Edinburgh begins its much-publicised crackdown on Airbnb

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Four flats within one block are served with orders stopping them being rented out via short-lets platforms, as council’s planning chief tells LandlordZONE that licensing is not far away.

Edinburgh’s crackdown
on Airbnb rentals has started in earnest as four flats in one city tenement
block have been served enforcement notices.

It follows a report out this week
that reveals Edinburgh Old Town has the highest incidence of Airbnbs in the UK,
with 29 active listings for every 100 properties, according to data gathering
firm Inside Airbnb.

Last month, Housing
Minister Kevin Stewart announced measures to let local authorities start licensing
schemes for short-term lets from spring 2021. These aim to regulate the sector which is being blamed for
helping to create a housing crisis in the region’s cities.

Councillor
Neil Gardiner, Planning Convener, told LandlordZONE: “It’s really
encouraging to see the existing powers we have through enforcement are working.

“This
is resource intensive though and we’re continuing to work with the Scottish
Government to introduce a licensing regime which will give us far greater control
over the sector in the future.”

Stop orders

The four city-centre flats, at 68B Grassmarket, all
received their orders to stop operating as short-term lets on 28 January, but
the notices have only been public now. The council says it took the measure to
protect quality of life for other residents in the building.

The number of Airbnb guests, two per flat, and high level
of turnover, also led to the enforcement notice with planners stating the use “is
causing disturbance to the established residential character of the building”.

Renting out a home for short periods of time doesn’t normally
need planning permission however, permanent use of a property for short lets –
especially on a scale that could affect neighbours – is likely to be considered
a change of use, requiring consent.

Just Planning, a
householder planning appeals specialist, reports that other councils around the country are starting to flex
their muscles and using their planning powers to serve enforcement orders.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Edinburgh begins its much-publicised crackdown on Airbnb | LandlordZONE.

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Nigerian landlord ordered to return rent and pay fines totalling £202,000

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Lagos-based repeat offender landlord Olu Soyebo rented out three properties within a converted house for nine years despite not being give permission for the conversion.

A Nigerian landlord has been ordered to pay back the £190,000
he made in rent from illegal flats – one of the biggest financial penalties
handed out this year within the private rented sector.

Brent Council finally caught up with Olu Soyebo,
61, from Lagos, who spent almost a decade renting out three flats at a property
in Windsor Crescent, Wembley, despite having been refused planning permission
in 2009 to convert it.

Harrow Crown Court heard how Brent’s
enforcement team served a notice on him, but follow-ups found the flats had
been reinstated by Soyebo and rented out separately, this time for more than
nine years.

He was landed with the hefty confiscation
order and now has three months to pay the money back or face a jail sentence.

Judge Tregilgas-Davey criticised Soyebo for
failing to put measures in place to ensure that the council’s warning letters,
which were sent to several known addresses in London, would reach him at his
home in Nigeria.

The court also heard it wasn’t Soyebo’s first
enforcement notice; in 2001 a notice was served on him when the property was
being used as an HMO without planning permission.

Illegal rent
revealed

Judge Tregilgas-Davey told Soyebo that the
breach had continued for a “not insignificant period of time” and that
financial investigators from Brent Council were able to prove how much money
he’d made in illegal rent.

He said: “You entirely ignored the
foreseeable risk when you converted [the property] into two flats without
planning permission.”

As well as the confiscation order, he was
fined £12,000 and ordered to pay the council’s legal costs.

Councillor Shama
Tatler, cabinet member for regeneration, property and planning, says: “This puts
rogue landlords on notice that Brent Council will take very strong action if
they try to dodge the planning laws.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Nigerian landlord ordered to return rent and pay fines totalling £202,000 | LandlordZONE.

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Today in politics: short-term lets, Local Housing Allowance and agents

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We look at a Lords’ debate on short term lets and questions on the issue of getting the homeless into accommodation and urgent repairs.  Government ‘no plans’ to regulate short term lets Baroness Gardner of Parkes (Conservative) yesterday received a response to her oral question asking the Government what plans it has to discuss with local authorities […]

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Scotland’s worst landlord is jailed for two years after ignoring regulations and fines

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Repeat offender Mohammed Murtaza had been refused registration and fined 12,000 but continued to rent out multiple properties in Fife despite warnings.

