Piggybank News

September 25, 2014

Should you be joining a Property Redress scheme?

Most Landlords and Letting Agents will be aware that the government has made it compulsory for all Property Agents to join an authorised redress scheme by 1st October 2014.  There have been quite a few articles flying around explaining this obligation and the potential safety net it will offer to Landlords. Property Purchasers, Vendors and Tenants.  The aim is that anyone who feels they are not being treated fairly will have somewhere to go to voice their concerns, with a chance of compensation.

However, what may not have been quite so obvious is the breadth of the government’s definitions of Letting/Property Management/Estate Agent in this regard.  It’s a serious concern because those that don’t sign up risk being fined up to £5,000, via their local council trading standards office.

Essentially any person or business which accepts money in the course of their business for letting, managing or selling property is covered by this act.  So, for example, if you manage a property for a friend and take even “mates rates” fees then you are affected, there are in fact very few exclusions.  (If you would like a full list of definitions then click this link to the Property Redress Scheme website.)

There are 3 schemes currently approved – The Property Redress Scheme, the Property Ombudsman and Ombudsman Services Property.  Of these the Property Redress Scheme is perhaps the most flexible as, alongside Property/ Management/Lettings and Estate Agents, they are also open for other professionals working in the property industry including cleaners, gardeners and inventory clerks.

j0283695Piggy says “Private Landlords, Sourcing Agents and Property Managers are strongly advised to establish the status of their business in relation to this legislation and register with one of the approved schemes before the deadline of 1st October 2014 if required”.


October 25, 2013

Buckinghamshire Landlord Property Investment Show


Above is a link to the booking page of the Buckinghamshire Landlord Property Investment Show.  This is running on Thursday, November 14, 2013 from 10:00 AM to 5:00 PM at Jurys Inn, Midsummer Boulevard, Milton Keynes MK9

Tickets are free and the organisers are promising to have key speakers from the industry who will cover topical industry news on legislation, vetting tenants, landlord services etc as well as a number of stalls and displays to browse.


June 4, 2013

The effect of the benefit cap on large families…

I just got off the phone to a lady from the Milton Keynes Council housing team.  We were discussing one of my tenants specifically and the likely effect of the benefit cap on large families in the area.

For those who are unaware, one of the changes to benefits legislation which the government has brought in is a benefit cap.  This is designed to ensure that people are not claiming so much money that they are better off on benefits than in work and was at least partially in response to media reports of very large families living in “millionaires mansions” at the tax payers expense.  It does not apply to families where at least one person is working more than 16 hours a week but of course it would affect very many part-time workers as well as those entirely dependent on benefits.

The cap is placed on ALL benefits which means that whilst benefits are continuing to be worked out based on need, size of family etc; there is a maximum amount per week which can be awarded regardless of this. For families this is £500 per week.

The DWP has identified those families within the borough who are likely to be affected and the Housing Team are extremely busy contacting them all and trying to assist them in working out a new budget.  As part of this process they are recommending that the rent paid should be no more than 30% of their income.

If you work this out at the top income level of £500 per week this means that affordable rent can only be a maximum of £650pcm compared to the current 4 bedroom LHA rate in Milton Keynes of £950pcm and the 3 bedroom rate of £750pcm.  (ie such families will only be able to afford an average 2 bedroom house)  I presume that this scenario is playing out in a similar way across the country.

Is anyone else concerned by this?

April 19, 2013

Selective Liscensing in MK – have your say.

Milton Keynes Council is proposing to introduce Additional and Selective Licensing of private rented sector properties (PRS) across the entire borough of Milton Keynes. Under the Localism Bill Additional or Selective Licensing should only be implemented if there is evidence of a severe and persistent problem with anti-social behaviour which cannot be dealt with by the use of existing powers or legislation.

  • Additional Licensing would mean that every single HMO (not just 3 storey 5 tenants) in the Milton Keynes borough would need to be licensed. e.g 3 nurses sharing a house would need a licence to do so.
  • Selective Licensing would mean that every single rented property (HMO’s and single/family lets)  in the Milton Keynes borough would need to be licensed.

