Be a guest of Mark Smith (Barrister-At-Law) – Swindon

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Our Hon. Legal Counsel, Mark Smith, Head of Chambers at Cotswold Barristers will be presenting an overview of several landlords tax strategies at the pin Swindon Meeting property networking event Wednesday 24th April 2019.

The event will start at 6:00pm until 9:00pm and will be free for guests of Mark Smith that have not previously attended a pin meeting.

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Section 21 to be banned in the UK

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The Government has announced its intention to scrap
Section 21 notices for eviction in an effort to offer tenants more long-term
security.

At the moment, Section 21 notices enable landlords to
evict tenants without a reason at the end of their fixed-term tenancy. However,
under the government’s new plans, landlords would be required to provide
‘concrete, evidenced reason already specified in law’ in order to bring
tenancies to an end. In order to support this, the government also announced
plans to make reforms for Section 8, with a consultation launching shortly.

I can’t say I’m surprised by this move, as the
government has come under increasing pressure to make this move for some
time.  However, I will be surprised, and
somewhat concerned, if they do completely abolish Section 21 rather than
diluting it, which I had presumed they would do.

Either way, this is going to be game-changing for the
PRS. By removing the ability to evict with Section, I predict:-

• Any prospective landlords will think twice about embarking on
  the world of buy-to-let, therefore limiting future supply growth, certainly in
  the short-term
• Some existing landlords, particularly those accidental landlords
  who may have previously been victim to difficult tenants, will exit the market,
  thus compounding the housing shortage crisis
• We may see a surge in landlords serving section 21’s in the near
  future if they are not confident about their current tenants.

As I have said for many years,
the vast majority of landlords only evict tenants as a last resort. No landlord
wants to go through the hassle or expense of having to evict a tenant, but
sometimes needs must, which is why the term ‘no-fault’ is moot and infuriates
me.

By the government’s own admission, 90% of tenancies
are ended by the tenant. Of those the tenancies ended by the
landlord, we know that the majority are ended because of rent arrears, as
in 56% of cases surveyed by Landlord Action.

The reason many landlords use
Section 21 to gain possession rather than Section 8, is because it is typically
quicker.  Landlords have little faith in
the current court system and few anticipate being able to pursue rent arrears
without a lengthy process, so most take the decision to forfeit recovering lost
rent and just to get their property back as soon as possible so they can
re-let.  Section 8 also comes with the
added risk that tenants can counter-claim, therefore delaying the process
further.

The government has said Court
processes will be expedited so landlords are able to swiftly and smoothly
regain their property in the rare event of tenants falling into rent arrears.
However, in truth, no-one really knows how ‘rare’ rent arrears cases are
because most landlords are writing them off via use of Section 21.

In my view, if Section 8 is going
to have to be relied on more heavily, it must be “fit for purpose� and any changes
and their application need to be carefully considered.  Clearly, if a landlord is going to need strong
grounds for possession, there are going to be a lot more court hearings. So, my
question is ‘are there going to be a lot more judges to handle this increased
workload?’.  On a positive note, it will
give much greater accuracy as to why tenants are evicted and may help pave the
way for future reforms to support both landlords and tenants.

I do fully understand the argument that unscrupulous landlords
should not be able to kick good tenants out without reason and that families to
have greater security and be able to put down roots.  However, I also feel strongly that the proposal
needs careful considered before removing the use of Section 21 altogether.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Section 21 to be banned in the UK | LandlordZONE.

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How Labour would fix the “housing crisis�

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Housing Policy:

Labour’s housing minister, South Yorkshire MP John Healey
says “We can fix this�, and as housing minister for the last year under Gordon
Browns’ government, he says he’s keen to pick up where he left off.

In an interview with James Millar for PolitcisHome, THEHouse magazine for Parliament, Mr Healey says he’d
start his next tenure with a new definition of affordable housing.

A rare ‘animal’ in Jeremy Corbyn’s shadow cabinet, Mr Healey’s
been in government and actually held some responsibility, and his ambition is
to become the next secretary of state for housing under a Labour government.

