BBC Warns Landlord Immigration Law is Fuelling Black Market for Fake IDs

The BBC has carried out an undercover investigation and discovered that criminal gangs are providing fake passports and National Insurance cards to illegal immigrants. The Black Market in fake IDs is running rampant and landlords are unwittingly being caught in the middle.

Right to Rent
The government introduced new Right to Rent rules last year. Landlords are now expected to check a tenant’s immigration status before offering them a tenancy. Anyone who can’t prove they have the right to be in the UK won’t be able to rent a property. Or at least that’s the idea.

Unfortunately, undocumented immigrants are paying around £500 to criminal gangs for fake IDs, which are almost impossible to detect. A Home Office spokesperson told reporters that landlords were not expected to be able to spot a fake document. He admitted this was a huge problem.

Dealing in Fake IDs
An undercover BBC reporter had no problem securing fake IDs from dealers all over London. In many cases, the documents arrived within 48 hours of the cash being handed over. He discovered that before the Right to Rent legislation was rolled out, fraudsters were selling between six and 10 fake IDs a week, but now the dealers are extremely busy.

The reported purchases fake documents and took them along to a letting agent, who accepted them without question. The dealers told reporters that the passports were good enough to fool landlords and letting agents, but would not fool an immigration agent at the airport.

Upon close examination, the passports were good quality but did not stand up to closer scrutiny. The lettering was not quite right and photos were the wrong size.

Landlord Wants to Help Those in Need

An enterprising landlord in Leicester has decided to raffle off one of his properties worth £145k at £5 per ticket in a bid to help those in need. He will donate some of the proceeds from the raffle to a local cancer unit.

Amit Sehgal has been a landlord for 15 years. During that time, he has witnessed the difficulties faced by poor and vulnerable families who are struggling since the government introduced a benefits cap. He has a large portfolio of properties in the local area and has had to send in the bailiffs on numerous occasions to evict families who can’t afford to pay the rent.

Effect of the Benefits Cap
One of his tenants, a mother of three, had rented a property from him for six years, but once the benefit cap came into effect, she couldn’t afford the rent and Sehgal was forced to evict her. He described the situation as “heart-breaking”.

Creating a Brighter Future
Sehgal is hoping that at least one needy family will have a better future if they are lucky enough to win the keys to his property. The raffle is easy to enter. Hopeful entrants can buy a £5 ticket online via the website www.winaleicesterhouse.com. The winner will be announced on Facebook when the competition closes on January 25.

The only costs incurred by the winner will be stamp duty and solicitor’s fees, so if you decide to enter, make sure you budget for these costs.

Career Landlords on the Rise

Government tax changes are starting to bite in the buy to let sector, but it looks as if career landlords are unfazed. Research carried out by Countrywide has found that the average buy to let property investor now owns more homes in his or her portfolio.

There are fewer landlords in 2017 compared to 2015 and some 154k landlords have left the buy to let sector. This may be because of the punitive 3% Stamp Duty on second properties, or even because mortgage interest tax relief is being phased out over five years, but what is really interesting about the Countrywide study is that the number of rental homes has increased during the same period.

Government Tax Changes
In 2015, there were 4.9 million private rented homes in the UK. Today, there is 5.1 million buy to let properties. This is surprising, as many experts predicted that the rental market would shrink in response to government tax changes. However, while many smaller landlords have indeed exited the property market, career landlords have expanded their portfolios.

London landlords are the most likely to have larger portfolios, closely followed by landlords in the North East and Yorkshire and Humber.

PRS Favours Experienced Landlords
Increased buy to let sector regulation and changes to income tax relief seem to be favouring career landlords, who are more experienced and are therefore better able to cope with the changing climate in buy to let.

However, despite the seismic shift in the sector, most landlords still only own one property.

Rogue Landlords Profit from Taxpayer Cash

Approximately one-third of homes (an estimated 1.4 million properties) in the private rental sector don’t meet health and safety standards, yet the majority are let to tenants in receipt of housing benefit. This creates an uncomfortable reality whereby the UK taxpayer is paying rogue landlords to provide poor quality housing to vulnerable people.

