The past year has prompted many businesses to think about how they work and what could be different moving towards the future. Lockdown and general distancing between people have seen a rethink in the management of assets, especially within the property sector.

It has been a time of reappraisal. Landlords that run businesses from a spreadsheet may well be thinking now is the time to do something different. Technology adoption has accelerated in every sector and property will not and should not be left out.

If you want to grow a portfolio nationally what are the issues?  

There are estate agents that have a branch network but don’t cover the whole of the UK. Some management companies are massive and put the management out to tender or to other branches. A few tech options undertake tenant find or management but not both or were London centric. In addition to solving those specific issues, by using different hubs it often means that working practices differ. Which often leads to a period of adjustment and even confusion.

Tenants’ expectations are higher than ever

If a landlord is developing a nationwide portfolio it can be a challenge to find a nationwide provider that knows the properties and the local area inside out. Tenants are very savvy, and they expect detailed and thoughtful inventories and meter readings alongside information. For example, are appliances integrated? Is their installation recent? Is there a video? Can tenants get a real feel for the property both inside and outside and even local information? All of these attentions to smaller details really offers tenants and landlords the kind of service they expect and deserve. 

Other challenges might also include excellent check in and check out facilities to avoid late fee charges on fuel bills. When things are measured, they are managed and can make a massive difference to all parties involved in a rental.

Landlords are keen to maintain their asset value. 

This can be quite complex but a pertinent consideration especially around the topic of sustainability. In the long term there is a shift towards green finance where low interest rates will be available to energy efficient assets. It’s likely that in future, assets will be less valuable if they do not align to government regulations.

Properties are not inanimate objects but living, breathing assets

Also, one of the best ways to maintain asset value is to consider them as living assets. Your properties should be redesigned and enhanced over time. They are not inanimate objects that do not change. People’s expectations and lifestyle are always shifting, and your property can increase in value when it keeps up with some trends. This is where it is important to use intelligent property and asset management. By thinking carefully about what tenants want then inevitably your property will speak their language and be easier to let and also more marketable.

Consider an individual property’s potential not just the area it sits in

Therefore, we suggest that a landlord should look at the property potential rather than just looking at the value of its location. If a property is attractive people will often forgive other locational factors if this is the property they’ve always wanted. You can add value by knocking living spaces into one or replacing a dated bathroom with a top-quality shower as two examples. It is important to think carefully about the market and about trends and even regulations. If you are on top of your game, then you are rarely in a position when change is forced upon you.

Don’t ignore your properties because things appear to be going well

When a let is going well, and managers are doing an excellent job then the temptation is to stop visiting the property at change of lease because no news is good news. This is probably a mistake. Only you can walk the property and get a feel for the atmosphere, the décor and the current facilities. In addition, it is worth keeping in communication with agents and property managers and the other teams that help manage your properties. When you pick up damage or design issues quickly then they are usually much quicker, cheaper and easier to fix. Think carefully about your relationship with tenants. Some people suggest treating tenants as business partners. If you develop positive relationships with tenants on every level you will probably find the property is looked after more carefully, especially if they know repairs will be attended to quickly and efficiently.

Look for a seamless approach to property management

With technology making life easier for almost everyone Howsy has continued to develop its own software with more exciting innovations to follow Our aim has been to remove unnecessary hassle from the landlord experience. Why have multiple agencies managing properties nationally when you can have one? We pride ourselves on offering a seamless approach which takes away management difficulties.

In Part 1 of the Debt Respite Scheme, Debt Breathing Space legislation article, we discussed the implications for landlords and in Part 2 we delve into the mental health crisis breathing space. Do note however that;

this is only available to someone who is receiving mental health crisis treatment and it has some stronger protections. It lasts as long as the person’s mental health crisis treatment, plus 30 days (no matter how long the crisis treatment lasts). 

Excerpt from UK government publications

This aspect of the legislation is probably the one that has caused much confusion and we felt it was worth quoting the government website again as a starting point.

