New SDLT Rules Can Help Smaller Landlords

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A little know amendment to Stamp Duty Policy in the Autumn Budget 2017 could help 1,000’s of small landlords in regards to their tax planning.

The changes were billed as “Minor Amendments” and were overlooked by many landlords and their accountants who believed the changes wouldn’t affect them.

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First time having a guarantor?

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I have a prospective tenant who has put forward her mother a guarantor as she has a bad credit rating.

Her mother has an impressive profile on LinkedIn and I think she would be suitable as guarantor.

I have not had a guarantor for any of my tenants before and wondered what other members thought and their experiences were of taking one?

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Manchester Mayor Andy Burnham to address North West Property Conference

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RLA Conference:

Ex Minister and now Manchester Mayor, Andy Burnham, is to address the Residential Landlords Association’s (RLA) “Future Renting North” conference in Manchester on the 24^th of April at the Concorde Conference Centre, The Runway Visitor Park, Sunbank Lane, Altrincham, WA15 8XQ.

Mr Burnham, who in his mayoral manifesto vowed to tackle the housing crisis in the region, has spoken of his plans to create a “Good Landlord Scheme” to ‘better regulate private rented sector landlords’.

As headline speaker at the event Mr Burnham will lead a programme featuring a range of expert speakers addressing issues pertaining to housing and renting, including the Housing and Planning Act, Minimum Energy Efficiency Standards, welfare reform and landlords’ tax.

• Are you ready to operate successfully in the private rental market of the future?
• What can you, as a landlord expect to see change in the coming years?
• And how do you prepare for it?

These are some of the questions the RLA’s Future Renting North conference expects to answer during the day. Attendees will be treated to a full programme covering the latest information about the PRS, and insights from leading industry experts.

The event marks the RLA’s 20th anniversary this year, and as the RLA’s spokesperson says, looking  forward to what the next 20 years holds for our rental businesses is impossible without first looking back to learn lessons from the past.

Mark Butterworth in an article for the RLA says:

“An exercise I did 25 years ago showed that over any 15 year period residential investment beat any other form of investment.

“The tax situation was stable and standards were low – not too many white goods required, not all flats had fridges then.

“Purchase prices were low and yields were high, but so were interest rates.

“Inflation was generally much higher and a reasonable return could be had from savings – this meant that the useful gain was capital appreciation.

“This rule has generally been the norm – run the properties out of income and take the long term view for capital appreciation – it depreciates the debt and appreciates the capital value in a way no other investment is able to.

“Efficient management keeps voids and costs to a minimum, meaning some income is produced after the initial hurdle of buying the investment and getting it up to standard.

“What has radically changed is the investment climate and the tax regime.”

What this conference is designed to do is provide some answers for landlords as to how to manage their rentals in this new climate, and what comes next!

The RLA’s Future Renting North conference is a must for northern landlords looking to future-proof their investments, with information on everything from welfare reform and tax to architectural design to property tech.

The conference will be held on April 24 at the Concorde Conference Centre in Manchester, with delegates also given the opportunity to take a free tour of the iconic aircraft.

Early bird tickets are now on sale priced at £45 for members and £60 for non-members, including lunch and refreshments.

For up-to-date information and tickets visit www.rla.org.uk/conference/future-renting-north/

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Manchester Mayor Andy Burnham to address North West Property Conference | LandlordZONE.

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Jeremy Hunt purchases BTL in name of Ltd co.

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Jeremy Hunt, the Health Secretary, has been slammed in the papers for reportedly purchasing seven flats in Southampton in the name of a new limited company.

Karen Buck, Labour MP, told The Sun: “It’s shocking that while renters wait

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Ending tenancy agreement paperwork?

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Hi all, I have a tenant almost 4 months into his 6 month AST. He is terrible at paying rent and currently 2 months behind.

I do not with to extend his tenancy beyond the 6 months mark.

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Help! Restrictive Covenant

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The restrictive covenant found against my property:

Not to use or allow or cause the property to be used for any purpose other than that of a single private dwelling house.

I would like to know exactly what this covenant states and means in practice.

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Mortgage lenders relaxing their criteria

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Mortgage Lending:

As demand for buy-to-let mortgages has fallen in recent months, due mainly to a penalising tax regime for landlords, but also to a more stringent mortgage approvals regime, competition among mortgage lenders is hotting-up.

Lenders are looking at ways to ease the path for those landlords willing to invest, either with a new mortgage or on renewal. So, those landlords who have been anxious about securing finance may be able to relax a little.

This loosening of the purse strings comes in the wake of changes in the PRS industry: tax reforms which are focussing landlords’ attention on the importance of profit margins; tougher lending criteria; the introduction by government of stricter letting regulations; and more local authority licencing schemes, all of which are combining to professionalise the industry. The upshot is, it gives lenders confidence in those landlords that still want to participate.

