Responsible Short Term Letting'  Who Will Still Continue To Qualify For Business Rating

Michael Gove, the Levelling up Secretary, has announced new rules that will mean From April 2023 second home owners can only register for business rates if they can prove they let the properties for at least 70 days in a year.

Currently, they are permitted to pay business rates, which are cheaper than council tax, if they make their property available for letting for 140 days in a coming year.

Housing Secretary Michael Gove commented: “The government backs small businesses, including responsible short-term letting, which attracts tourists and brings significant investment to local communities.

“However, we will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost.

Receiving a Business Rating is likely to be a future test to prove your property is deemed to have a  short / holiday  let status.

 

 

13/1/2022

Government 'Airbnb' Regulation On The Way In U.K. ?

The government is to launch a consultation on plans to introduce a national register in England for holiday lets which will look at their effect on local housing supply and whether greater compliance with health and safety regulation is needed.

Farron is both the party’s housing spokesperson and MP for a leading holiday hotspot constituency in the Lake District, Westmorland and Lonsdale.

In answer to comments by speakers including Hunters founder and MP Kevin Hollinrake and shadow housing minister Matthew Pennycook that a national register would shed light on how many holiday rentals there are in England, housing minister Chris Pincher revealed that a consultation on the matter is due

“We recognise that a large number of second homes and holiday lets can have adverse effects in some areas, so I will look closely at his proposals and at the points raised by other colleagues,” he said.

“We also do not have the information needed to understand how, and for how long, a property is being used.

“I can confirm that we propose to consult on the introduction of a tourist accommodation registration scheme in England so that we can build an understanding of the evidence and the issues that second homes present, particularly when driven by the rise of online platforms such as Airbnb.

“We will launch that consultation later this year and will begin the process of a call for evidence in the coming weeks.

“We want to look at not just the issue of short-term holiday letting, but the effect that it has on supply. We will also look at compliance, health and safety regulations and the effect of antisocial behaviour and so on.”

 

A competent registration scheme would weed out leasehold apartments operating without the necessary permissions & insurance in place, so reducing competition for legitimate short stay properties.

A good step for existing short stay operators would be to join the new Visit England Accreditation Scheme. this is a simple entry level scheme showing basic permissions are in place along with health and safety measures for your short stay property.

Want to be one of the winners when regulation enters the market email us to discuss in more detail.

 

15/11/21

Wales To Consider New Planning Use Status For Second Homes & Holiday Lets.

A consultation exercise will launch in January 2022 to seek views on introducing a new "planning class" for short term holiday accommodation. The change, if implemented, would allow councils to designate specific "problem" areas where planning permission would be needed if any buyer planned to use a property as a second home or a short term let.

The change could be introduced from next summer.

 

20/9/21

Ministry Of Housing Renamed Department Of Levelling Up, Housing & Communities.

The Ministry of Housing, Communities and Local Government has had its name changed to become the ‘Department for Levelling Up’ under Michael Gove‘s leadership.

Mr Gove will head up the Department for Levelling Up, Housing and Communities, a role that will see him responsible for delivering “improvements to every part of the UK”, Downing Street has said.

Mr Gove said: “I’m thrilled that the PM has asked me to lead the levelling up agenda, the defining mission of this Government.

“With a superb team of ministers and officials in a new department, our relentless focus will be on delivering for those overlooked families and undervalued communities across the United Kingdom.

“We have a unique opportunity to make a real difference to people’s lives.

So the message is loud and clear, the government's priority is to kick start their levelling up agenda, knowing if they fail to convince the electorate, that the Conservative Party will very likely fall from power at the next general election. 

Importantly Housing will be seen very much as a major part of the levelling up agenda.

 
 

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 25/8/21

What Will Boris Do To 'Level Up Britain', His Renters Reform Bill Is On The Way !

A statement on the National Residential Landlords Association’s website says that its chief executive Ben Beadle has been invited to discuss the government pledge for a White Paper to be issued this autumn.

This is likely to be the long-awaited Renters Reform Bill which, according to the Conservative manifesto at the last General Election, will probably scrap Section 21 and modify Section 8 possession powers for landlords. It will also introduce the concept of a deposit which can be ‘passported’ from one property to another when a tenant moves home.

 

Beadlle himself says: “The outline proposals detailed when the Bill was first mooted two years ago included some of the biggest changes to the private rented sector in 30 years.

“It is therefore vital the government ensures reforms are fair and workable for both landlords and tenants and we will be working with ministers to make sure that is the case.

