£25 million from government to help vulnerable rough sleepers

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Thousands of vulnerable people sleeping rough will get specialist support to recover from life on the streets, thanks to a £25 million funding boost announced today (3 May 2019) by Communities Secretary Rt Hon James Brokenshire MP.

The money

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Rapid eviction of tenants from a residential property

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Wed, Jun 19, 2019 12:30 PM – 1:30 PM BST

This webinar is for landlords, legal professionals and property agents and will run through the eviction process for residential tenants.

Please Click Here to register for the Sheriffs Officer webinar.

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Why the Impact of the Tenant Fee Ban is Actually Positive for Landlords

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Jonathan Werth, Managing
Director at LiFE Residential, London based estate agency

We are just about a month
away from the infamous Tenant Fee Ban, set in the Tenant Fees Act, which is
coming into effect 1^st June 2019. There has been plenty of talk of
how the new law will benefit renters across the country and ‘punish’ estate
agents, but its impact on those in the middle – the landlords – is not
discussed as widely. For those of you who may not fully understand the
implications of the Tenant Fee Ban, let me say it will be only as irritating as
your our monthly WiFi bill increase, bringing long-term benefits to both
property investors, and the entire property sector.

The Tenant Fees Act prohibits
landlords and agents to force any charges onto a tenant, other than the rent
and deposit. The agents cannot charge any admin and agency fees, which include
costs for tenant referencing and inventories a tenant is usually charged with.
The new law also reduces the amount of deposit the agents can hold, from six
weeks to a maximum of five weeks rent.

Historically, estate agents have
been able to increase their revenue by charging both tenants and landlords for
specific fees. By charging tenants the admin and agency fees, estate agents
were able to offer landlords a lower fee and still maintain good level of
service and grow their business.

But times have changed, and the
UK Government now wants landlords to be accountable and pay all the fees necessary,
which means that estate agents are having to increase their letting and
management fees. The first time in 19 years of operating in a highly
competitive London market, we here at LiFE have just informed all of our
landlords with lower fees about the changes that come with the Tenant Fee Ban,
and what fees they can expect to increase from the 1^st of June. I am
confident, if not yet, that soon other agents will follow with the same
announcements. 

Naturally, some of our landlords
questioned why they must accept the increase, as they didn’t realise that some
of the estate agents’ revenue comes from charging the tenant fees. We, as
estate agents, are guilty of not properly explaining this to landlords.

The percentage of fee increase
landlords can expect to pay will vary with every estate agency and also be
influenced by the original amount of fees the landlord is currently paying. For
example, let’s say a landlord charges £1,500 a month for his rent, with a fee
increase of 1%, they will only have to pay an extra £15 a month. When you
divide the fee increase per week, the amount is minimal. Some people, however,
may expect to see bigger increases due to the historically low fees they are
on.

To combat the fee increase, landlords are having to increase
their monthly rents, which we are already seeing. In most places, such as
London, where demand overrules supply, the market will allow for the rents to
increase as a way of paying for the extra fees charged to the landlord.

The Tenant Fee Ban will, without
a doubt, make tenants happier and they will enjoy the renting experience more,
because when they must move, they’ll only have to pay their rent and deposit,
with no extra fees. During their tenancy, tenants will then be more positive
towards the landlord and estate agent and will be more inclined to renew their
tenancy with annual rent increases.

The most important implication to
the landlord and the entire industry, to my opinion, is that the loss of
revenue from tenant fees will clean up the industry from rogue and incompetent
agents. It will simply make it harder for anyone to start up an estate agency
without any knowledge, experience of qualifications.

Faced with all this pressure,
amateur agents and landlords are already leaving the industry, whilst professional
landlords have more room to grow and receive a better service from their
agents. Ultimately the new law is setting higher standards across the board for
both landlords and agents.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Why the Impact of the Tenant Fee Ban is Actually Positive for Landlords | LandlordZONE.

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Chester landlords fined for letting windowless flat with no heating

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Rogue landlords:

Two Chester landlords have been brought to book and fined
for letting a “death-trap� flat which had no windows or heating.

Sandeep Jarjapu and Nattha Gohill were fined a total of £5,286
following a successful prosecution by Cheshire West and Chester Council at
Chester Magistrates Court.

When the Council inspected the dwelling, which is above a
shop in Brook Street, Chester, it was found to have serious safety issues. This
was back in December 2017, which led to a Prohibition Order being made, banning
the landlords from renting it out. However, subsequent to this, another inspection
in June 2018 showed the property to be still occupied.

Jarjapu, 31, of Belgrave Street, Chester, and Gohill, of
Seller Street, Chester, had pleaded guilty and were both prosecuted for failing
to comply with the Prohibition Order in their absence.

Maria Byrne, Director of Place Operations Cheshire West and
Chester Council told The Chester Standard:

“As a council we are very keen to ensure that tenants living
in the private rented sector are housed in properties that are safe and free
from hazards.

 â€œWe will not tolerate
landlords who choose to house their tenants in property that is not fit for
human habitation.�

“I would urge any tenant living in a property which has
serious hazards to report these to the Council`s Housing Standards Team on 0300
123 7038; the team will liaise with the landlord and take whatever action is
necessary to remedy the situation.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Chester landlords fined for letting windowless flat with no heating | LandlordZONE.

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Housebuilders agree to government leasehold pledge

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Long-leasehold:

The increasing trend to sell new houses on long-leasehold, as opposed to with a freehold title, has led to some alarming stories recently.

It seems that almost half the people (often first-time buyer
couples) who bought a leasehold house in the past ten years had no idea what
they were getting into, according to a new study by the The National
Association of Estate Agents.