He claims that as prime minister, Jeremy Corby would be very well placed to take action on voter concerns about housing issues, because it’s close to his heart and he’s been “banging on about it for longer than most.�

Of his leader in charge, Mr Healey says:

“If you look at Jeremy Corbyn’s speeches from the very
moment he was elected to the House of Commons, housing has for nearly 40 years been
his top domestic priority.

“He’s made this commitment that he would create as prime
minister a fully-fledged housing department. That’s why I’m not shadow housing
minister; I’m shadow secretary of state for housing.

“Another good indication is our plan for ending rough
sleeping that we’ve said we’d do in five years – the course of a parliament. At
the moment there is a rough sleeping working group within government which is
chaired by the most junior minister in the MHCLG. The task force we’d set up
would be led by the PM, Jeremy Corbyn.�

“The rise in homelessness is the most visible manifestation
of the housing crisis,� says Mr Healey, claiming that the Blair governments all
but wiped out the problem 20 years ago. Mr Healey claims he now knows the
answers, given his past experience and his full support from the top:

“The root causes lie in a failure to build enough low-cost
homes, a failure to step in to give better rights for private renters – the
biggest single cause of homelessness now is the end of, or eviction from, a private
tenancy…â€�

He doesn’t explain how he would square this with private
landlords who are stuck with non-paying tenants, running up massive rent arrears?

The Labour party, says Mr Healey, has a range of bold and
radical policies to be introduced in Westminster. There’s the pledge to build a
million more low-cost homes, and a “new definition of what affordable will be�.

“Affordable�, he explains, under Labour, will be linked to
income not the market. Mortgage costs, he proposes, will be linked to around one-third
of average local incomes, varying from location to location, with the “discount�
locked in for future buyers. This discount “is there for future first-time
buyers not just first first-time buyers.�

The party also intends to “cap private rents in line with
average local incomesâ€�,  and it is
proposing indefinite leases that would appear to “tilt the balance in the
private rental market away from landlords and in favour of those in need of a
home.�

“For private renters it’s hard to think of any market that is failing so systematically where you’ve got so many people paying such a big part of their income for what is often unsatisfactory and substandard accommodation. There’s no reason why in England we can’t have a rental market that works well for landlords and works well for renters as well,� says Mr Healey.

He thinks it’s those renters that fuelled Labour’s 2017 election result, giving the opposition a healthy lead in the polls on the issue, and sees housing as a major battleground topic if there’s an election in 2019.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How Labour would fix the “housing crisisâ€� | LandlordZONE.

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Partnership Taxation: who can be a partner?

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There are few restrictions on who can be a partner. Both natural and artificial persons, such as companies, can be partners. It is not a requirement of partnership that each member is physically capable of performing the full range of the activities of the partnership business

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Abolishing S21 without S8 fully ‘fit for purpose’ will have dire consequences

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Abolishing Section 21 without making Section 8 fully “fit for purpose� will have dire consequences on our housing supply.

Yesterday (15th April 2019), the government has outlined plans to consult on new legislation to abolish Section 21 in a bid to end so called ‘no-fault’ evictions.

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In the wake of Panorama

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Following the Panorama BBC TV Programme of 18th March 2019 the situation is that 60% of the tenants of Grice Close have now moved out. Who needs a Section 21 if you have Panorama! It does the job for you!

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Government announces sweeping reforms for PRS…

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Private Landlords:

The Government yesterday published its full response to a
recent private rented sector consultation for England titled: “Overcoming the
barriers to longer tenancies in the Private Rented Sector�.

This report says it sets out the Government’s commitment to
modernising the PRS and to introduce a “new, fairer deal for tenants and
landlords.� The Government says it will:

• End
  ‘no-fault’ evictions by repealing section 21 of the Housing Act
  1988 so that a tenant cannot be evicted from their home without a good reason.
• Strengthen
  the Section 8 possession process, so property owners can regain their
  home should they wish to sell it or move into it.
• Reform
  the court process for housing cases, so that landlords are able to
  swiftly and smoothly regain their property where they have a legitimate reason.

For tenants, the government says, it will improve security,
so they can put down roots and plan for the future with confidence. For
landlords it plans to provide a “robust legal framework, with straightforward
and swift possession processes.�

The Government also claims that the combination of these
reforms will deliver a more stable sector in which to invest, but removing
no-fault evictions is likely to pose a significant challenge for private landlords.