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24/8/21

Scotland Will Introduce Rent Controls & Increase Tenant's Rights By 2025

The SNP and Green parties struck their deal to create a solid majority in the Scottish Parliament and agreed on a joint housing strategy which will bring  in rent controls for the private rented sector and increased tenants' rights by 2025. Would the Labour Party in England follow suit if they gained power ?
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16/7/21

Planning Change Of Use or Licensing Which Legislation Will English Councils Adopt ?

Edinburgh will become the first British city to make Airbnb hosts / Short Stay landlords apply for planning permission for a change of use, 

Councillors in the Scottish capital have passed plans meaning landlords will have to ask the town hall before putting up homes as short-term lets.

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11/ 5 /21

Renters Reform Bill Part Of Queens Speech.

A briefing document on the measures included in the Queens Speech makes a reference to a Renters Reform Bill. It said the government will publish a consultation response on banning ’no fault’ evictions under this bill later this year. 

It's official it's on its way ! 

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16 / 3 / 21

Renters Reform Bill Now Set For End Of 2021

The government’s Renters Reform Bill has been delayed and is not expected to be introduced until later this year, according to National Residential Landlords Association (NRLA).

This Bill, which includes measures to abolish Section 21 rights for landlords and their agents, was expected to be introduced in the coming months.

The Bill, which first appeared in the 2019 Conservative General Election manifesto 15 months ago and later featured in the Queen’s Speech, will also see the introduction of so-called lifelong deposits which can switch from one property to another, preventing the need for tenants to raise new deposits every time they move home.

In real terms it is becoming harder for landlords to end a tenancy if the tenant does not wish to leave, and when the bill becomes law then landlords will have to apply to the courts or perhaps a housing tribunal / mediation service for a judgement to get back possession of their property.

Despite the bill being delayed, there is already a back log of possession hearings and realistically it could be 6 months or more before a landlord could apply for a court hearing.

So in any event landlords are facing the future prospect of a potentially expensive ( agents will have to charge to attend a court / tribunal)  &  time consuming process to get possession of their investment property / ies. It is likely that courts will push for mediated settlements especially with rent arrear cases.

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14 / 2 / 20

Global Short Let Platform - Silver Door -  Introduce Requirement For Property Accreditation

One of the first examples that the industry players are responding to the political pressure to introduce regulation for short let properties is the announcement by Silver Door, that they are introducing a requirement that advertised properties should be registered with a recognised accreditation Scheme, such as Quality in Tourism & Visit England.

Silver Door is a large Online Travel Agent  that specialises in corporate clients looking to secure high standard serviced apartments in the U.K., U.S.A. and Far East.

Watch this space -  we will be expecting more O.T.A. 's to follow suit shortly.

This trend will potentially weed out 1000's of city centre apartments that are operating short lets without the permission of their freeholders' buildings insurer, thus removing competition for properly insured and accredited short stay properties. 

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15 / 1 / 20

Renters Reform Bill - When will Section 21 be Abolished ?

No date has been set by government for the second reading of the Renters' Reform Bill 2019-20.

The Bill was announced in the Queen’s Speech on December 19.

In addition to abolishing so-called ‘no fault’ Section 21 evictions the Bill will also give landlords the right to gain possession of their property through the courts “where there is a legitimate need”.

However a statement from the House of Commons issued just before Christmas confirmed that no date had been given by the government for its second reading.

 

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17/12/19

Section 21 Will Be Abolished Within The Next Parliament 

Number 10 briefings to the national media suggest that the scrapping of Section 21 will be announced in Thursday’s Queen’s Speech.

In a bid to win over Generation Rent the government will promise to outlaw no-fault ‘section 21’ evictions, which allow landlords to instruct their tenants to leave a property without having to have a cause.

No date has been set by government for the second reading of the Renters' Reform Bill 2019-20.

The Bill was announced in the Queen’s Speech on December 19.

In addition to abolishing so-called ‘no fault’ Section 21 evictions the Bill will also give landlords the right to gain possession of their property through the courts “where there is a legitimate need”.

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Airbnb To Support U.K. Wide Council Registration Of Short Stay Lets In 2020

Airbnb has announced that it will be in talks with politicians across the UK on the proposals for a clear, modern and simple registration system for short-term rentals in UK cities.

Starting on 26 September 2019, Airbnb will begin a 6-month roadshow of major cities across the UK to meet with local government policymakers.

Airbnb will put forward proposals for a registration system in a white paper that will be presented to the government in 2020.

A competent registration scheme would weed out leasehold apartments operating without the necessary permissions & insurance in place, so reducing competition for legitimate short stay properties.

A good step for existing short stay operators would be to join the new Visit England Accreditation Scheme. this is a simple entry level scheme showing basic permissions are in place along with health and safety measures for your short stay property.