Last year there was a fall in buy-to-let lending which led to a 4-year low according to figures produced by the Bank of England. Buy-to-let loans as a proportion of the total have dropped from 21.4 per cent to 12.7 per cent since 2016, thought to be due to a dropping out of “accidental” landlords (those letting their own homes out of necessity for short periods) and amateur landlords.

Lenders now perceive the market to be occupied by a reduced number of landlords; the more business savvy and experienced small-scale landlord who is aware of the risks involved and works to a professional standard. These landlords are risk averse, keeping loan to value rations at manageable levels.

Kent Reliance is one mortgage lender that says it has simplified the way it calculates affordability ratios, making the application process easier for landlords and Nat West has said it is increasing the number of buy-to-let properties that landlords are allowed to own, from 4 to 10. This will also include properties on a landlord’s books having mortgages with other lenders, and increasing the maximum value of total loans for a portfolio from £2 million to £3.5 million.

Lenders in any event will have to carefully assess those landlords with 4 or more properties in their portfolios, and will likely only grant mortgages if they are convinced that the landlord is successful and taking low manageable risks. Each property will be assessed on income yield in its own right, so just one underperforming property could stymie an application. The new MEES regulations could also present a problem after April if any property fails to meet the minimum “E” energy efficiency rating.

Sarah Taylor of Nat West Intermediary Solutions, the bank’s mortgage arm for brokers, has told The Times Newspaper:

“This important step will simplify our buy-to-let policies and means we can help a wider customer range.”

Aaron Strutt of Trinity Financial, a broker, also speaking to The Times Newspaper, said:

“There is a huge amount of competition in the buy-to-let market and lenders want to tempt landlords. There are not as many borrowers looking to buy investment properties at the moment, and this is unlikely to change until they get used to the regulatory and tax changes.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Mortgage lenders relaxing their criteria | LandlordZONE.

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First BTL lenders want proof of MEES min E rating

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OneSavings Bank, trading under Kent Reliance and InterBay for Buy to Let, is one of the first lenders to include in its criteria compliance under Minimum Energy Efficiency Standards (MEES) rules.

All new Buy to Let mortgage applications must prove the property which security is being taken over has a minimum efficiency rating of E or an offer condition will be added to make it conditional on the property being brought up to an E rating or better within 3 months.

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Welsh Housing Minister Welcomes NLA Report into PRS

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Renting in Wales:

​The Renting Homes (Wales) Act 2016, when fully implemented, will mean substantial changes for Welsh landlords. This will include using a “standard Contract” made up of fundamental, supplementary and additional terms, including provisions on retaliatory eviction, abandonment, and most notably new requirements on “fit for human habitation”.

This major overhaul will require Welsh landlords to spend time and money understanding the new system of contracts, on top of the tax changes facing landlords in the rest of the UK, and as well as meeting all the other new regulatory requirements.

This torrent of new legislation hitting landlords in Wales, especially after the introduction of Rent Smart Wales, the controvertible landlord registration scheme. It is feared by some that it could be enough to see landlord investment in Wales dry up completely, and for the first time in years, see the rental sector start to shrink.

So a new NLA report, which focuses on ways to bring about positive change in the Welsh PRS, is to be welcomed by landlords. Entitled: “Improving the Private Rented Sector in Wales; making it happen for landlords and tenants”, the report makes 7 key recommendations.

The Welsh Housing Minister, Rebecca Evans has welcomed the report produced by the National Landlords’ Association (NLA) on Private Rented Sector (PRS) housing in Wales which calls on the government to provide more support for landlords.

On his launching of the report in the Welsh Assembly, NLA Chairman Adrian Jeakings, welcomed the support the NLA has been given by partners Citizens Advice Cymru and the housing minister Rebecca Evans in making the publication possible.

Based on evidence gathered at round-table events with the main stakeholders and members of the National Assembly of Wales held last year, the report makes seven key policy recommendations:

1. Ask the UK Government, during the negotiation of the UK’s withdrawal from the European Union, to consider which powers can be devolved to Wales to ensure it has effective control over housing policy.
2. Call on the UK Government to allow Universal Credit payments to be paid directly to the landlord, as they can be in Scotland, if this is the choice of the tenant.
3. Take, alongside enforcing bodies, a more robust approach when enforcing legislation to root out non-compliant landlords.
4. Set up a ministerial advisory group to ensure there is a meaningful and continual dialogue with sector stakeholders on policy developments affecting the PRS.
5. Commit to undertaking an annual survey on the condition of housing in Wales.
6. Explore ways to support landlords in meeting and surpassing energy efficiency obligations.
7. Use Rent Smart Wales as a vehicle to produce and disseminate comprehensive and digestible information on the rights and responsibilities of tenants to help increase their confidence in disputes with landlords.

Download the report here

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Welsh Housing Minister Welcomes NLA Report into PRS | LandlordZONE.

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Litigant in person online court portal

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After a smooth successful pilot project, the LIP (litigant in person) portal is set to go to public beta mode as soon as next Monday 26th March This will mean that the service will be available to all litigants in person to use.

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