In some cases homebuyers face extortionately high fees and charges with almost no limit to how high they could go over time. Leasehold owners are often charged expensive ground rents, growing over time under a formula set-out in the lease, as well as fees if they want to make changes to their homes. New owners feel they have been deceived and mis-sold their properties, with some now unable to sell.

A leasehold contract is a complicated area of the law and
unless the buyer was warned by their own solicitor before it was too late, they
could find themselves in deep trouble. The study found that around 94% of house
buyers regretted buying a leasehold while 62% felt they were mis-sold.

However, following some high profile cases coming to light, the government took action, this year putting pressure on housebuilders and now developers who are promising to keep ground rents under control.

Although the Government had said it might ban the sale of new-build houses on a leasehold basis – and it still has not ruled this out – and cap ground rents at peppercorn rates, in fact no legislation has been brought forward. It has simply asked for a voluntary pledge, relying on public pressure on the housebuilders to act in a fair way towards home owners.

The pledge was devised by Government which obliges builders
to commit to doing away with onerous ground-rent clauses in leasehold
agreements. First among the signatories were housebuilders Taylor Wimpey and
Barratt Homes.

Most commonly leasehold ownership is used for blocks of flats owned by one freeholder. This ensures orderly and centralised upkeep management of communal areas and the outside stucture, financed though service charges, paid by each leaseholder. Ground rent is part of the contractual lease agreement between the leaseholder and freeholder extending over the life of the lease and varies from zero to a substantial sum each year.

The lease has a finite life in terms of years, obliging the
lessee to renew at some point before the lease value diminishes too far to
allow a mortgage to be obtained on a sale.

Builders had found that by selling new houses on leasehold, previously an unusual practice when there’s no communal upkeep required, they could raise extra income. Lease clauses often mean the doubling of ground-rent every few years, and steep charges for any changes or alterations, such as new windows or extensions.

Often, when a leaseholder enquires about buying the
freehold, they find it’s been sold on to a professional investor, and marked up
in price. It all makes for problems and sometimes major issues if the
leaseholder comes to want to sell his or her home.

Among other things, builders will now have to agree to identify existing leases where ground rent doubles more frequently than once every 20 years, and offer to change the arrangement to one linked to the retail price index (RPI) when it is requested.

The changes mean that for ground rent investors and ground rent funds, in some cases they may have to accept lower returns in the future.

Public pledge for leaseholders

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Housebuilders agree to government leasehold pledge | LandlordZONE.

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Landlords victory

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After a long dialogue representatives of Sefton council finally met the landlords Alliance. First let me state that the Sefton team were Welcoming, helpful and constructive. It was not a case of us fighting zealots on the contrary, the Council team were proactive and motivated to resolving the problem.

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IEA paper – Tax measures that discriminate against private rented housing

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Professor Philip Booth of the Institute of Economic Affairs and our own member Dr Rosalind Beck have written a paper titled “Taxation Without Justification” An economic analysis of the Treasury’s treatment of privately rented housing. You can click here to download the full document.

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Section 20 Refund?

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The management company at one of our properties in a block raised funds via section 20 process for a new roof. They have now decided to carry out repairs and defer the new roof for hopefully 5 or more years.

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Landlord Questionnaire on Section 21

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We want to hear from the landlords, click here to take our short survey!

News broke last week of the government’s intention to abolish Section 21, for ‘Non-Fault’,  this would mean under the government’s new plans, landlords would be required to provide ‘concrete, evidenced reason already specified in law’ to bring tenancies to an end, under grounds used in a Section 8 Notice.  Previously in our last survey on Section 21’s . 56% of landlords are using Section 21’s because their tenants are in arrears, because its easier and quicker and most write off the rent. Only 0.5% of landlords served Section 21’s because the tenants had asked for repairs to be carried out, this is called ‘Retaliation Eviction’.

We do fully understand the argument that unscrupulous landlords should not be able to evict good tenants,  without reason and that families to have greater security. But the term, ‘Non-Fault’, is an incorrect phrase, as there is always a reason why a landlord evicts a tenant, mainly rent arrears, or they need to sale or move back into the property.   We want to hear your views, please complete this short survey and give us your views on the latest announcement, there will be a formal consultation by the Government in the future, but in the meantime,  What will the impact be for you?

Click here to take the survey!

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord Questionnaire on Section 21 | LandlordZONE.

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‘Taxing times – Decoding property tax in 2019’

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Property tax can be a complicated business. In Hamilton
Fraser’s latest property podcast Hamilton Fraser CEO, Eddie Hooker and Paul
Shamplina, Founder of Landlord Action and Brand Ambassador at Hamilton Fraser
are joined by special guest and tax expert Tony Gimple, Founding Director of Less Tax 4
Landlords. 

Tony, Eddie and Paul aim to decode
property tax in 2019 discussing everything from the importance of
business planning to the types of taxes landlords pay, the best status for a
portfolio landlord, landlord expenses and HMRC guidelines.

Listen
to the latest podcast here.



Hamilton Fraser Total
Landlord Insurance have also released a new tax guide to provide
additional supporting information for landlords on the subject. Remember, it is
important to always seek the advice of a tax professional, such as Tony, before
making any changes to the way you manage your finances.

If you have missed the previous
podcasts in the Hamilton Fraser series you can catch up with previous episodes here!

Previous guests include:

• Jeremy Leaf, Principal of Jeremy Leaf & Co Chartered Surveyors and Estate Agents
• Arden Hanley, Property Educator and HMO
  landlord
• Sean Hooker, Head of the Property Redress Scheme
• Kate Mutter-Bowen, Head of Tenancy Deposit Protection at mydeposits

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Taxing times – Decoding property tax in 2019’ | LandlordZONE.

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