Reminder: Housing Act 1988 Threshold Change 1st October 2010

Reminder: Housing Act 1988 Threshold Change 1st October 2010

In March and again in July we circulated emails regarding this important change in legislation.

To confirm, from 1/10/10 the rent threshold on Housing Act 1988 tenancies assured and ASTs will increase from £25,000 to £100,000 per annum. What this means in practice is that any property with a rent of £8333.33 or less per month will be an AST. Any property with a rent of more than £100,000 per annum will be subject to the normal contractual tenancy.

The transition should have been relatively straightforward, however the last government failed to provide any transition period, This means that various questions have been raised with regard to the registration of deposits and the service of notices. I will try to answer these points in more detail below.

Deposits

The Department for Communities and Local Government (the DCLG) have stated that the intention of the legislation was always to ensure that deposits were protected within 14 days of the legislative change - namely 1/10/10.

However, some commentators point out that section 213 (1) of the 2004 Housing Act states that: 'Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme'. Note the wording deposit paid to a person in connection with a shorthold tenancy. At the time of receiving the deposit it was received in connection with a contractual tenancy and not an AST.

Section 213 (3) goes on to say 'Where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of 14 days beginning with the date on which it is received'. Again, it refers to the receiving of a deposit in connection with a shorthold tenancy. Commentators argue that because the deposit was never received in connection with a shorthold tenancy, section 213(1) and subsequent sub-sections do not apply and therefore, there is no requirement to protect the deposit.

Whilst it is probable that courts will need to provide clarification in this area, the advice from Central office is to follow the guidance from DCLG and protect the deposit and issue the prescribed information within 14 days of 1/10/10.

Service of Notice

It is our understanding that if a notice to quit has been served and expires prior to 1/10/10 then even in the event of possession proceedings taking place after 1/10/10 there will be no AST created because the issue of a valid notice to quit brings the tenancy to an end

If a notice to quit is served before 1 October but expires after, the position is less clear. However our opinion is that the notice will be valid because it would have been the correct notice to serve at the time of service. After the 1/10/10 the normal AST procedures for possession will apply.

As before, it is probably that the courts will need to provide further clarification in this area, and in the meantime we recommend calling the Belvoir Lettings Legal Helpline to discuss any individual cases.

Terms of Tenancy

A potential problem with the change is if the terms of the tenancy in the old agreement are not compatible with an assured shorthold tenancy. Or if there are terms missing from the contractual tenancy that had a landlord or tenant known there was going to be this change they would have incorporated.

However, in essence, often the clauses of the two types of tenancy will be similar, so the terms of the contractual tenancy would continue with the assured shorthold tenancy.

The main difference is likely to be the notice period for a landlord. Some contractual tenancy will no doubt have a clause allowing the landlord to give say one months’ notice. However this will be overruled by section 21 of the Housing Act 1988 and the usual two months notice would be required.

For more information on this, or any other related matter, please do not hesitate in contacting us 01264 366611 andover@belvoirlettings.com or visit our website at www.belvoirandover.com

04/08/10 Belvoir Lettings agent, Andover who have a large selection of property, house, flat and apartments in Andover and Ludgershall are urging landlords with properties for sale to think again.

The lettings specialist points out that the UK housing market is currently painfully slow because of oversupply, while the rental market is seeing exceptionally high demand.

Greg Greatbatch, one of the firms Directors comments: “According to the latest Nationwide Monthly House Price Index, house prices fell by 0.5% in July on the back of weak buyer demand.”

He adds: “It simply does not make sense for landlords to have their properties sitting empty as they try to sell in a stagnant market while we have a shortage of properties for waiting tenants who are clamouring for somewhere to rent.”

However, Mr Greatbatch urges fast action as traditionally, rental property stocks peak in the autumn.

He also reminds “reluctant landlords” who entered the rental market because they have been unable to sell, that recent improvements in the mortgage market could enable them to release equity in their properties while keeping their old homes as buy-to-let investments.

According to the latest Buy-to-Let Index from LSL Property Services, the average UK rent rose 1% in June, to £673 per month, taking the annual gain to 3.2%, or £23 more than a year earlier.

London saw a 1.9% surge, to £942.

For more information, visit the Belvoir Lettings website or call them on 01264 366611

Google releases their property search engine. And guess which Lettings or Estate Agent has the most house, flat and apartments to rent or let in the Andover, Ludgershall, Tidworth & Whitchurch areas? ..... Belvoir Andover Lettings

Google Property Search

Energy Efficiency. How does this affect me as a landlord ?

