Fitness for human habitation – What landlords need to know

The fitness for human habitation act (AKA the Karen Buck Bill) came into force on 20th of March 2019, which is an amendment to the Landlord and Tenant Act of 1985.

The act requires that any property let by a landlord (private or social) must remain in a state fit for habitation when a tenancy is granted and remains so for its duration.

This act is in place to help protect tenants against negligent landlords, and gives tenants the power to sue their landlords if they are not in compliance with the regulations. The Act covers all tenancies less than seven years in length in both the social and private rented sectors.

What does fit for human habitation mean?
The landlord of a qualifying dwelling is required to ensure that the house is “reasonably suitable for occupation” in respect of the following nine matters:

  1. repair,
  2. stability,
  3. freedom from damp,
  4. internal arrangement,
  5. natural lighting,
  6. ventilation,
  7. water supply,
  8. drainage and sanitary conveniences,
  9. facilities for preparation and cooking of food and for the disposal of waste water;
    and the house shall be regarded as unfit for human habitation if, and only if, it is so far defective in one or more of those matters that it is not reasonably suitable for occupation in that condition.

How can landlords comply with the Fitness for Human Habitation Act?
Landlords who haven’t inspected their rental properties for a while – perhaps because they’re using a managing agent – may find it worthwhile visiting their properties and checking that everything is in order.

Courts will have the authority to order landlords to carry out repairs and they will be able to award damages to tenants.

Are there any exceptions?
Your landlord is responsible for fixing a lot of problems in your home. However, there are some exceptions:

  1. Problems caused by tenant behaviour
  2. Events like fires, storms and floods which are completely beyond the landlord’s control (sometimes called ‘acts of God’)
  3. The landlord will not repair your possessions or furniture belonging to previous tenants
  4. If the landlord hasn’t been able to get permission from certain other people.

Guide for landlords
https://www.gov.uk/government/publications/homes-fitness-for-human-habitation-act-2018/guide-for-landlords-homes-fitness-for-human-habitation-act-2018

Guide for tenants
https://www.gov.uk/government/publications/homes-fitness-for-human-habitation-act-2018/guide-for-tenants-homes-fitness-for-human-habitation-act-2018

If you would like to know more, or just have a few questions how this may effect you. Call our residential letting agent expert Nicola Bremner (MARLA) on 01252 622550

Ban on Letting Agent fees

The Tenant Fees Act 2019 is coming into effect for all tenancies signed on or after 1st June 2019.

A major change for the lettings industry is coming into effect for all tenancies after 1st June 2019 in England. Called the ‘Tenant Fees Act 2019’, it could cause quite a stir along the way.

The act sets out the governments approach to banning fees paid by tenants in the private rented sector in England. The act is aimed at rebalancing the relationship between tenants and landlords, with the wider aim of making everything fairer, improving quality and creating more affordable rental properties.

From 1st June you cannot require a tenant to make certain payments in connection with a tenancy. You cannot require them to enter a contract with a third party or make a loan in connection with a tenancy.

The only payments that can be charged in connection with a tenancy are:

  1. the rent
  2. a refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above
  3. a refundable holding deposit (to reserve a property) capped at no more than one week’s rent
  4. payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher
  5. payments associated with early termination of the tenancy, when requested by the tenant
  6. payments in respect of utilities, communication services, TV licence and council tax; and
  7. A default fee for late payment of rent and replacement of a lost key/security device, where required under a tenancy agreement

For further details on the ACT check out the information on the legislation.gov.uk website
https://www.legislation.gov.uk/ukpga/2019/4/enacted

The landlords guild also have a good article
https://www.landlordsguild.com/understanding-the-tenant-fees-act-2019/

Guidance
https://www.gov.uk/government/publications/tenant-fees-act-2019-guidance

If you would like to know more, or just have a few questions how this may effect you. Call our residential letting agent expert Nicola Bremner (MARLA) on 01252 622550

Client Money Protection (CMP) scheme becomes a legal requirement

Membership of a Government Approved Client Money Protection (CMP) scheme becomes a legal requirement for all agents in England dealing with residential lettings across England from Monday 1 April.

What is Client Money Protection (CMP)?
Client Money Protect is a client money protection membership scheme designed to protect client money held by property agents and professionals. The member’s clients are protected in the event that the member misappropriates the client money held in the course of running their business.

Is client money protection mandatory?
Yes, mandatory Client Money Protection becomes a legal requirement on April 1st 2019. All property agents will be required to be part of an approved Client Money Protection Scheme.

How can you tell if an Agent is a member?
An agent must display a certificate confirming membership of an Approved CMP scheme both in branch and on the website.