‘The government committed to develop an alternative route to access the protections for people receiving mental health crisis treatment, so that they do not have to access debt advice first. If an Approved Mental Health Professional (AMHP) certifies that a person is receiving mental health crisis treatment, the AMHP’s evidence can be used by a debt adviser to start a mental health crisis breathing space.

In addition to the debtor, the following people can apply to a debt adviser on behalf of a debtor for a mental health crisis breathing space:

  • any debtor receiving mental health crisis treatment
  • the debtor’s carer
  • Approved Mental Health Professionals
  • care co-ordinators appointed for the debtor
  • mental health nurses
  • social workers
  • independent mental health advocates or mental capacity advocates appointed for the debtor
  • a debtor’s representative’

It is important to understand this aspect of the legislation carefully

Many people have missed its point. The Mental Health Breathing Space can only be issued by a registered mental health professional. No one can go to their GP and ask for one, for example.

The Mental Health Breathing Space is only available to someone who is receiving mental health crisis treatment

That is, being locked up against their will because their mental health is a danger to themselves or their community. This also applies to someone who has voluntarily gone into hospital before the section was implemented. The third group of people will be those dealt with by an emergency mental health team. This means they were thinking about sectioning but decided not to as they thought the person could be cared for at home. This pertains to very serious mental health conditions. 

We are not talking about someone who is depressed or sad and lonely. These are people who regularly and routinely are at very high risk. They are experiencing a crisis and need very specific help. 

Basically, this solution can be applied to a very limited group of situations and people with very serious conditions. It is not a ‘get out of jail free’ card on any level.

The Mental Health Breathing Space legislation differs from a standard breathing space 

This is available to anyone experiencing problem debt. It gives people legal protections from creditor action for up to 60 days. The protections include pausing most enforcement action and contact from creditors. It also freezes most interest and charges on their debts. The time for this is limited to 60 days. Under the Mental Health Breathing Space, the freeze lasts for the length of the mental intervention, however long that might be, plus 30 days. It is not time limited

It may sound like a long period but do bear in mind that most people committed to hospital in this way for more than 60 days will probably want to give up their property anyway. We suggest this number is probably 99.9%. They will not be residing in the property so there are other grounds to terminate the tenancy potentially.

However, we want to emphasise that this is a limited category of people we are talking about that need to be cared for, not evicted.

What about Property guarantors? Are they liable?

As a landlord thinking about property guarantors or joint liable tenancies where one person might be granted breathing space but there is another tenant that owes an equal amount but doesn’t have that. What happens?

A Breathing Space applies to all joint tenants that are part of the same tenancy. But they wouldn’t apply to people on single room lets, these are unconnected. If they are on a joint tenancy it applies but doesn’t apply to guarantors. They are not jointly liable, and their liability is separate and is for different reasons anyway. However, in a joint tenancy you could potentially chase the guarantor.

All of this discussion underlines the importance of the landlord regarding undertaking thorough affordability checks and references. There is a responsibility to ensure that tenants can afford the rent responsibility to pay the rent and also to compare income and expenses etc. during the onboarding stage.

Planning for wastage and possible loss is part of good business planning

There is a wider point that if you are running a sensible business then there should be plans in place to meet objectives and even if your tenants can’t pay for a period of time you should be able to manage this having factored in such a scenario. Basically, a business owner is not running a good business if they can’t weather such a storm. Any decent business has to plan for some possibility of wastage and loss.

Of course, single asset business’ are tougher to factor in non-payment especially through Covid and will possibly change the landlord landscape going forward. Some landlords are walking away while others are increasing their portfolios. In these situations portfolio landlords can typically ride the wave more effectively.

However walking away is not the only solution. Landlord protection is available and is something Howsy offers as part of our Protect plan, which includes rent guarantee to protect your income when your renters can’t pay on time. Find out more.

Can you refuse to rent to someone with known mental health issues?