Current estimates suggest that £2.5 billion in housing benefit is handed to rogue landlords. One-third of this money is paid to landlords in London.

The Housing Benefit Bill is Soaring
This is a lot of money. Government spending on housing benefit has increased dramatically in the last seven years, as more and more people are forced into the private rental sector. The government has attempted to rein in costs, but their cost-cutting exercise hasn’t prevented some landlords cashing in and fleecing the system.

Landlords operating sub-standard housing are happy to pocket housing benefit from their tenants. Reputable landlords reinvest money in their properties, but rogue landlords don’t spend a penny making their properties safe and fit for human habitation. They don’t need to. After all, in many areas, the shortage of affordable housing has led to enormous competition.

What is a Non-Decent Property?
For a property to be classed as “non-decent” in the government’s eyes, it must be unsafe or downright dangerous, have a non-functioning or dangerous boiler, dodgy electrical wiring, poor quality sanitation, or be infested with vermin. 17 per cent of all private rental properties are in this category. Nevertheless, tenants still live in them and claim housing benefit.

Landlords Share Horror Stories

Landlords have shared their horror stories of nightmare tenants with the Manchester Evening News. The tales of woe are very eye-opening, especially for inexperienced landlords not yet savvy to the ways of some tenants.

Cannabis Farm
One landlord described how he only found out his property was being used as a cannabis farm when the police informed him. The landlord’s insurance company refused to pay out, as the damage was linked to “criminal activity”. He lost money on the property as it cost several thousand pounds to fix the damage. He did admit, though, that it was a common problem and he had experienced the same issue before.

Tenant Destroys Property
Another landlord described how a long-term tenant, who had never caused a moment’s bother, trashed the place before she moved out. In all previous inspections, the house had been immaculate, but when the landlord checked it after she left overnight, he found it had been destroyed.

No Pets Clause Ignored
A third landlord let an agent manage their property. Despite assurances from the agent that everything was fine, neighbours began to complain, so the landlord went over to inspect the place.

He discovered filthy carpets, pet damage, despite a ‘no pets’ clause in the tenancy agreement. The tenants promised to clean up, but the situation deteriorated and by the time they were evicted, suddenly, the house was a disaster area with rubbish piled high.

It isn’t surprising that some landlords decide the property sector is not for them.

Landlord Gives Away a Free House

Landlords are frequently maligned in the press, but a recent Channel 4 TV show has shown that some landlords do want to give back to their local community. Marco Robinson, a 49-year-old landlord who spent time sleeping on a park bench with his mum when he was a child, decided to give away one of his properties now he’s the owner of a $25 million property empire.

A Free Home Giveaway
Eight thousand people applied to become the owner of a free house. After an extensive filtration process to see who was the most deserving, the long list was eventually whittled down to three applicants.

Single mum, Holly, lives in a mouldy flat with her baby and feels she won’t ever escape the poverty trap. Jo works, but can’t save for a house deposit. She is also going blind and is fearful she will lose her job and be unable to afford her rent. The Ali family are asylum seekers but their application was rejected. In the meantime, they can’t work and are homeless while their application is being reconsidered.

Giving Something Back
Marco didn’t want to hand out cash. His intention was to help people in a more meaningful way. In the end, he elects to give the flat to Holly so she can make a better life for her baby. Jo is given the deposit so she can buy a home and the Ali family are provided with temporary housing while their asylum application is sorted out.

It was a life-changing event for all three of them.

 

Rental Prices Holding Firm in England and Wales

The latest figures from the Buy to Let index suggest rental price are holding firm, despite political upheaval and concerns over what happens next in Brexit. Research has found that rental prices have increased by 1.6%. Rents in England and Wales are now an average of £827 per month. This is up 2.1% on last year’s rent prices.
North West and Midlands Rise
Rents in the Midlands and North West have shown the greatest improvements. Rents here rose by 0.3% in June and landlords in the West Midlands are charging £609 per month, on average. Wales is also seeing impressive growth. Prices there rose by 3.6% in the last year, which is good news for Welsh landlords. Tenants pay around £872 per calendar month to rent a property in Wales.
London and South West Falling
The only two regions where rental prices fell were in the South West and London. Prices in the South West fell by 2.6% in the last year and prices in London dropped by 1%. However, the average rent in London is still £1,277, which is well beyond what a lot of people can afford to pay.
“Compared to May, rental prices have held firm or continued to increase – suggesting that recent political turmoil has had little immediate impact on renters,” said Richard Waind from estate and letting agent, Your Move. “The squeezing of yields in recent times may also be showing signs of ending as landlord returns remain relatively stable with the North East and North West, in particular, performing well.”