Want to be one of the winners when regulation enters the market email us to discuss in more detail.

 

Act Now - Be In Front Of The Game

Less competition due to new regulation would increase the yields for those freehold serviced blocks and properties which are eligible for the correct planning status.

Landlords with freehold or compliant leasehold, holiday  / short stay lets would be wise to take all steps to protect their future right to run their commercial short stay property;

 

 

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Many 'Airbnb City Apartments' Are Breaking The Terms Of Their Leases.

It's simple - You cannot let out your leasehold apartment on a short stay licence agreement If your lease prohibits it :

  • Prohibits running a business from your leasehold apartment
  • Prohibits any use other than a ' Private Residence '

 

Recent legal case illustrating this :  Nemcova v Fairfield Rents Ltd UKUT 303 (LC).  

Landlords thinking of entering the short stay market should not go to the cost of setting up a fully furnished and equipped property, only to find that they could well be prohibited from operating by their leasehold management or local council.

 

 

 

Many 'Airbnb Apartment Landlords' May Not Be Adequately Insured & Subject To Potential Liabilities

  • There are short stay management companies currently operating that are misleading their clients by managing apartments for a short stay use knowing they do not have the proper authority or permissions in place - so putting their client's at risk. Would you run a holiday let or B & B business without proper Public Liability Insurance in place ? I think the answer is you would be mad to operate such a business without insurance to cover your liability to guests in case of injury or worse.

  • Health and safety issue  

  • If you let the property as a landlord, you would be obliged to comply with health and safety laws. If you are a leaseholder with a long lease, and decide to let the property as holiday accommodation, the health and safety laws would apply to you as you would be considered to be a landlord under the law.

  • The Regulatory Reform (Fire Safety) Order 2005, s.3 states that the responsible person for complying with the Order is the person who has control of the premises (as occupier or otherwise) in connection with the carrying on by him of a trade, business or other undertaking (for profit or not). Airbnb is a holiday let and the leaseholder would be carrying out a business which means that they would need to comply with the Order.

 

  • Insurance
  • In most leasehold flats it is usually the freeholders’ obligation to take out insurance to cover the entire building, and the leaseholder may choose to secure its contents by obtaining contents insurance.
  • Leaseholders must make sure that if they intend to let their property as a holiday let on Airbnb, their insurance is not invalidated by so doing. Airbnb states that it offers Host Guarantee and Host Protection Insurance, but  “this does not take the place of homeowners or renters insurance or of adequate liability coverage.”
  • Lease

(a) Change of use

  • There have been a few decisions which have discussed the issue of whether the use of premises to let on Airbnb is in breach of any clause in a lease which restricts the use of the property as a private residence only or prohibits carrying out any business in the premises.

  • One such example is the recent case of Nemcova v Fairfield Rents Ltd UKUT 303 (LC). The lease in this case stated that the leaseholder was “not to use the premises or permit them to be used for any illegal or immoral purpose or for any other purpose whatsoever otherwise than as private residence.” The Upper Tribunal decided that the clause prohibits all other uses save as a private residence. The clause did not state that the premises are to be used as the private residence of the lessee or the occupier, but as “a private residence”. In other words the clause in the lease would not be breached if the occupier for the time being is using it as his or her private residence. The motive for the occupation and the acceptance of payment is immaterial. What is important is the duration of the letting. Judge Stuart Bridge held that “…for the property to be used as the occupier’s private residence there must be a degree of permanence going beyond being there for a weekend of a few nights in the week.” The lessee in granting short term lettings for days and weeks rather than months had breached the clause in the lease to use the property as a private residence only. 

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All Landlords Will Have To Satisfy The Courts That They Need Possession Of Their Rental Property !

 April 2019

The government says it wants to ban outright Section 21 'no fault' eviction powers in England and Wales.

Instead landlords seeking to evict tenants would have to use Section 8, which can be implemented when a tenant has fallen into rent arrears, has been involved in criminal or antisocial behaviour or has broken terms of the rent agreement, such as damaging the property. The government says it will amend Section 8 to allow it to be used by landlords if they want to sell the property or move back in themselves. Unlike S21, tenants can challenge S8 evictions in many cases.

