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David Salusbury, Chairman of the national landlords association, provides more advice on key buy-to-let topics

readers’
Q&As

David Salusbury
David Salusbury

“Section 8 provides 17 grounds under which landlords may seek possession.”

Q How do I go about removing a troublesome tenant?

Provided that the tenant has an Assured Shorthold Tenancy (the default tenure for the private rented sector), there are two options. If the fixed term has ended and the tenancy has been allowed to roll on to a statutory periodic tenancy, Section 21 of the Housing Act 1988 is generally the quickest route to possession. This will not usually involve a court appearance and there is no need for the landlord to provide evidence that the tenant has broken the terms of their agreement. However, if there are specific grounds, for example rent arrears, we may advise landlords to use Section 8 of the Act. This is also the only course of action open to landlords during the fixed term of the tenancy. Section 8 provides 17 grounds under which a landlord may seek possession, eight of which are ‘mandatory grounds’, meaning that if the claim is justified a judge must grant the landlord possession. These grounds include circumstances such as non-payment of rent and anti-social behaviour.

Q How can one student tenant
swap with another?

Use a Deed of Assignment, available from www.landlords.org.uk. This document allows the outgoing tenant to assign all his rights over to the incoming tenant (his replacement). There will be no need to use the Tenancy Deposit Scheme for the replacement tenant if this deed is used.

Q My tenant’s housing benefit payments don’t match the rent period. What can I do?

You have two options: either enter into a new tenancy agreement starting on the day the council pays Housing Benefit or do nothing and they will technically be in arrears for a few weeks.

Q What is Tenancy Deposit Protection?

Tenancy Deposit Protection was introduced under the 2004 Housing Act. It came into force on 6 April 2007. This requires a landlord to protect any deposit taken on any Assured Shorthold Tenancy (AST) after 6 April 2007. Landlords letting private residential property on an AST and taking a deposit should make sure that they comply with the legislation. Failure to do so will prohibit them from serving a section 21 notice to seek possession and could leave them facing a financial penalty. For information, go to www.mydeposits.co.uk

QDo I need a HMO (House in
Multiple Occupation) licence?

The 2004 Housing Act implemented licensing for three-storey properties with five or more tenants. This legislation is complex and there may be exceptions to this rule. There is a ‘flow chart’ on our website at www.landlords.org.uk

Ying Tan
“”
Ying Tan
Managing Director,
The Buy To Let Business

Brokers’ briefs

Despite the disaster stories favoured by some elements of the media, the buy-to-let sector is thriving and the indications are that this will continue. The success of the sector is mirrored by our experience at The Buy To Let Business, where, as specialist buy-to-let brokers dedicated to providing superior service, we continue to grow month on month regardless of the tightened credit conditions.

In contrast to the media stories, the vast majority of investors grow their portfolios quietly, understanding their market and ensuring their success by carrying out due diligence before investing. Figures reported by the Council of Mortgage Lenders show buy-to-let lending significantly increased in 2007 and in the second half of the year totalled £24.1 billion, up £1.9 billion from the first half. Buy-to-let lending in the UK now accounts for 12% of all mortgage advances, compared with just 3% five years ago.

The future market also looks strong with continued availability of housing stock. There is a trend towards increasing rental demand from those unable or unwilling to buy, a growing student population and immigration. Continued strength in the market is shown by many indicators; the Halifax says: “We predict that house prices will be flat during 2008 as a whole. Sound economic fundamentals are supporting house prices. Lower interest rates are also helping to support the economy and the housing market. We predict that the MPC will cut the Bank Rate at least twice more in 2008.”

Like the serious investors, the buy-to-let market is here for the long haul and we look to the future with continued optimism.

For further information about the NLA, email info@landlords.org.uk
or visit www.landlords.org.uk
Alternatively, call:
020 7840 8900