A consultation is
now to follow on how a better system can be brought about that will “work for
both landlords and tenants.�

James Brokenshire MP, Secretary of State for Housing,
Communities and Local Government

“The private rented
sector has changed dramatically over the last 30 years.

The proportion of
households has doubled. Half of them are families with children, and older
people, looking for a long-term home.

And yet one striking
characteristic persists. The majority of tenants are on short term contracts –
unsure if they can afford the next rent rise, or whether they might be asked to
leave if they make a complaint.

This instability and
lack of power is bad enough, but an unfortunate few also bear the cost of
unplanned and unwanted moves.

What’s more, many
landlords would also benefit from longer agreements – free from the fees and
hassle of unnecessary renewals. A minority already see this. And the measures announced
in the Housing White Paper mean most tenants in the build to rent sector are now
being offered a minimum of three years.

The answer lies in
good design. Models of the past have failed where they have regulated rents,
which history tells us doesn’t work, or restricted a landlord’s right to
repossess their property, risking a loss of vital supply.

That’s why I am
seeking views on a new model – one that balances tenants’ need for protection,
with landlords’ needs to regain their property when their circumstances change.

A model that gives
tenants certainty over rents, and retains the flexibility that many desire.

I think this is a
model that could work across the market, but I am keen to hear your views.

Together we can
achieve a market that delivers the protection and security that all tenants deserve.�

Response to the consultation: “Overcoming the barriers to longer tenancies in the Private Rented Sector� available here

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government announces sweeping reforms for PRS… | LandlordZONE.

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UK house price growth will be ‘subdued’ due to Brexit uncertainty

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House Prices:

As a result of the continuing uncertainty that
pervades Brexit, the UK’s biggest mortgage lender, Halifax, has stated that
house prices across the country will continue to be ‘subdued’. The area noted
to be most affected, was London.

House
prices falling

Halifax also revealed that the average house
price had fallen by 1.6% in March, in comparison to the previous month.
Nevertheless, prices haven’t fallen dramatically, as prices still remained 2.6%
higher in the first three months of 2019 compared to the previous year.

The mortgage lender stated that it was
unlikely that house prices were to fall sharply, as there has been a lack of
activity on both the buyers and sellers side. However, it is anticipated that
prices will remain subdued as a result of the uncertainty regarding Brexit, for
at least the next coming months and with a 6-month extension recently granted.

Tomer Aboody, director of property lender MT Finance, also reiterated that the price growth was going to continue to slow down, stating: “For the past couple of years March was flagged up as the date when we would get Brexit [but] people have been too busy watching the political shenanigans on television to go out and view houses.

“The Brexit saga is such a debacle and until it gets sorted, one
way or another, few people are going to do anything.”

Uncertainty for tenants and
landlords

The media has also focused this week on the uncertainty surrounding EU
residents who are renting or looking to rent in the UK. The Right to Rent
Scheme assures that landlords only rent to legal immigrants or face fines of up
to £5,000, meaning that EU residents must re-confirm their residential status
provided that Britain leave the EU.

The Settled Status Scheme is designed to assist with this, but the rules surrounding the requirements of current EU citizens living in the UK has been very vague, and many are asking for clearer guidelines.

One area of concern is that landlords will be more hesitant towards
renting out their properties to EU tenants – and this poses challenges for EU
nationals who might feel excluded or wedged out. There is talk about the
government launching a marketing campaign which excludes how EU nationals can
legally continue living in the UK and how to go through the legal process,
without impacting their day-to-day lives.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – UK house price growth will be ‘subdued’ due to Brexit uncertainty | LandlordZONE.

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Tenant Fees Act 2019 – Draconian legislation

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I am a solicitor and a consultant with DMH Stallard LLP and have been a PRS landlord for 30 years.

The Tenant Fees Act 2019 which comes into force on 1st June 2019 applies to fees paid in connection with lettings of residential property by Private Rented Sector (PRS) landlords.

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Theresa May announces she will ban section 21

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Prime Minister, Theresa May, has announced she plans to ban the use of Section 21 or what is termed as so-called ‘no-fault evictions’ in England.

The PM said: “Everyone in the private sector has the right to feel secure in their home

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