Blog: Queen’s speech confirms end of Section 21

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Today’s Queens Speech confirmed measures to end Section 21 repossessions and strengthen Section 8. In this blog first published on Anthony Gold, RLA policy director David Smith writes about they key announcements relating to the private rented sector. As had been widely trailed the Queen’s Speech included reference to a bill to abolish section 21 […]

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Bank Base Rate unchanged at 0.75%

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The Bank of England’s Monetary Policy Committee today voted 7 – 2 to keep the Bank Base Rate the same at 0.75%.

Decisions are now coming thick and fast, but the inflation projections  of slightly above the 2% medium term target were based on the assumption of an orderly transition to a deep free trade agreement between the UK and the EU.

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Queen’s Speech: Section 21 WILL go

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Landlords have warned of a rental crisis that could lead to a mass sell-off of homes following the announcement Section 21 WILL go in today’s Queen’s Speech. The government plans to introduce a Renters’ Reform Bill, which it says will: “Introduce a package of reforms to deliver a fairer and more effective rental market.” The main […]

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Queen’s speech – Section 21 ban?

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The first Queen’s speech under a new Tory majority outlining the government’s intentions for new legislation in this Parliament has been given.

For landlords the most relevant statement, all be it very short was: “New measures will be introduced to protect tenants.”

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December licensing update for landlords

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In our licensing update this month, we take a look at some of the proposed licensing schemes that are up for consultation across the country, and other licensing related news affecting landlords. News HMO landlords: Article 4 Direction to be introduced in Birmingham next summer Earlier this year, we reported on an Article 4 consultation that was being run by Birmingham City […]

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Homelet Rental Index shows 3.2% average UK rent rise in 12 months

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Rent Increases:

The latest HomeLet
Rental Index shows that the average rent across the UK for a new
tenancy in November 2019 was £947 per calendar month (pcm), which is
an increase of 3.2% on the same month last year.

With the current
Consumer Price Index (CPI) running at 1.5% and the Retail Price Index
(RPI) at 2.2%, that gives a net increase in average rents of no more
that 1.7% net, 1% if you take the RPI. Average weekly earnings for
the economy as a whole ending October 2019 rose by 3.2%, so rent
increases are broadly in-line with average wage rises.

The main points of the report were:

• Average rents
  across the UK rose by 3.2% in November 2019 when compared to the
  same month a year previously; the average monthly rent is now £947
• Rents in London
  increased by 3.2% in November 2019 than in the same month of 2018;
  the average rent in the capital now stands at £1,648 a month.
• When London is
  excluded, the average UK rental value was £784 in November 2019,
  this is up 3.2% on last year.
• HomeLet’s
  November Rental Index reveals that rents rose from last year in all
  12 of the regions covered in the research.
• In November,
  average rental values in London (£1,648) were 74% higher than the
  UK (£947)
• When London is
  excluded the average rent in the UK was £784 in November, average
  rents in London (£1,648) were 110.2% higher than the rest of the UK

The HomeLet data
also shows that rents in the Wales are growing faster than any other
region in the UK, whilst rental growth in London has now declined by
over 1.0% for the past three months. Rental values in the North East,
North West, Scotland, Yorkshire & Humberside, Northern Ireland
and Wales all rose faster than the UK average.

Rental figures from the November 2019 HomeLet Rental Index

The
table below provides a regional breakdown of the latest average
rental values in the UK.

Rental
figures from the November 2019 HomeLet Rental Index

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Homelet Rental Index shows 3.2% average UK rent rise in 12 months | LandlordZONE.

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Landlord Investment Show – ‘Living by numbers’ panel debate: the key takeaways

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At the recent Landlord Investment Show in London, Paul
Shamplina, Founder of Landlord Action and Brand
Ambassador at Hamilton
Fraser, chaired a panel debate on the topics of tax,
finance and legal
advice for buy-to-let landlords. The panel took part in a Q&A
and shared their tips on the latest tax, legislative and financial challenges
that buy-to-let landlords face today.

The panellists included: Sean Hughes, Chartered Tax Advisor
from Comprehensive
Tax Planning; Jenny Brown, Sales Director from Mortgages
for Business; Vincent Burch, from Vincent Burch Ltd (an
independent mortgage broker); and David Hanna, specialist Tax Adviser at Cornerstone Tax.

Here, we share some of the key takeaways and provide top
tips from Paul Shamplina and the expert panellists.

Advice for new buy-to-let investors

The panel had plenty of useful advice for those who have recently
become, or are interested in becoming, buy-to-let investors.

Paul suggested that the first thing anyone who is planning
to become a landlord should consider is what type of landlord they want to be.
There are several different approaches to managing properties, and it is
important to understand what will work best for you. For example, you may
choose to be a passive landlord with little involvement with or responsibility for
your tenants, an HMO owner with multiple tenants, or a portfolio landlord with
several properties and a much larger remit of responsibility.