The implications of this would cost landlords thousands of pounds in license fees and ultimately Tenants hundreds of pounds in rent increases as a result.  All properties would be affected regardless of type, location or how well managed they currently are.

Unfortunately there is also evidence from other areas of the UK, where Selective Licensing has been implemented, that such implementation is regarded as effectively declaring a “blight” notice.  As a result many mortgage lenders are refusing to lend either to investors or residential buyers in affected areas.

No evidence of a problem in the PRS has been presented but the Council clearly views this as a revenue generating strategy.

You can read a copy of the Cabinet report here >> http://tinyurl.com/d93ky7q.

On 15/4/2013 MK council announced their intention to hold a public Cabinet meeting two days later to discuss this proposal.  The Milton Keynes Private Landlords Association Committee attended the Council’s Cabinet meeting on 17/4/2013 and made representations on behalf of local landlords. Despite this, the decision was taken by the Cabinet to go out to consultation starting 01 July 2013 at an initial estimated cost to the tax payer of £25k.

We have the opportunity to overturn this decision, and MKPLA will present a written petition supported by over 50 signatures of local residents on Friday 26 April 2013. This petition will be accompanied by the following statement:

MKPLA Call-In of Cabinet Decision – Statement

March 11, 2013

MKPLA Meeting “What do you do about Bad Debt?”

The MKPLA is holding a members meeting on 21st March at the David Lloyd Leisure Club.  This months expert speaker is Gill Constant of Constant and Co, Civil and High Court Enforcement Agents.  Following on from last times excellent talk on possession procedures Gill will be discussing to what extent bad debts can be recovered.

Follow the link below for full details and to book your place.



February 25, 2013

2013 Local Housing Allowance (LHA) rates

The Valuation Office Agency (VOA) has published its new LHA rates – available to view by clicking here – which come into effect on the 1st April 2013.

LHA rates were frozen for a 12-month period from 1st April 2012 until 31st March 2013. Future upratings, whilst still based on market rents, are limited to the rate of the September Consumer Price Index (CPI).  The new rates will apply to all claims made from 1st April but existing claims will not be affected until the date of their annual review.

The rates are based on data supplied by landlords and agents. More than half a million rents are included every month which makes them the most accurate record of the private rented sector. The table below shows how national rents changed between June 2011 and June 2012.  As the September CPI was 2.2% (slightly below the current fairly steady rate of 2.7%) this means that LHA levels in some areas will drop even further behind average local market rents.



Yorkshire & The Humber




South West


East Midlands


South East


West Midlands




North West




North East


To avoid potential public confusion, the April 2013 LHA rates will not appear on www.gov.uk (LHA-Direct) until March 2013.In the interests of transparency, the website publication presents a table of the weekly April 2013 LHA rates and a series of downloadable documents including tables which illustrate the four steps of determining the rates.

To view the new rates visit: www.voa.gov.uk/LHAApril2013.


February 18, 2013

Riding the Property Cycle – the secret to making money in property investment

We are all familiar with seasonal cycles. From a very young age we learn that night follows day, spring follows winter,  harvest follows planting and so on… before the whole cycle starts over.  This very basic understanding of how cycles work can help with your investment decisions. You need to know when to plant the seeds (i.e. invest your money) at the right time so that it will grow and you can gather a rich harvest.

This may sound a bit simplistic but you really don’t need to be an expert stock broker to understand how the property investment cycle works. It is easy to look for clues that will tell you when a market has hit or passed the bottom in terms of prices. This is the point where a property market is beginning to grow and therefore where you should invest to get the best long-term return. Look at the signals all around you and this will help guide your investment decisions.

What makes property investment so interesting is that not all countries are at the same stage in their cycle.  In the EU most are heading into winter and prices are tumbling or at best remain static because few people are buying.  According to property investment company Colordarcy the 5 worst performing  investment areas of 2012 are all EU countries – Ireland, Portugal, Greece, Slovenia and the Netherlands. On the other hand if we travel to the United States, all indications are that after a long winter they are now in the spring (or at a stage where the market is growing). Property in Miami for instance has increased in value by 20% over 2012.