Belvoir Andover Lettings, whom rent and let properties, homes, houses, flats and apartments in the Andover, Ludgershall, Whitchurch and Tidworth areas of Hampshire have identified that The Department of Communities and Local Government and the Department of Energy and & Climate Change published a document on 2 March 2010 called "Warm Homes, Greener Homes: A strategy for Household Energy Management."

This document sets out the Government's strategies and plans for how to help both tenants and home owners to not only make houses more energy efficient but also how each household can produce their own energy. In the Climate Change Act 2008 the Government committed itself to reduce carbon emissions by 80% by 2050. "Warm Homes, Greener Homes" published now is one step to achieving this goal. In this particular strategy the Government aims to cut emissions by 29% by 2020.

Quoting directly from the new strategy paper on the Government's aim as follows:

• every home, where it is practical, will have loft and cavity wall insulation - an ambition we intend to deliver on by 2015;
• every home in Britain will have a smart meter and display to help them better manage their use of energy;
• up to 7 million households will have had an eco-upgrade which would include advanced measures such as solid wall insulation or heat pumps alongside smart meters and more basic measures;
• people living in rented accommodation will enjoy higher levels of energy efficiency as landlords - private and social - take action to improve the fabric of properties;
• there will be wider take up of district heating in urban areas, such as in blocks of flats, in new build and social housing, and in commercial and public sector buildings; and
• there will be a core of up to 65,000 people employed in the new industry of energy efficiency, and potentially several times more down supply chains. Jobs will include installing and manufacturing energy saving measures or providing home energy advice.

The Government seeks to achieve the above by using the following four strategies:

• New community partnerships and an enhanced role for local authorities, including a requirement on energy companies to consult with local authorities to deliver local area-based programs; and support for district heating;
• Universal standards for the rented sector, including a new Warm Homes standard and proposals for regulation of the rented sector;
• Invest to save, including replacing the existing CERT mechanism with a new energy company obligation, and legislation to enable pay as you save financing that would provide people with eco-upgrades without upfront costs; and
• Support for consumers, including plans for a universal advice service and new standards for installation.

'Pay as you save' means that you will get a long term loan to make your property energy efficient. The loan will be paid back gradually through the savings on your utility bills. If the property is sold, the new owners will take over the savings and the loan.

In the document this is referred to as 'green finance' and it is expected that banks, energy companies and other financial institution will be able to offer sufficient funding for all levels of energy saving measures from insulation at a cost of a couple of hundred pounds to a complete eco upgrade at a cost of £10,000. By suggesting such an approach, it will often not be necessary for a homeowner to pay up front, as they may not have the money.

The Government acknowledges that 'imposing' these new energy measures on landlords mean that it will be costly to the landlord whilst the tenant reaps the benefits from reduced energy bills.

If this type of scheme is to be introduced for landlords the Government acknowledges that it will have to develop a variant of it that is beneficial for the landlord as well as the tenant.

They propose consulting on prohibiting the letting of properties unless the property has sufficient loft and cavity wall insulation. Such legislation would take force at the earliest in 2015.

There are concerns that people will not have sufficient knowledge and understanding in choosing the correct type of energy saving measures and also doubts about the standard amongst those selling and installing these measures. The Government will address this by improving consumer access to information and also offering tailored advice. A certification system will be introduced to make sure that certain standards are met for those involved in this industry and also measures to improve the technical understanding of energy saving measures.

Confidentiality notice

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This information has been prepared for the clients and contacts of Belvoir Lettings Andover. The

information and opinions expressed in this document are not necessarily comprehensive and do not purport to give professional advice.

For more information for landlords and tenants looking for high quality service from their letting or estate agent, please contact us on 01264 366611 or email us andover@belvoirlettings.com

Visit our website www.belvoirandover.com

Join Belvoir Lettings, Andover on Facebook here:http://www.facebook.com/pages/Andover-United-Kingdom/Belvoir-Andover-Lettings/15505665397

Interested in knowing how we, Belvoir Lettings Andover, differ for landlords looking to rent their flat, apartment or house in the Andover, Whitchurch, Ludgershall, Tidworth areas of Wiltshire & Hampshire. Check out our marketing strategy here: http://www.belvoirandover.com/how.html