Do you provide a hard copy of your Client Money Handling Procedures?
Yes we do. Please call in to our Lettings branch in Fleet to obtain a copy

Is McCarthy Holden a member?
Yes we are. You can view our certificate here.

Where can I find out more about the scheme?
Mccarthy Holden are members of the property mark scheme. More details can be found at http://www.propertymark.co.uk/working-in-the-industry/member-requirements including:

  • Client Money Protection (CMP)
  • Client Account Reporting
  • Professional Indemnity Insurance
  • Independent Redress
  • Money Laundering Regulations
  • TPO Codes of Practice
  • Company Declaration

Who are propertymark?
See http://www.propertymark.co.uk/about-us/


Check out our ‘Seven step’ tried and tested process for letting your home safely.

For property in Fleet, Hartley Wintney, Camberley, Wokingham, Odiham and surrounding areas.

Call Nicola Bremner (MARLA) on 01252 622550 for a full appraisal of your property now!

Tenant Fees Act (2019): An overview

The Tenant Fees Act will come into force on 1st June 2019. At the centre of the new law is a ban on all tenant fees, including agency and any third party fees.

tenant fee act 2019

The guidelines from the government will come soon, but here’s what we know so far about the Tenant Fees Act (2019).

What does the Act comprise of?

Here are the key parts of the Act:

tenant fee act 2019

All Payments Are Prohibited Except Rent, Utility Bills, Deposits (and 2 Exceptions)

Tenants will no longer be responsible for any costs except: the rent, the tenancy deposit and a holding deposit (more on these below).

This means it is no longer possible to ask tenants to cover the cost of their own referencing. Tenants will not be able to be charged for check-in, inventory or set up fees. These fees will be deemed prohibited by law

The only two exceptions are two forms of ‘default’ fee. These fees are chargeable during the tenancy in the following circumstances, provided the relevant clauses are written into the tenancy agreement.   

a) Late Rent Fees

Fees will be charged for rent payments that are over 2 weeks late. The fees can be up to 3% over the prevailing Bank of England base interest rate. Because this is an annual interest rate, the amount will need to be calculated for the pro rata interest accrued on the outstanding rent.

For example:

The tenant is 30 days late for one £1,500 rent payment.

The base rate of interest is currently 0.75%, therefore the amount the tenant can be charged for is the outstanding rent plus a fee of 3.75% of outstanding rent, pro rata for the 30 days. (3.75% of £1,500 is £56.25.) 30 days is 30/365 of the yearly rate. Therefore, the pro rata amount is calculated by multiplying £56.25 by 30/365, which is £4.62.

Landlords will of course still be able to serve Section 8 notices for late payment of rent provided the rent is 2 months or more in arrears.

(b) Lost Keys

Tenants can be charged for losing their keys (or other security device) but the charge must be a reasonable amount for which evidence must be provided.

Both default fees will need to be included in the tenancy agreement to be able to charge them, and previous rules about fair clauses will still apply.

It has also been advised that landlords shall be able to charge up to £50 for a change of tenant, and with regards to an early surrender request by a tenant, a landlord shall be able to charge the tenant for the remaining unexpected void period.

tenant fee act 2019

Cap on Tenancy Deposits

The amount of security deposit that can be requested is being reduced to 5 weeks for AST’s (Assured Shorthold Tenancies) and licences where the rent per annum is up to £50,000, and up to 6 weeks for those tenancies over £50,000 in rent per annum.

This applies to all tenancies regardless of the reason a higher deposit was taken previously. (ie: if there was poor credit etc.)

The ability to request a higher deposit due to the applicant having a pet has also been removed, however, if landlords will consider a pet, when marketing the property, it can be advertised at 2 rental amounts (ie: £1,500 p.c.m. or £1,550 p.c.m. with 1 x pet)

tenant fee act 2019

Cap and New Rules on Holding Deposits

Holding deposits will be limited to one week’s rent.

The holding deposit can only be held for 15 calendar days unless another ‘deadline’ date is agree in writing subsequently by both parties.

After the deadline, the holding deposit must be repaid within 7 days.

The holding deposit must be returned to the tenant via a refund or by being put towards the first rental payment if agreed in writing.

There are some exceptions. In these cases the holding deposit shall be forfeited  but a reason must be given in writing to the tenant within 7 days:

  • The tenant withdraws
  • The tenant doesn’t take all reasonable steps to enter the tenancy in the required time
  • The tenant fails a right to rent check
  • The tenant provides misleading information which materially affects their suitability to rent the property
tenant fee act 2019

What Are the Penalties to Landlords Who Charge Tenant Fees?

Any person,  landlord (or agents) or any third parties who charge fees to Tenants could face paying huge fines.