So what of the UK market?

The Nationwide House Price Index has recorded only slight variations in house prices since the start of 2011.  They showed a slight dip in prices overall in 2012 but in the final quarter of the year prices were actually up 0.5%.  The most significant changes have been the continuing increase in the north/south divide and the relative depression of the Irish, Welsh and Scottish housing markets.   This would seem to indicate (in England at least) a market resting at the lowest point of its cycle, poised for Spring growth. When combined with predictions that Bank of England base rates are unlikely to rise until 2017, strong rental demand and rent levels generally on the increase; it would seem that 2013 is a good time for  investors with a medium to long term view to investigate the UK  Buy to Let market.

Full Nationwide report can be downloaded here – House Prices Q4_2012

February 11, 2013

Over a million more face losing their home

Shelter have recently published the results of a YouGov survey conducted on their behalf.

They found that 1.4 million people in Britain are falling behind with their rent or mortgage payments. This represents an increase of 44% over the past year, to 7.8 million people.

Other worrying findings by the researchers were that:

  • almost a million people used a payday loan to help pay their rent or mortgage this year
  • 2.8 million people used an unauthorised overdraft to help pay their rent or mortgage (with 10% of these doing so every month).

Campbell Robb, Shelter’s Chief Executive, said “Payday loans may seem like a quick fix, but the huge interest charges mean things can quickly spiral out of control. It’s vital that anyone who’s having difficulty paying their rent or mortgage gets advice now.”

Full results –  http://yougov.co.uk/news/2012/01/17/roof-over-your-head/

January 28, 2013

Landlords liable for tenants water bills!

As a result of recent changes to the law, under Part 2, s45 (1-3) of the Flood and Water Management Act 2010 that came into force in October 2012, landlords failing to notify the water company of a tenant’s details will become jointly and severally liable with their tenant for overdue water charges. Invariably, the easier option for the water companies, therefore, will be to pursue the landlord for the debt, rather than trying to trace and recover from the tenant.

Landlords should always therefore make a point of informing, in writing (and in view of this measure perhaps by recorded delivery) all the utilities suppliers of the tenants’ full details when a new tenancy starts. Likewise, when a tenancy ends, the landlord should again inform the utilities companies, providing a forwarding address for the tenants whenever possible.

In Milton Keynes, our water supplier is Anglian Water, who provide a handy online form, as well as a telephone number, for landlords to inform them of changes to a tenancy.

However, we have recently been alerted by an MKPLA Member that Anglian Water’s online form does not provide an appropriate receipt for the information provided. Their automated reply email simply confirms that a change of address has been supplied, but does not confirm that any tenant details have been provided. This may also be an issue that is not limited to Anglian Water.

January 21, 2013

Changes to Council Tax Discounts and Exemption

Recent legislation has given local authorities the power to determine classes of Council Tax discount.  This means that different local authorities will be adopting different strategies; the only common thread is that they have to reduce the cost of such subsidies by a minimum of 10%.   Some of the changes will  undoubtedly affect landlords/investors.

In Milton Keynes the Council has adopted the following changes which come into force on 1/4/2013.

Empty Properties
Class C exemption is where a property has been empty (unoccupied and unfurnished) and it currently attracts a 100% exemption for a maximum period of six months. From 01 April 2013 the exemption will be removed and will be replaced with a 100% discount for a maximum period of 1 month, then a nil discount (100% charge) for remaining period.

Uninhabitable Properties
Class A exemption is where a property requires or is undergoing major repair works to render it habitable, or is undergoing structural alterations and it currently attracts a 100% exemption for a maximum period of 12 months. From 01 April 2013 the exemption will be removed and will be replaced with a 50% discount for a maximum period of 12 months.

Read more here >> http://tinyurl.com/bclylju.


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