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Labour Party Calls For Rent Capping 

January 30, 2019

Short Stay and Holiday Lets are not legally residential tenancies, they operate as a business and are not seen by housing legislation to be a main residence. Landlords are increasing exploring the short stay sector

The mayor of London has stated that he is considering introducing rent controls across LondonSadiq Khan announced that London needed to adopt a “strategic approach to rent stabilisation and control”, since the arguments in favour of capping rent inflation are becoming “overwhelming”.  “I have long advocated such reforms; in 2013, I suggested reforms could give renters the right to longer-term tenancies and predictable rents. The housing crisis is now having such an effect on a generation of Londoners that the arguments in favour of rent stabilisation and control are becoming overwhelming.”The proposed changes include ending section 21 “no fault” evictions, which the housing campaign group Generation Rent said have been the leading cause of statutory homelessness since 2012. “This law allows evictions with no reason needed, and this is one more reason why we should scrap it,” the group said.Assured shorthold tenancies, the standard rental agreement for almost all renters in England, should be replaced with open-ended tenancies – providing greater security of tenure to renters, according to the draft blueprint. Currently, landlords are able to evict tenants immediately after the initial fixed term, usually six months, without a legal reason.
 

Increasing Letting Cost For Landlords 

January 30, 2019

In direct response to the Tenant Fees Bill, the majority of letting agents are increasing their commissions for both letting and managing rental property. Agents can no longer rely on tenancy sign up, referencing or administration fees charged to tenants, and an already over competitive sector has no option but to increase their charges to landlords. Many of the larger agent groups are now advertising management commissions at 13 and 14 % plus other increased re-let fees. 

Certainly some landlords are seeing the writing on the wall and selling their investment properties and leaving the private rented sector, and are keen to invest in other sectors such as  Commercial Property and Holiday Lets.   

 

Landlords Right To Automatic Possession Being Eroded Away

 January 30, 2019

Back to the future ? ...yes looks like the political will is returning to one of increasing tenant rights and controls over the private rented sector. In the 1988 Housing Act was born the Assured Shorthold Tenancy Agreement and Section 21 that gave a landlord an automatic right to gain possession back of his/hers investment property. These two things fueled the growth of the private rented sector allowing lenders to give mortgages to investors knowing there would be no risk of potential sitting tenants ( which would devalue the capital value of the property).
 
This landlord's automatic right to get tenants out of a rental property is slowly being eroded away...No fault evictions...or loss of right from a number of administrative mistakes are now in evidence, and further a call to completely abolish Section 21 is growing in political circles.
 
Short Stay and Holiday Lets escape this growing risk of semi-sitting tenants being left in a rental property, and increasingly property owners are wanting to invest in this sector.
 

Tenancy Deposit Capped - Damage Costs Will Be Controlled

 January 30, 2019

 

Private renters are set to benefit from new measures reducing the amount tenants have to pay up front to secure a home from 6 weeks’ rent to 5 for annual rentals of under £50,000.

The move, announced as part of the Tenant Fees Bill, is a further step by Communities Secretary James Brokenshire MP towards ending costly fees imposed on tenants when they first move into their property - creating a fairer housing market that works for everyone.

Around 1 in 3 renters who currently pay a deposit are set to benefit from the change - saving tenants £64 million in the first 12 months by keeping more of their hard-earned cash, while also making sure landlords are able to recover costs in the event of damage to their property.

The new cap will apply to properties where the annual rent is less than £50,000. A deposit of 6 weeks’ rent will continue to apply where the annual rent is £50,000 or more.

Other amendments to the Bill include protecting tenants from unfair fees by limiting the type of default fees that can be charged by landlords and property agents.

This change means that during the tenancy landlords and agents will only be able to charge fees to replace lost keys or for late rent. Landlords will still be able to claim back costs for damage through the tenancy deposit at the end of the tenancy. However, landlords and agents will not be able to write lots of different default fees into a tenancy contract and tenants cannot be charged hundreds of pounds for a damaged item that actually only costs a few pounds to replace.

Deposits however can still be charged for short stay and holiday lets and reasonable charges for breakages charged to guests subject to terms and conditions. Further with weekly cleans in place property owners can maintain and keep their properties to an excellent standard.

New Legislation Prevents Charges To General Let Tenants

January 20, 2019

The Tenant Fees Bill sets out the government’s approach to banning letting fees paid by tenants in the private rented sector and capping tenancy deposits in England. The aim of the Bill is to reduce the costs that tenants can face at the outset, and throughout, a tenancy, and is part of a wider package of measures aimed at rebalancing the relationship between tenants and landlords to deliver a fairer, good quality and more affordable private rented sector.

Tenants will be able to see, at a glance, what a given property will cost them in the advertised rent with no hidden costs. The party that contracts the service – the landlord – will be responsible for paying for the service, which will help to ensure that the fees charged reflect the real economic value of the services provided and sharpen letting agents’ incentive to compete for landlords’ business.

The ban on tenant fees is intended to come into force on 1 June 2019.

The government will shortly be publishing guidance for tenants, landlords and letting agents to help explain how the legislation affects them.

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