Rent Collection Solicitor
The Rent Collection Service from R. James Hutcheon Solicitors is a low cost rent collection and landlords legal protection service for private residential landlords in the UK.
Rent Collection & Private Landlord Information
- By Rent Collection Solicitor
- Published 26/04/2008
With demand for housing in the private rented sector likely to soar due
to the credit crunch, the Association of Residential Letting Agents,
ARLA, has warned agents and landlords not to take advantage by cutting
corners.
ARLA pointed out that both the law and best practice has moved on a long way since the early 1990s when the last housing crisis produced soaring rental demand, cowboy agents and rogue landlords.
These days, as well as the duty of care that landlords and letting agents owe to tenants, compliance with new legislation and operating to a code of best practice is seen by most to be in the interests of everyone.
However, speaking at the Landlord and Buy to Let Show at the weekend, ARLA head of operations Ian Potter said: “We are still worried that some landlords may try to cut corners and not comply with legislation covering safety and the protection of tenancy deposits. We are also worried that there could be an upsurge in lettings agencies opening for business, without being members of the professional bodies, having the right qualifications and providing clients money protection.”
He pointed out that it was the upsurge in the number of rogue agents and cowboy landlords in the early 1990s that led ARLA to introduce bonding to protect deposits and rents and to insist on qualified staff in the offices of all their regulated members.
“As a result, the lettings industry has grown from a cottage industry into a highly professional sector of the housing market. It is now widely understood that it is however, in the interest of landlords and agents to comply with regulation and best practice because it helps to prevent problems,” he said.
Problems can be avoided by drawing up a proper tenancy agreement, taking inventories and being covered by mandatory Tenancy Deposit Protection. Best practice also includes taking out specialist insurance cover for the lettings market and service contracts for gas and electrical appliances.
Mr Potter said: “The lettings industry is better able than it was nearly two decades ago to cope with rogues and cowboys. This is due to the activities of the professional bodies leading to increased expectations from the consumer. These are complimented by the legislative framework now in place. But, it still remains ARLA’s stated aim that every letting agent must be licensed and landlords should become members of accreditation schemes.”
Meanwhile, new investors hoping to get into the buy-to-let market and existing landlords looking to extend their portfolio will find it harder to get funding following news that five more lenders have joined a growing list of institutions unwilling to offer products for this type of investment in the current climate.
Last year there were more than 3,600 buy-to let-mortgage products but this figure has now dramatically been reduced to around 600 as the credit crunch begins to bite.
Before the credit crunch raised fears of a downturn in the UK economy, landlords were able to get 90 per cent buy-to-let mortgage but these rapidly disappeared. Now loans offering up to 85 per cent of property value are going the same way.
The withdrawals were announced in the same week that the Government revealed a plan to unblock the flow of credit between banks by issuing bonds to encourage them to start lending to each other again.
Exact details are yet to be announced, but broadly the Bank of England will grant Government bonds in exchange for securities backed by UK mortgages.
Critics say it looks as if the Government is once again bailing out the banks with public money and that there is a real danger the tax payer could end up footing the bill.
But the Bank of England say tax payers’ money will not be at risk.
It is understood Mervyn King, the Governor of the Bank of England, has been working on the plan for more than a month.
Financial analysts warn that he must tread carefully as the move is being made fairly soon after the Northern Rock crisis which forced the government to us billions of pounds of public money to put together a rescue plan before nationalising the bank.
ARLA pointed out that both the law and best practice has moved on a long way since the early 1990s when the last housing crisis produced soaring rental demand, cowboy agents and rogue landlords.
These days, as well as the duty of care that landlords and letting agents owe to tenants, compliance with new legislation and operating to a code of best practice is seen by most to be in the interests of everyone.
However, speaking at the Landlord and Buy to Let Show at the weekend, ARLA head of operations Ian Potter said: “We are still worried that some landlords may try to cut corners and not comply with legislation covering safety and the protection of tenancy deposits. We are also worried that there could be an upsurge in lettings agencies opening for business, without being members of the professional bodies, having the right qualifications and providing clients money protection.”
He pointed out that it was the upsurge in the number of rogue agents and cowboy landlords in the early 1990s that led ARLA to introduce bonding to protect deposits and rents and to insist on qualified staff in the offices of all their regulated members.
“As a result, the lettings industry has grown from a cottage industry into a highly professional sector of the housing market. It is now widely understood that it is however, in the interest of landlords and agents to comply with regulation and best practice because it helps to prevent problems,” he said.
Problems can be avoided by drawing up a proper tenancy agreement, taking inventories and being covered by mandatory Tenancy Deposit Protection. Best practice also includes taking out specialist insurance cover for the lettings market and service contracts for gas and electrical appliances.
Mr Potter said: “The lettings industry is better able than it was nearly two decades ago to cope with rogues and cowboys. This is due to the activities of the professional bodies leading to increased expectations from the consumer. These are complimented by the legislative framework now in place. But, it still remains ARLA’s stated aim that every letting agent must be licensed and landlords should become members of accreditation schemes.”
Meanwhile, new investors hoping to get into the buy-to-let market and existing landlords looking to extend their portfolio will find it harder to get funding following news that five more lenders have joined a growing list of institutions unwilling to offer products for this type of investment in the current climate.
Last year there were more than 3,600 buy-to let-mortgage products but this figure has now dramatically been reduced to around 600 as the credit crunch begins to bite.
Before the credit crunch raised fears of a downturn in the UK economy, landlords were able to get 90 per cent buy-to-let mortgage but these rapidly disappeared. Now loans offering up to 85 per cent of property value are going the same way.
The withdrawals were announced in the same week that the Government revealed a plan to unblock the flow of credit between banks by issuing bonds to encourage them to start lending to each other again.
Exact details are yet to be announced, but broadly the Bank of England will grant Government bonds in exchange for securities backed by UK mortgages.
Critics say it looks as if the Government is once again bailing out the banks with public money and that there is a real danger the tax payer could end up footing the bill.
But the Bank of England say tax payers’ money will not be at risk.
It is understood Mervyn King, the Governor of the Bank of England, has been working on the plan for more than a month.
Financial analysts warn that he must tread carefully as the move is being made fairly soon after the Northern Rock crisis which forced the government to us billions of pounds of public money to put together a rescue plan before nationalising the bank.