This is unlawful discrimination and actually asking the mental health question contravenes data protection issues. In fact, asking that question will put you in trouble with the Information Commissioner plus the Equality and human Rights Commissioner. This is definitely not a strategy to pursue. In fact, asking the question won’t give you enough value after all there is not an obvious bright line between past and future health conditions. 70-80 % of the general population have low level health issues. As a percentage these numbers are very high, especially at the moment. Therefore, it cannot be considered as a useful decision point.

If you have questions of your own, get in touch via [email protected] and we will do our utmost to help.

Summary from David Smith

We will have to see how this pans out. However, I do not think this will affect too many people. As we slowly unlock courts and potentially a significant number of tenants saying that they have a Breathing Space move into employment with luck they will enter into a debt solution. In theory everyone gets upset at new legislation but ultimately nothing really changes very much.

Growing rent debt and long notice periods and moratoria will stay in property because of debt solutions. If it doesn’t work out not much will change. After all, landlords need to experience 6 months of rent arrears to start proceedings now.

If you are looking for help in managing your properties, to stay on top of growing legislation, and have access to a legal property expert on speed dial, Howsy can help. Find out more about our property management plans here or book a call with one of our team to find out more.  

11th March 2021 – Update

Yesterday the government announced further support for tenants by extending the bailiff enforced eviction ban and Six-month notice periods until atleast the 31st May. Exceptions to the ban continue, with regards to anti-social behaviour and fraud.

Read the latest government press release here.

How Howsy can help protect landlords during this period

Howsy Protect is one of our comprehensive property management plans. It includes guaranteed rent protection, so your rental income is secure during the most challenging of times.

As an example, some of our landlords who are subscribed to our protect plan, have been able to support renters facing difficult situations over the past 12 months, without impacting their own financial wellbeing.

Howsy Protect also includes appliance and home emergency cover. Check out more here.

Speak to one of the Howsy team, give us a call on 0330 999 1234 or email us and we can begin the process of getting your rent protected.

14th February 2021 – Update

Over the weekend the Ministry of Housing, Communities and Local Government has announced an extension to the ban of bailiff evictions. 

The ban was introduced as a result of the pandemic and was originally due to end in January this year however, it was extended to February and now it has been extended for a third time to 31st March. The announcement can be read here.

At present all we know is that which is included in the press release. However, regulations are expected in the early part of this week. We will update this post as soon as more information is available. 

In the meantime for those that are concerned about this extension, it is important to note that there are exemptions to the ban and they are expected to continue. Unless there is a change the current exemptions include illegal occupation, anti-social behaviour and arrears of 6 months’ rent or more.

The courts are likely to continue prioritising possession claims where there is anti social behaviour, illegal occupation or domestic abuse. Landlords will also continue to be offered the government free mediation pilot to support them and their tenants to resolve disputes before a formal court hearing takes place. 

16th October 2020 – Update

The tenant eviction ban has been in force over the past five months to protect tenants from being evicted by their landlords throughout the coronavirus pandemic. Many individuals are facing financial hardship and struggling to keep up with rental payments due to job losses and a reduction in salary due to being furloughed. Before the ban, many tenants were at risk of eviction from their homes and the government has sought to protect tenants with this initiative.  The English government has also announced that landlords will need to give tenants six months notice of eviction until the end of March 2021. Housing Secretary Robert Jenrick said this is to help protect tenants through the winter months but will keep these measures under review. 

Yet, where there are cases of anti-social behaviour or domestic abuse, this will not apply. Once courts open, they will then priortise those cases and where landlords have not received rent for over a year. 

Our advice to tenants

  • If you are having difficulty paying your rent, speak to your landlord asap and try to come to some arrangement. At least let them know the situation so they can be clear and understand what you’re going through. 
  • If you’re receiving housing benefit or Universal credit currently and unable to be furloughed, you may be able to get a discretionary housing payment from the council. 

