“Incoherentâ€�, the Government’s approach to rental market says expert

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Renting Policy:

Perhaps not surprising with all that’s going on in Government that they’re eye is being taken off the ball with the rental market, but as it’s a crucial housing and election issue there’s really no excuse.

According to a former member of the Bank of England’s
Monetary Policy Committee, David Miles, the Government’s approach to the
private rented sector is “incoherent�

Mr Miles, now a Professor of Financial Economics at Imperial
College London, is arguing that “contrary to the Government’s stated aims,
there are ‘few signs’ that tax increases on the sector have benefited those
hoping to become homeowners. He argues that they are, meanwhile, left in a
rental sector with reduced choice and where rents are likely to be higher as
supply gradually shrinks.�

Since 2015 the Government has introduced measures to
restrict mortgage interest relief on the private rented sector to the basic
rate of income tax and imposed a stamp duty levy on the purchase of new homes
to rent out, says the Residential Landlords Association (RLA) in a press release.

In an exclusive article for the Residential Landlords
Association Professor Miles attacks the Government’s approach, which has sought
to cut investment in the rental market to support aspiring first-time buyers.
He argues that such buyers “are hardly helped by squeezing the supply of rental
property and driving rents up.�

He goes on to say that there is nothing “intrinsically wrong
with people being in the rented sector for an extended phase of their life. We
should want to avoid a situation where people feel pressurised into taking big
mortgages relative to their income early in life because the rental option is
so poor.�

Professor Miles goes on to conclude:

“In a world where house prices might be consistently higher
relative to incomes than in the past we might naturally expect the period in
which people are in the rented sector is longer. And there are good economic
reasons for believing that in a country with a rising population and where real
incomes tend to increase over time house prices might well rise at least as
fast as incomes. To have then introduced measures that reduce the supply of
rented property is perverse.�

David Smith, Policy Director for the Residential Landlords
Association, said:

“Professor Miles hits the nail on the head. Choking off the
supply of rental properties does nothing to help aspiring home first-time
buyers who need somewhere to live now.

“It is time to change tack and recognise that we need more
homes to rent as well as to buy in order to meet growing demand and have policies
that support investment.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – “Incoherentâ€�, the Government’s approach to rental market says expert | LandlordZONE.

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Bank of England economists base theory on Generation Rent claptrap

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They helpfully link to articles quoting industry experts who predicted that higher property taxes would lead to higher rents in their article:

“Higher property taxes needn’t mean higher rents…

Some argue that taxing rental income or buy-to-let transactions will lead some landlords to sell up, 

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Landlords now charging rents for pets…

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Lets for Pets:

The introduction of the tenant fees ban has also introduced uncertainties for landlords and tenants around the issue of letting with pets.                                                                                 

Letting to families or individuals with pets has always been
a controversial issue for both landlords and tenants. Some landlords would prefer
not to let to tenants with pets full-stop, but an outright ban on pets is
illegal.

However, a landlord has the right to refuse pets when they
would be deemed unsuitable for the accommodation or the lifestyle of the
tenants. For instance, a dog being left unattended in a flat for long periods
may interfere unreasonably with neighbours’ lives.

Depending on the pet, wear and tear may be increased
considerably, and it’s difficult to assess in advance if this will be the case.
A cat can cause scratching to furniture and horrendous smells when urinating on
carpets, which would necessitate full replacements. Replacement costs can be
considerable and something which can become a big issue between landlord and
tenant.

For these reasons, landlords have traditionally accepted
increased deposits to cover for increased risks and they have separate pet agreements
which contractually bind the owners, not only to pay for any additional damage
caused and cleaning costs, but also to ensure that animals are properly looked
after, including proper exercise, all injections, worming, de-fleaing etc.

The fees ban puts a cap on deposits which prevents landlords
taking an additional amount for pets, and also bans cleaning fees, which leaves
the only legal option of charging an additional amount of rent – in effect a “pet
rentâ€� – for the increased risk.

The Guardian
newspaper has identified what it says is an attempt to “recoup losses from a
ban on unfair letting fees,� by landlords charging excessive “pet rents� of hundreds
of pounds a year for the thousands of tenants who own a cat or a dog.