Rental Prices Holding Firm in England and Wales

The latest figures from the Buy to Let index suggest rental price are holding firm, despite political upheaval and concerns over what happens next in Brexit. Research has found that rental prices have increased by 1.6%. Rents in England and Wales are now an average of £827 per month. This is up 2.1% on last year’s rent prices.

North West and Midlands Rise
Rents in the Midlands and North West have shown the greatest improvements. Rents here risen by 0.3% in June and landlords in the West Midlands are charging £609 per month, on average. Wales is also seeing impressive growth. Prices there rose by 3.6% in the last year, which is good news for Welsh landlords. Tenants pay around £872 per calendar month to rent a property in Wales.

London and South West Falling
The only two regions where rental prices fell were in the South West and London. Prices in the South West fell by 2.6% in the last year and prices in London dropped by 1%. However, the average rent in London is still £1,277, which is well beyond what a lot of people can afford to pay.

“Compared to the month of May, rental prices have held firm or continued to increase – suggesting that recent political turmoil has had little immediate impact on renters,” said Richard Waind from estate and letting agent, Your Move. “The squeezing of yields in recent times may also be showing signs of ending as landlord returns remain relatively stable with the North East and North West, in particular, performing well.”

Landlords are Not Fixing Repairs Fast Enough

Figures from Citizens Advice indicate that many landlords are failing in their duty to carry out repairs within a reasonable timeframe. According to the CAB, 40% of tenants have had to wait longer than they should for repairs to be carried out by their landlord.

How Much Time Does a Landlord Have to Make Repairs?
Accepted timescales for landlord repairs are:

• urgent repairs must be carried out within 24 hours and
• problems that cause discomfort or inconvenience must be carried out within 28 days.

Common problems include faulty boilers, dodgy electrics, and water leaks. Many families give up waiting for their landlord to take action and end up fixing the problem at their own cost.

The figures from Citizens Advice show that 31% of tenants took matters into their own hands and made their own repairs. A further 13% paid for a professional to fix the issue and 9% organised repairs but deducted the cost from their monthly rent.

Tenants can Seek Redress
Even though tenants are legally allowed to seek financial redress from an independent ombudsman if their landlord doesn’t carry out timely repairs, only 1% of tenants applied to the court for compensation. When asked why, more than 50% of tenants said they were fearful of the consequences if they forced the issue. In others words, they thought their landlord would instigate eviction proceedings if they complained about repairs not being carried out.

The CAB is calling on the government to give renters in the private sector greater protection from retaliatory evictions if landlords don’t carry out repairs.

The North-South Divide

Everyone knows the extent of house price rises, particularly in London and the South East, but are you aware of how big the divide is between rents in the South and North?

Rents Soar in London
Rental costs in London have soared by 45% in the last ten years. In 2007, the average rent for a property in London was £1,107. Today, it is £1,609. This is the worse hot spot, but tenants in the South East and East of England have not fared much better. In the South East, rents have risen from £848 to £1,085 and in the East, from £740 to £937. Yet the situation is very different in the North.

Rents Fall in the North
In Yorkshire and Humber, rents have remained static whereas, in the North West, they have dropped by 7%, falling from £624 to £581. In the North East, rents have fallen from £539 to £519.

Employment Growth Fuelling Rent Rises
Experts say this is largely due to greater employment growth in London and the South East. Job opportunities have risen by 12.5% in London whereas employment growth in Manchester is only 5%.

Another strong driver of rental prices in London is the rise in homes occupied by multiple tenants.

Landlords can charge higher rents in London because groups of tenants share a property and club together to pay the rent. However, affordability in London is sorely stretched and people are paying nearly half their monthly income on the rent. As a result, rents in the capital are likely to fall by 2-3% this year.