What this means for landlords

Although the eviction ban supports tenants, it has left numerous landlords without rental income. Some landlords have said this “blanket approach” is unacceptable. Each landlord is different and in different circumstances. Some landlords may be renters themselves and rely on renting their property out to cover the mortgage for the property they currently live in. Some landlords rely on this income for their pension and financial stability. Ben Beadle, Chief Executive of the National Residential Landlords Association said, “Private landlords cannot be expected to foot the bill for government failure.”

Landlords also need to be given some way to have their income protected if tenants can’t pay their rent. Yet currently, there is no government support available. In some cases, landlords are able to have buy to let mortgage payment breaks but this can impact on landlords looking to get buy to let mortgages further down the line.

Although the current situation we’re facing is no fault of the nation’s tenants, it is simply unfair to expect landlords as the backbone of the rental market to foot the bill for unpaid rent. Not only has the ban been extended but landlords must now face an increased eviction notice period before they can even commence court proceedings. 

With such an unprecedented backlog, there will no doubt be sizable delays that could see landlords face an even longer wait before they can reclaim their bricks and mortar investment. As a result, some could be facing in excess of a year without any rental income.

The Government is yet to provide any form of help other than the rather pitiful buy-to-let mortgage holiday which, in some cases, can impact a landlord’s financial credentials further down the line.

First and foremost, I hope that you and your loved ones are well. We have all read or used the clichés “unprecented”, “uncertain” and “challenging” times, but the fact remains that none of us have seen anything like this.

As a predominantly online business, we were able to adapt quickly to the government restrictions, so it has largely been business as normal for us apart from the team are almost exclusively remote working.

With the situation changing daily, like everyone, we are monitoring the news closely to see how the government will work to ensure that the nation’s landlords and tenants are protected during this period.

On 29 March, the government published full advice for Landlords and Tenants. On 12 May, this was updated to allow property viewings, prepare properties for renting and move home, effectively restarting the lettings market. Whilst there is no specific mention of social distancing, it goes without saying that it is expected all these activities need to happen whilst maintaining a safe distance from others. There is a lot of reliance on all of us to use our common-sense.

Our clear plan will enable people to move home safely, covering each aspect of the sales and letting process from viewings to removals…. [and] is based on the latest guidance to ensure the safety and protection of everyone involved. This critical industry can now safely move forward, and those waiting patiently to move can now do so.

Robert Jenrick MP, Housing Secretary

Protect yourself

Most importantly, make sure you are keeping up to date with government advice. Washing hands, working from home, social distancing – all things that you’ve seen in the news that are important changes for all of us. Whilst it does appear that restrictions are slowly being loosened, for many of us things won’t change immediately.

Protect others

From 10 May, the edict from the government changed from “Stay at home” to “Stay alert”. Whilst there is more that is open to interpretation, the key messages are:

  • Stay at home as much as possible
  • Work from home if you can
  • Limit contact with other people
  • Stay 2 metres (6ft) away from others
  • Wash your hands regularly

If you or anyone in your household are showing any symptoms of coronavirus, then you must self-isolate yourself immediately for the protection of those who are most vulnerable. This is incumbent on all of us.

Response times

Our teams are almost exclusively working from home, and whilst this is not unusual for us as a modern technology company, it is exceptional that so many of us are working remotely at the same time.  As a result, our response times could be affected. We are trying to prioritise responding to urgent requests or those from the more vulnerable, so please bear with us if we don’t get back to you quickly.

However, we are still open 24/7, and we’re on hand to help both landlords and tenants as usual.

As I mentioned, circumstances are changing, and we’re ensuring we’re keeping updated and adapting quickly.  We know that the government is never going to be able to provide details to cover all scenarios.  So in absence of specifics, we hope decision making and issue resolution will be done with a mixture of common sense, empathy and compassion for all.

Click here for advice specific to Tenants

Click here for advice specific to Landlords

Please stay safe and look after each other. 

Calum Brannan
Founder & CEO, Howsy