The first offence would be a civil offence, with a fine of £5,000.

If the offence is repeated within five years, this would be deemed a criminal offence and levies a fine up to £30,000.

Local Trading Standards organisations will enforce the ban.

Luxury Property Rental Preview

photo period property

This property preview is showcasing a beautiful country house, which is due to the market soon with an anticipated guide range of £7,500 to £8,500 p.c.m.

The property is a significant freehold steeped in history dating to the 15th century. Formerly the Manor House of Great Bramshill Manor, the house began as a timber framed hall in the late medieval period and it was progressively extended and developed through to the 19th century.

The result is a substantial Grade 11* listed country house of several periods, culminating in extensive refurbishment and development between 1990 and today by the current owners; resulting in a rare achievement where historic character and subtle contemporary fuse perfectly.

photo property farmhouse kitchen
farmhouse luxury kitchen

There are many notable historic architectural features including three massive Tudor chimney stacks, each with three separated diagonal flues on a rectangular base.

Inside the house there still exists magnificent Tudor brick fireplaces with four entered arches and the original 15th century winding staircase has been preserved.

photo property banqueting barn
banqueting / entertainments barn

Immediately outside there is a magnificent Grade 11 listed banqueting barn dating to the 17th century, formed of six timber frame bays, with gabled projecting porch. Leading off of this barn there is a wonderful gym space with shower.

photo property banqueting barn
banqueting / entertainments barn
photo property banqueting barn
gymnasium

Within the grounds of around 3.3 acres the formal gardens and entertaining areas are of special note, featuring a heated swimming pool and a tennis court.

photo property swimming pool
swimming pool
photo property swimming pool
swimming pool with entertainments barn in background
photo property tennis court
tennis court

For further details about this property, telephone Jacy Barwick on 01252 842100 or visit our residential letting agents and property management experts

The unknown, or a property market that bucks the Brexit fears?

estate agent sold board

The Market 2018

Let us start with 2018, which was peppered with challenging market conditions for residential property sales.

Because our trading year runs January to December we can report on the full picture for 2018, which may indicate the direction of travel for 2019.

Surprisingly, some branch productivity levels for house sale revenue was at or above 2017 levels, especially in the village locations. That outcome however doesn’t for one moment disguise the fact that during the first half of 2018 we saw one of the poorest levels of house sale transactions for some time, however, buyer positivity surfaced in the summer and remained reasonable through to December despite the increased chaos around Brexit.

When we say house sales were up in the second half of 2018, we are talking about house sale volumes not prices. Large house price gains are gone for a while, but like all markets when they rebound from a low they come back with a sharp and fast uptake.

The rental market performed extremely well in 2018, with a notable uplift in activity for high end rentals outside of London, especially in our core area of operation on the Berkshire / Hampshire borders.

Properties taken to the rental market in the £7,000 to £10,000 p.c.m. sector frequently saw rental offers from multiple tenants. This was driven by high end house buyers deciding to pop into a property rental for the next year or so, using some of the stamp duty funds they would have allocated on a property purchase around £2.0m. or £3.0m., and then wait and see how property values shape up post Brexit.

house let
High end rental activity compensated for house sales

One certainty

One thing that is certain, is that uncertainty impacts on the property market especially around the times of a General Election or a Referendum. How this uncertainty works its way into tangible outcomes for 2019 is not straightforward and varies in different house price sectors of the property market.

In the short term, house buyers generally will be more cautious and slower in their decision making. This doesn’t mean house prices will fall, because buyer demand remains steady and employment levels are excellent. There is the prospect of a flat market in respect of property prices, however, discerning house buyers are seeing the current market conditions as an opportunity to move whilst prices remain static. House sellers will sell successfully in the 2019 market, but they can’t expect a fancy or inflated price and must engage with the reality that over pricing will fail in a market where buyers are cautious.

Different sectors, different outcomes in 2019

Different market sectors will have different outcomes in the forthcoming months ahead. Buying decisions on property sales from around £250,000 to £1.5m. are mostly made by very localised factors such as schooling, access to work, general employment levels and family situations ranging from the three D’s (death, divorce and debt) through to the three N’s (new job, new baby, new beginnings). Decisions around such matters of day to day life will continue to be made by house buyers against the backdrop of political uncertainty, so house sales will be maintained at the current level with price sensitivity being the watchword.

Further up the property price sector, and especially in the £2.0m. to £6.0m range house buyers will be more influenced by global and political factors so we could see further negative price impacts in this sector. Savvy top end buyers are playing a waiting game, but they are there on our books and will respond to excellent marketing and a competitive price strategy.

House sellers and buyers should approach 2019 with realistic expectations, engaging positively with the new beginnings for the country and house moving opportunities and, who knows, there might well be some pleasing outcomes to report at the end of 2019.