The Guardian says
the “new practice means tenants with animals are being charged up to £50 a
month additional rent for a single pet, adding considerably to the cost of
housing at a time when more and more families are priced out of buying and rely
on rented homes.�

The newspaper cites one landlord from Bicester in Oxfordshire asking £40 per pet per month on top of the £995 pcm rent, meaning that (in theory) a family with a dog and two cats would face paying and additional £1,400 per annum. Several other landlords are said to be seeking “pet rent� for “clawed� pets only.

One tenant is cited by The Guardian as saying it is ridiculous for landlords / agents to ask for pet references, when in fact the DogsTrust recommends this practice – see http://www.letswithpets.org.uk/find-a-pet-friendly-property/top-ten-tips

Letting agents are saying that the “pet rent� issue is one
that has emerged since June when the fees ban came in and one which it seems is
likely to be a cause of contention between landlords and tenants in the future.
One of the unintended consequences of introducing new legislation perhaps, and
an issue which may need to be addressed in the legislation?

David Cox, chief executive of ARLA Propertymark, has
commented that the practice of charging pet rents is the only legal way for
landlords to cover the potential cost of damage by pets.

“This practice is a direct result of capping deposits under
the tenant fees ban, as this problem didn’t exist before June 1.

“There’s been a long-standing campaign from the Dogs Trust,
called Lets with Pets, which encouraged landlords and letting agents to take a
couple of weeks extra deposit to cover the cost of a pet.

“But this practice is now unlawful under the ban and
landlords are charging additional rent as it’s the only lawful avenue to
mitigate the risk of damage from pets.�

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords now charging rents for pets… | LandlordZONE.

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Are you managing your rented property within the law? – Landlord Law

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Are you managing your rented property within the law? Many landlords think they are – only to find to their cost later that they are not.

There are four traps that landlords’ tend to fall into:

1.

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£3.6 billion Towns Fund

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The 100 places invited to develop proposals for a new generation of multi-million-pound Town Deals have been announced by Local Government Secretary Robert Jenrick.

The towns eligible for support from the £3.6 billion Towns Fund include places with proud industrial and economic heritage

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Victory for RLA as Hounslow Council u-turns on licensing

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Hounslow Council has u-turned on plans to bring in a licensing scheme for landlords following representations by the RLA and Safeagent. Plans for an additional licensing scheme for landlords were passed by the local authority’s cabinet in July. In response to this the RLA threatened the council with judicial review on the basis that the […]

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Fusion appointed as exclusive tax partner to LandlordZONE

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Fusion Consulting, a
leading tax advisory firm in London and winner of the “Best New Practice� in
the Tolley’s taxation awards 2019 have been selected by Landlord Zone, the
leading authority on Landlord and Property matters to be its exclusive tax
partner and to offer its portfolio of taxation and legacy planning services to
its client base.

Paul Shamplina,
Brand Director of LandlordZONE said, “We selected Fusion as our tax partner
because of its track record working for landlords in helping them reduce tax
and ensure they remain compliant in the ever-changing tax landscape.�

He also added
“Landlords are under immense scrutiny and understanding tax is not easy, so educating landlords
on this site is very important, as well as offering a professional service for
their Tax needs with Fusion Consulting makes sense’..

Mitch Young,
Director of Fusion Consulting said “We are delighted to partner with Landlord
Zone to provide tax advisory and compliance services to its client base.
Landlord Zone are regarded as the go-to resource for landlords and we are very
much looking forward to working with them to help their clients become fully
compliant and get the advice they need to make informed decisions about their
portfolios�

For more information, please contact Fusion Consulting PR department on +44 203 841 7010 or info@fusionconsult.co.uk

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Fusion appointed as exclusive tax partner to LandlordZONE | LandlordZONE.

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Tax survey for landlords

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The Office of Tax Simplification (OTS) is asking for landlords’ opinions on tax reporting and payment arrangements. The OTS is an independent adviser to government suggesting changes that will make the tax system easier to navigate and reduce red tape. The survey is running until September 20. To share your opinion on the current system […]

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Nottingham Luxury

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PIP is delighted to present our investors with this amazing opportunity to invest just outside the centre of Nottingham. This off-plan investment opportunity is ideally positioned close to the city centre of Nottingham and is made up of luxury one-bed apartments.

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Batten Down The Hatches

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Until the Storm of Chaos at Westminster is over I shall be battening down the hatches and selling no further properties.

If you are a Buy to Let Investor purchasing off plan you should seriously consider whether you sign a contract in this present climate.

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