Housing Minister Grant Shapps has set out proposals to help ensure tenancy cheats, who deny social homes to families in need, will face justice.

The Minister set out proposals to criminalise the abuse of social homes – such as unlawful subletting and key-selling – with a possible two year jail sentence. He said the plans could free up thousands of homes for housing waiting lists.

Tenancy cheats can earn thousands of pounds a year renting their social homes out to private tenants – but if caught, may currently face no greater penalty than losing their tenancy.

Mr Shapps wants to see much greater legal consequences for these cheats – and so is consulting on proposals that would introduce specific criminal offences for tenancy fraud, such as those which already exist for social security fraud.

Some estimates suggest that between 50,000 and 160,000 social homes are currently being unlawfully occupied across the country.

The minister said the plans would also strenghten councils’ legal rights as landlords to help them detect and prosecure tenancy fraud more effectively and return lost revenue back to local coffers.

Proposals include: a new criminal offence with a maximum sentence of two years’ imprisonment and a fine of up to £50,000 if the case goes to the Crown Court, proceeds of tenancy fraud to be reimbursed to the social landlord in whose stock the fraud was committed – rather than being confiscated by the State – and more powers for local authorities to investigate social tenancy fraud through better access to data from banks and utility companies. While councils can currently request data, organisations can refuse to provide it. The proposed changes would oblige them to comply.

The Guardian newspaper recently ran a poll entitled ‘Is the Rental Market Working?’, which asked the public for it’s opinions on the current state of the sector. The findings, published on the Guardian’s website, revealed some interesting results.

According to the poll, an overwhelming majority (94.8%) commented that the rental market is not working. The poll revealed the area that most needs improving is an increase in housing supply, with 43.7% claiming this to be the biggest flaw in the market.

The poll revealed that the second biggest improvement needed is to improve tenants’ rights in line with other European countries, while 20% of those who took part in the survey wanted to see increased taxes on second homes.

Other areas for improvement include some sort of encouragement of long-term tenancies, and the ability to be able to force letting agents to join a redress scheme.

A small percentage from poll (1.8%) also wanted greater incentives for landlords.

Landlords in England and Wales are reminded of changes to the rules on tenancy deposit protection that kick in this April under the Localism Act.

The main change is that landlords will now have 30 days (not the current 14) in which to protect tenants’ deposits and give the tenant the required information.

Although 30 days sounds laxer, in practice this is unlikely to be the case: courts have apparently found the 14-day time limit too strict, together with the accompanying rules about penalties. The rather odd result was that lawyers had a field day discovering loopholes.

The new rules are intended to close those loopholes. The 30-day limit is intended to be enforced strictly, although courts have some leeway about penalties.

In its ‘Housing Strategy’ report, the Government has stayed away from any form of landlord regulation or any form of regulation for letting agents. Deeming it to be “unnecessary”, the report stated that it did not wish to create any burdens on landlords by introducing regulation.

The Government’s strategy does, however, aim to take measures to tackle rogue landlords, though the report was unspecific in its intentions.

The lack of regulation has not been welcomed by numerous bodies, such as the Chartered Institute of Housing.

The Royal Institution of Chartered Surveyors also expressed disappointment in the lack of Government regulation.

A landlord has received compensation from a council who sent LHA payments directly to tenants who then vacated the property prematurely, leaving the landlord out of pocket for rent due.

The Local Government Ombudsman has supported the position of a landlord, and has required the London Borough of Merton Council to make a £4,000 compensatory award to cover loss in rent because the first LHA cheque was sent to the tenant and misused.

Are you a landlord who is struggling with the minefield which is LHA? Sterling Property specialises in managing LHA lets so why not give us a call and see if we can help.

HM Revenue & Customs is looking to collect unpaid stamp duty of £35m after a surge in the number of companies offering ‘stamp duty tax planning’ deals that HMRC believes could amount to avoidance.

These companies, often operating almost entirely on the Internet, charge a commission that can be up to half the rate of stamp duty payable. By establishing a corporate vehicle to buy the property and then sell it back to the individual, these schemes say they can avoid stamp duty liability. Another common ploy is to pay separately for chattels (fixtures and fittings) so keeping the property price below the stamp duty thresholds.

The tax authority is currently investigating 1,200 people it believes have underpaid tax, and plans to mount a legal challenge to the schemes.

Landlords are being reminded to check their insurance policies, as apparently many do not realise that ordinary home insurance doesn’t cover rental properties. With rents continuing to rise, landlord are well advised to ensure they protect their rental income with a solid insurance policy, including a rent guarantee policy if needed. Some landlords mistakenly believe their policy will pay out if the tenant stops paying the rent.

But as The Times reported, “it often only reimburses lost rent for periods when a property is uninhabitable because of another event covered by the insurance, such as fire”. As always, read the fine print and extend the policy for rent guarantee if necessary. And, do a thorough background and reference check on all tenants before they move in.

In its latest report, the Council of Mortgage Lending showed that, during the second quarter of 2011, remortgaging hit it’s highest level since the last quarter of 2008. Paragon Mortgages’ intermediary survey revealed capital raises was the primary reason for landlords remortgaging during the second quarter.

Though sales to investors have been in decline since 2007, Barratt, the UK’s biggest house builder by volume, recently announced that the downward trend has indeed reversed in the first six months of 2011, as sales to investors, which are mostly in the UK, rose approximately 25% on the same period in 2010.

According to a report by the Council of Mortgage Lenders, buy-to-let (BTL) mortgage lending figures for the second quarter of 2011 received twice the amount of coverage usually seen. An increase of 17% in the number of BTL mortgages was reported, and a 20% increase in the total value of loans.

The number of new BTL loans rose from 27,600 to 32,000 in the second quarter. However, a greater increase was recorded in the value, which rose from £2.9 billion to £3.5 billion.

We’d like to wish all our existing and prospective customers a Happy New Year for 2012.

We’ve some exciting changes planned for the site during 2012 so if you’re looking for a property to rent be sure to keep us in your favourites and check back regularly!

From all the staff at Sterling Properties.

Market research firm, BDRC Continental, recently put together a panel of landlords which revealed some telling attitudes towards the local housing allowance (LHA) cuts.

According to the panel, a substantial number of private landlords who currently rent accommodation to people on housing benefit are planning to withdraw from the sector, or at least reduce the number of tenants they have on LHA.

The research showed that 51% will stop offering LHA tenancies altogether, while one in four landlords have already begun to look at cutting the number of LHA tenants in their portfolios.

The research revealed that a further 32% of landlords will take action when the capping of LHA affects them.

All new LHA applicants will be affected by the new capping procedures and as of January 2012, existing LHA tenants will also be affected.