Vincent Burch advised that it is important to research the
property market thoroughly; this will help you to decide what type of property
you want to invest in and what sort of return on investment (ROI) you can
realistically expect to make. Similarly, Jenny Brown emphasised the importance
of research and also suggested speaking to a mortgage broker to gather information
about the mortgage market.

Tax, finance & legal advice

A member of the audience raised a question about the
potential tax benefits of moving to a limited liability company (LLC) or a
special purpose vehicle (SPV) (a company set up for the sole purpose of renting
out properties). Vincent Burch advised landlords to consider how much it will
cost them to move to a limited company, pointing out that although mortgages
are more expensive when applying as a limited company, they offer better tax
relief.

Sean Hughes suggested that the choice to move to a LLP or
SPV depends entirely on personal circumstances and that landlords should be
mindful of the tax processes and implications when transferring property to a
limited company. He advised that if a property has increased in value between
the time of purchase and the present time, the landlord will have to pay Capital Gains
Tax (CGT) on the property if they decide to move to a limited
company. However, if you own five or more properties, and spend at least 10
hours on average per week fulfilling landlord duties, you may qualify for ‘Incorporation
Relief’ which means that you won’t have to pay CGT that has accumulated
on the property if you want to transfer to a limited company.

Business planning for landlords

The panel provided some tips to help landlords with
effective business planning. Jenny Brown suggested that landlords should add a
20 per cent contingency on top of every potential cost, because landlords’
costs are often higher than anticipated.

The panel also advised landlords to take into account refurbishment
and maintenance fees, along with planning for the unexpected, for example the possibility
of a property becoming vacant, resulting in an unplanned void period. Landlord
insurance isn’t compulsory, but a comprehensive policy like Hamilton
Fraser Total Landlord Insurance’s premier policy will provide full
cover between tenancies, as well as for loss of rent or alternative
accommodation and malicious damage by tenants or guests. As a landlord, you
can’t possibly plan for every eventuality, but you can take steps to reduce
your risks.

With the growth in build-to-rent, Paul pointed out that a growing number of tenants are choosing to rent from corporate landlords. This shift amongst many tenants towards a preference for dealing with professional landlords presents serious competition for landlords. Paul emphasised that it is important for landlords to seriously consider how they manage their properties and tenants to ensure that they appear professional and reliable and to factor this into their business planning.

Section 21

The panel discussed the backlash and potential
implications of the abolition of Section 21. The 2019 general election
manifestos confirmed a cross-party consensus that Section 21 will be scrapped.
Paul highlighted that over 20,000 landlords challenged the consultation to ban
Section 21, and that the ban could cause large amounts of landlords to leave
the property market. The panel agreed that scrapping Section 21 would have to
be supported with considerable investment and reforming of the Section 8 rule
in order to maintain the balance between tenant and landlord rights.

As Paul says in his previous 2019 wrap up article for
LandlordZONE, A
‘look back’ and ‘look on’ at landlord liabilities , “Despite strong opposition from landlords and
the industry, including myself, it would seem that whichever political party
wins the election, Section 21 will be scrapped.  For me, this could have
the greatest impact on the PRS we have ever seen, especially without
substantial funding for our court system.”

Paul regularly chairs discussions and speaks at the Landlord
Investment Show and other industry events, winning the award for ‘Best
seminar speaker’ at this year’s Landlord Investment Show Awards.

The Landlord Investment Show
is attended by thousands of industry players, including landlords, investors,
letting and estate agents, property developers, and other specialists within
the private rented sector. The event is a leading landlord & property
investment exhibition, showcasing panels of industry professionals and key
speakers who discuss a wide range of topics regarding the buy-to-let sector.

The next Landlord Investment Show will take
place on 19 March 2020, at Olympia London in Kensington. If you would like to
learn more about the show and how you can attend, visit the event’s
official website.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord Investment Show – ‘Living by numbers’ panel debate: the key takeaways | LandlordZONE.

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Queen’s speech set to introduce legislation to axe Section 21

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The state opening of Parliament will take place on Thursday, and so will the Queen’s speech, which will set out the government’s agenda for the coming session, outlining proposed policies and legislation. Ahead of the speech the press has been briefed that it will include the legislation to end Section 21 repossessions. This is in […]

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Nottingham homeless in The Post again!

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Nottingham homeless in the post again. Nottingham has the highest by A LONG WAY homeless in the region. Us Landlords all know this is because of the Labour Council Selective Licensing who blame it on Tory Govt Benefit Cuts Universal Credit UC.

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Call of the Week: Keeping properties secure over Christmas break

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This week our advice team took a call from a student landlord who wanted some advice on keeping their property secure while there tenants are away over Christmas. As universities across the country finish term soon, many students will be planning to spend a few weeks at home-leaving their rental property empty for several weeks. […]

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