A rogue landlord who previously made legal
history for being the first person to be banned from renting out homes in
Scotland has been jailed for failing to pay a £12,000 fine.

Mohammed Murtaza starts a two-year prison
sentence after receiving the fine in January 2019 for admitting illegally
renting out properties in Fife.

Two years before that he had been subject to
the first ever disqualification order granted by a Scottish court for breaching
anti-social behaviour legislation and by continuing as a landlord after his
registration was refused.

Murtaza was shocked by the sentence when he appeared
in the dock at Kirkcaldy Sheriff Court this week for a confiscation hearing, when
prosecutors aimed to seize earnings he is alleged to have made from his crimes.

Sheriff Jamie Gilchrist QC told Murtaza: “You
have made no effort to pay the fines. It must be said that the fines were set
at that level because of the repeated offending, not only on this complaint but
you have previous convictions for doing the same thing.”

A 12-month order had been made against Murtaza
in May 2017 after he had let properties in Valley Gardens, Dunnikier Road and
Kennedy Crescent, Kirkcaldy (pictured), despite being refused a listing on Fife
Council’s landlord register.

Murtaza had also been refused registration in
June 2015, after conviction for failing to comply with duties under anti-social
behaviour legislation and for breaching gas safety legislation.

The disqualification order made it a criminal
offence for him to rent out residential property in the region. However, Murtaza
went on to let out two properties in Kirkcaldy later in 2017.

When Sheriff Gilchrist fined Murtaza last year,
he said the unregistered landlord had £70,000 equity on his two properties and
was clearly able to pay a substantial penalty. He was given six months to pay
and banned from registering as a landlord for a further four years.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Scotland’s worst landlord is jailed for two years after ignoring regulations and fines | LandlordZONE.

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Multi-Sale SDLT?

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I’ve sent the recent article to my account as I have a building in 10 separate units let on ASTs as it reads as though this qualifies for the reduced SDLT – I even called the Inland Revenue who said ‘sounds as though it does’

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RLA and Appraisers UK develop HMO course for property surveyors

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Property surveyors will be able to broaden their knowledge of Houses in Multiple Occupation (HMOs) to conduct valuation surveys in such properties, in a new training course. The classroom course, developed by the Residential Landlords Association and Appraisers UK, will see delegates learn about the additional duties placed on HMO landlords when it comes to […]

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Can you split Property Portfolio in two parts to Incorporate?

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We currently have 20 properties, 10 of them in Surrey where we live and remaining 10 in Ashford Kent around 47 miles from our home.

As we understand incorporation relief is only available if we incorporate whole of portfolio.

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Beware the coming changes to Capital Gains Tax rules:

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CGT:

From 6 April this
year there are two phased in changes coming which will dramatically
affect the tax paid on residential property sales by UK residents,
individuals and trustees.

For personal
taxpayers capital gains are currently reported in the annual
self-assessment tax return and paid anywhere between 10 months and 22
months after the sale date of a property. The new rules after April
bring the reporting and payment to just 30 days, giving the
government a one-off bonus, an additional tax take of around one and
a quarter year’s revenue. This is calculated to be worth around
£5bn to £8bn.

Where CGT is due on
the disposal of UK residential property (holiday home, buy-to-let
etc) by a UK resident or trustees, a new online return will have to
be filed, together with payment on account of CGT within 30 days of
the date of completion of the sale. (Finance Act 2019 Schedule 2).

The new regime will
apply only to taxable gains accruing on disposals of UK residential
property made on or after 6 April 2020 (in the tax year 2020/21). It
will mean that where contracts are exchanged under an unconditional
contract in the tax year 2019/20 (6 April 2019 to 5 April 2020) but
completion takes place on or after 6 April 2020 the 30 days rule will
not apply. The gain should be reported in the 2019/20 self-assessment
return and paid in the usual way.

If, on the other
hand, contract exchange takes place on or after 6 April 2020, or
where the contract is conditional, and the condition is not satisfied
until after 6 April 2020, the 30 day rule will apply, an HMRC return
must be filed and payment made within the 30 days deadline.

The changes to the
CGT rules could to catch out unsuspecting owners of UK residential
properties where their sales are subject to the tax, for example
buy-to-lets and holiday homes, says accountants Kreston Reeves. Those
not aware of the changes will be exposed to interest and penalties,
says the accountants, who are business and financial advisers.

