industry news


A third of tenants sublet without permission


A


third of tenants are subletting without their landlord’s consent and four out of 10 tenants admit they plan to sublet


in the near future without telling their landlord. The study by PropertyLetByUs.com, a leading online letting agent, shows that the majority of tenants (96 per cent) are subletting the property for a short time to help a family member or friend out and 82 per cent claim they are subletting to help pay the rent. Over half of tenants (52 per cent) say they planning to sublet their property in the near future, with the landlord’s consent. A further 78 per cent of tenants think they should be able to sublet the property without the landlord’s approval. Subletting is becoming one of the main


grounds for a tenant to be evicted, partly because of the increasing popularity of short- term lets and websites offering these services.


Regular checks


In response, Jane Morris, managing director of PropertyLetByUs.com has urged landlords to make regular checks on their property to check for additional occupants. “Many tenants will try to hide the fact they are subletting, so the warning signs can be excessive rubbish and accelerated wear and tear. There can be increased mould and condensation with more occupants. Landlords can also face


expensive repairs for damage and redecoration costs, to bring the property up to the standard it was at check-in. “Illegal subletting falls under tenant fraud and


renting a property makes landlords vulnerable to fraud. It is vital that landlords and agents carry out thorough pre-letting checks. The purpose of referencing a tenant is threefold - to check the person is who they say they are; that they can afford the rent and that they have honoured past commitments. “Last year, the Government said it planned to make it easier for tenants to sublet a room by legislating against the use of clauses in private fixed-term tenancy agreements, that expressly rule out subletting, or otherwise sharing space on a short-term basis. However, it has not yet set a date for a consultation on the plans.” PropertyLetByUs.com has put together some tips on what evidence to look for if you are suspicious that a tenant is subletting:


• It pays to make regular checks on the property – every 3-6 months is advisable;


• The tenants will be hiding evidence of extra tenants, so look out for additional clothing and shoes; excessive rubbish for the number


“Subletting is becoming one of the main grounds for a tenant to be evicted”


of registered tenants; additional bedding like sleeping bags and pillows; suitcases and rucksacks; and extra toothbrushes; and


• Before taking on a new tenant, make sure you carry out a thorough reference to ensure you know who your tenant is.


Broken rules


Research carried out by Direct Line Landlord Insurance has revealed that one in seven renters have broken one or more conditions in their tenancy agreement. The research found that although most


tenants (65 per cent) have stuck to the rules, 15 per cent say they have broken the terms and conditions of their tenancy. A further 9 per cent said they did not have a contract. More than one in ten renters (11 per cent) claimed they were unsure whether they had actually broken any rules. The rules which tenants say they bend the most range from:


• failing to pay the rent on time or at all (25 per cent);


• failing to regularly check the smoke or carbon monoxide alarm (10 per cent);


• smoking indoors (21 per cent); • keeping a pet (18 per cent); and • damaging or making alterations to the property (17 per cent).


The penalties for breaking the rules are said to include losing some or all of the deposit, paying for any damage caused and in some extreme cases being evicted. More than one in five tenants say that their landlord never found out about the misdemeanours.


Two thirds of private landlords plan to raise rents to cope with recent tax increases according to a major new survey. A survey of almost 3,000 landlords by the


Residential Landlords Association also found the same proportion do not plan on purchasing any additional properties to add to their portfolio. Recent tax changes have included restricting


“Nearly a third of landlords are considering leaving the market altogether”


the payment of mortgage interest relief to the basic rate of income tax, raising stamp duty by an extra three per cent on the purchase of homes to rent and taxing landlords’ income and not their profit. Nearly a third of landlords are considering


leaving the market altogether despite predictions one million more new homes to rent are needed by 2021 and evidence that institutional investors in the rental market are not delivering the homes needed.


Private rents set to rise further following tax increases Increases


A total of 56 per cent are planning to increase rents in the next 12 months to offset the impact of changes to mortgage interest relief. This will most negatively impact families, with 63 per cent of landlords reporting letting to tenants with at least one child. In other survey findings:


• a majority of landlords (54 per cent) do not have confidence in the future of the sector;


• 58 per cent say the tax changes will hit plans for investment in their properties;


• 70 per cent anticipate further government policies aimed at landlords in the near future;


• 86 per cent of landlords report they have a good relationship with their tenant;


• 82 per cent said their tenants pay their rent on time.


The current average tenancy period is three


years suggesting the majority of tenants are happy and secure in their current home. Nearly three quarters of landlords (73 per


cent) have not attempted to remove tenants from their property in the last 12 months and


www.housingmmonline.co.uk | HMM November 2016 | 19


of those who have 70 per cent said that this was due to rent arrears or abuse of the tenancy. Three per cent were related to rent increases.


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