We wish you a happy Christmas and the very best for 2019.

 

John Holden – Chairman and Managing Director McCarty Holden

POST BREXIT IMAGE LEAP

House hunting starts between Christmas and New Year

The Christmas and New Year 2019 magazine In The Country & Town

The time between Christmas and New Year is a time for people to relax, read magazines and it’s when people start house hunting. So having a property featured in the lifestyle and property magazine In The Country and Town, could be a smart move for house sellers and landlords alike.

Over Christmas and New Year people take time out to relax and indulge in the pleasure of reading magazines, so a special edition of In The Country and Town is being distributed over the festive season.

If you are thinking of selling or letting a property, this is the ideal opportunity to get the attention of buyers and kick start your plans to move house in early 2019.

A lifestyle and property magazine with reach

This leading lifestyle and property magazine reaches thousands of buyers, search agents and tenants from London to Beijing, all of whom will receive the ‘In The Country and Town’ magazine in time for Christmas and New Year 2019.

The Opportunity for house sellers to appear in this magazine, without obligation or cost unless the property is sold or let is a big appeal.

The real story of this successful magazine is that it brings new buyers to the market, many of whom are not actively in the market looking around agents or property portals, hence the reason we tag the magazine name with ‘Creating the inspiration to move.’

Does it work?

This quality magazine is showcasing wonderful content from stunning properties, to celebrity chefs and motoring features, great interior design, market insight, politics and gardening. So, does it work?

Thousands of copies of each issue are distributed by Royal Mail and many more by direct distribution. Looking back on previous issues, there are many examples of properties which were sold directly from this magazine, despite these properties already being on the open market on property portals such as Rightmove. So yes this old fashioned print marketing can work and in many cases outperformed the digital property portals such as Rightmove. Take a look at this example.

farm sold
The house above sold as a result of the successful buyer picking up a copy of the magazine in a railway carriage travelling from Waterloo to Fleet

How to advertise without obligation or cost

So in summary, if you are thinking of selling or renting a fine home then don’t just focus on digital marketing but in addition think about the role of quality print. Fortunately at McCarthy Holden we are leaders in digital and video marketing as well as professional print.

Without obligation or cost, unless McCarthy Holden sell or let your property, you can have your property promoted in our property magazine. You simply give McCarthy Holden the instruction to promote your property in the next issue of In The Country & Town and online also – all on a no sale no fee basis.

Then sit back and let the power of high-end professional print and digital marketing go to work.

The pages will be filled with property, features and advertising on a first come first serve basis, so contact your nearest McCarthy Holden branch for details and if required a free no obligation valuation.

Who knows, early 2019 could be a Happy New Year for some house vendors and landlords!

magazine photos

Rental Boost £7,000 to £10,000 p.c.m.

Uplift in activity for high end rentals outside of London

High end rental property

During 2018 there has been a notable uplift in activity for high end rentals outside of London, especially from our perspective on the Berkshire / Hampshire borders.

Recent properties taken to the rental market in the £7,000 to £10,000 p.c.m. sector have seen rental offers from multiple tenants, so what’s driving this demand?

With residential house sales sub £2.0m. seemingly trading well as we approach the close of 2018, the over £2.0m. sector is still on the quiet side, with a number of high end house buyers deciding to pop into a property rental for the next year or so, using the stamp duty funds they would have allocated on a property purchase around £2.0m. or more, to pay for the property rental instead of going into the Government coffers by way of stamp duty (about £154,000 at £2.0m. and £274,000 at £3.0m.).

Take the property shown above, which is a typical example of a fine home that recently went to the rental market and discovered interest and offers from multiple potential tenants.

The medium term outlook for top end rentals is positive, and for home owners selling in the £2.0m. to £5.0m. sector there could be good news post Brexit, because the level of hot buyers in rental property looking to exit and buy will be at a good level.

The news for house sellers is that you can and will sell successfully in today’s market, but don’t expect a fancy or inflated price.

Large house price gains are gone for a while, but like all markets when they rebound from a low they come back with a sharp and fast uptake. Savvy buyers know this and are taking care of business now. The hot houses sales market post Brexit could be the £2m. to £5m. sector. In the meantime home owners with such luxury property, in prime real estate areas such as Finchampstead in Berkshire, can take time out from selling and enjoy some extra dividends in the rental market.

If you would like to know more about the market for rental property in the £7,000 to £10,000 p.c.m. sector, do email Nicola Bremner nbremner@mccarthyholden.co.uk

Nicola Bremner Residential Lettings Director
Nicola Bremner M.A.R.L.A. - Director McCarthy Holden