No return will be
due where the gain is not chargeable, for example, because it is
covered by Private Residence Relief – this applies to owner
occupiers as their main residence. The changes are in line with the
CGT rules which already exist for non-UK tax residents who dispose of
UK property.

The normal rates of
CGT applicable to UK residential property will apply – 18% for basic
rate taxpayers and 28% for higher and additional rate taxpayers.

Jo White, Tax
Director, Kreston Reeves says:

“Under the current
regime CGT is paid by individuals anywhere between 10 and 22 months
after the date of the disposal. From 6 April 2020, a payment on
account of any CGT due must be made within 30 days of the transaction
completing.

“Judging by the
conversations we are having, many are still unaware of the changes,
leaving them open to penalties and interest if they fail to meet
their tax reporting and payment obligations.”

Taxpayers who file
their return late may be subject to:

• Immediate late
  filing penalty of £100.
• Three months
  late – penalties of £10 per day for 90 days.
• Six months late
  – the greater of 5% of the tax due or £300.
• 12 months late
  – the greater of 5% of the tax due or £300.

HMRC could also
charge penalties and interest for underpaid CGT.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Beware the coming changes to Capital Gains Tax rules: | LandlordZONE.

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Exclusive: Rob Moore of Progressive Property reveals views on property academy regulation

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Following our recent article on property investment academies and the questionable activities of some operators, we asked the leading player in the market what should happen next.

Last month
LandlordZONE shone a light into the famously Wild West world of property
investment academies, many of which are hugely popular with novice investors.

As our
investigation showed, thousands of people have been attracted to this sector by
the promise of making both income and capital from property, often with small
amounts of – or zero – initial cash to invest themselves.

Their enthusiasm is
understandable; courses offer the training needed to operate rent-to-rent
schemes that enable ‘no cash down’ investment as well as the opportunity to
eventually become a more traditional buy-to-let investor.

Many property
academies are mini businesses by themselves, charging between £1,000 but up to
£15,000 for courses that offer mentoring and access to deals and mortgage
products.

The problem is that
it’s unregulated despite those within it handling tenant deposits,
down-payments on properties and signing leases that can last five years.

These academies
vary in what they offer but the best-known and biggest is Progressive Property.

It claims not to
employ the high-pressure sales tactics and provide the low-quality training
that its less scrupulous competition are well known for, and says that if the rest
of the property academy world adopted its approach, it would be a better place.

Progressive
Property has been around for nearly 15 years and is based in Peterborough, as
are many of the properties it manages or owns.

Its co-founder, Rob
Moore, is considered to be the ‘king’ of the property investment trainers. Does
he think the industry needs more regulation, a key message that emerged from our
article.

“I would be worried
if regulation gets a bit too heavy handed and you use a sledgehammer to crack a
nut,” he says.

“A good example is
the ‘sale and rent back’ or SRB sector that flowered briefly [during the
noughties until being shut down by the Financial Conduct Authority in 2012].

“Because of a few
people were slightly abused by SRB operators, it then became over regulated and
it ceased to be a commercial opportunity any longer and essentially [the FCA
activity] stopped the sector in its tracks.”

Moore says the property
academy sector should work together to stop a similar scenario developing.

“The one thing all
of us operating within this market have in common whether we are a landlord,
investor, educator or a commentator on a LandlordZONE forum or even a critic,
is that we all agree that property is a great asset class.

“We should be more
united in remembering that and we shouldn’t have this big divide and should instead
work together more to create voluntary regulation and a code of practice.

“I’m up for
anything that protects the new property investor, but I don’t want to see the regulation
to be so heavy that you can’t say or do anything.”

Moore claims that
whether you love or hate property academies, companies like his have provided
thousands of people with new careers and pensions, and that heavy-handed
regulation could end this overnight.

“Capitalism and the
free market is always a balance between innovation, creativity, competition and
regulation – too little regulation and you get the Wild West, too much and you
kill the market,” he says.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Exclusive: Rob Moore of Progressive Property reveals views on property academy regulation | LandlordZONE.

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Liverpool plans ‘alternative’ licensing scheme

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Liverpool City Council has confirmed it will NOT seek a Judicial Review on plans by the Secretary of State to block its plans to renew its controversial selective licensing scheme. However, the local authority is now planning an alternative. A city council cabinet report said officers from the authority are working with the Ministry for […]

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