Differences of opinion – What do you think?

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In embedded video below there are two answers given by the presenters (Mark Smith and Andrew Roberts) that I disagree with.

The first is in regards to the pricing on Limited Company Buy-to-Let mortgages vs individual Buy-to-let mortgages.

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LATEST: Insurance policies to feature ‘Airbnb clauses’ reveals leading provider

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Specialist broker and underwriter PIKL says property owners will soon be asked whether they intend to rent out their properties via short-let platforms when applying for insurance.

A recently-launched initiative
to introduce new questions for property owners to answer when applying for property
insurance will be a ‘game changer’, LandlordZONE has been told.

This means that, soon, home
owners and landlords will no longer be able to use short-term let platforms
like Airbnb without knowingly breaching the terms of their policy.

“This development is
significant because one of the biggest challenges is identifying who is doing
short-lets rentals and making sure they get the correct kind of insurance,”
says Louise Birritteri (pictured) of specialist insurer PIKL.

Birritteri says she doesn’t
believe anyone deliberately tries to avoid getting short-lets insurance, but
rather than many don’t realise that renting out a property or room via Airbnb,
for example, could void their existing cover.

She says the questions, which
may take some time to become standards, were developed in partnership with Polaris,
one of the main standards setters within the insurance industry.

“We found that insurance companies, brokers and price
comparison websites were not determining, in their traditional customer
journeys, whether those taking out cover were short term letting,” says
Birritteri.

“Without collecting this information, customers are at risk of
unintentionally taking out cover that may be inappropriate for them or could be
voided by their sharing activity.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Insurance policies to feature ‘Airbnb clauses’ reveals leading provider | LandlordZONE.

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EXCLUSIVE: Large fine over improvement notice exposes risks of buying rental properties

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Following a £15,000 fine a landlord in Harrogate, RLA legal expert David Smith warns landlords to work with local authorities if properties they purchase are sub-standard… or risk a fine.

Landlords are being urged to tread carefully when buying
properties with improvement notices, after one was fined £15,000 for failing to
make repairs that were flagged up when it bought the house.

Kingspark Limited lost its appeal
against the fine at tribunal after its property on Electric Avenue, Harrogate
(pictured), was found to have fire and gas hazards, as well as mould and
structural issues. ​

An improvement notice had been
served on a previous owner who failed to carry out repairs, which meant
Kingspark became responsible for the problems when it bought the property in
September 2018. ​

David Smith, policy director at the Residential Landlords
Association, warns landlords to be cautious about buying properties with
notices and engage actively with local authorities if they do.

He tells LandlordZONE: “At the same time, local
authorities should look to work with landlords buying properties that need work
as they are potentially there to sort things out and so they must engage
positively with them.”

An investigation by Harrogate
Council landed Kingspark with the fine; it had given the company three months
to comply with the notice, but repairs were made after the deadline. ​

Kingspark then appealed the
penalty but the tribunal concluded that its delay in agreeing to carry out the
works was unjustifiable. It did not admit its culpability but continued to
blame the tenant for the condition of the property, according to the tribunal.
​

The council says its policy is in line with legislation. Councillor Mike Chambers, cabinet member for housing and safer
communities, says:
“Even after being served with an improvement notice this landlord failed to act
responsibly.

“This
is an important reminder for landlords that as the housing authority we have
the powers, and where necessary, will use them to protect tenants and residents.”​

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: Large fine over improvement notice exposes risks of buying rental properties | LandlordZONE.

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LATEST: Activists call landlords ‘parasites’ and picket TV presenter’s buy-to-let workshop

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Living Rent claims rent rises are ‘out of control’ in some parts of Scotland and that Martin Roberts’ event in Edinburgh is encouraging market speculation.

Scotland’s
tenants’ union has branded landlords “parasites” and is picketing an Edinburgh
event tomorrow aimed at helping them maximise profits.

At least 50 Living Rent supporters
are poised to join a demonstration outside the free workshop, described as a
free two-hour preview for Homes Under The
Hammer presenter Martin Roberts’ property investment course.

Although Roberts himself
won’t be at the event at the city’s Hilton hotel, aspiring landlords will be
given tips about
how to acquire finance, beat the
competition, and calculate their maximum price – complete with training videos
and e-books.

Rent controls

Living Rent is repeating
calls for the Scottish Government to introduce more effective rent control
measures, with a call to action on its Facebook
page: “Join us to say homes should be for people, not for profit – and demand
the government introduce proper, strong rent controls to stop property
parasites from driving tenants into poverty.”

So far, 52
people have promised to take part in the protest with more than 300 people
interested in the event.

The group says the costs of renting in Scotland’s capital
continue to rise at eye-watering levels, and that between 2010 and 2019, the
Lothians saw the average price rent for a two-bedroom property rise from £665 a
month to £972, a 46.3% increase.

Eleanor White, from Living Rent, says: “Scotland’s
housing market is deeply broken. People simply won’t forgive the government if
it continues to stand by and watch as people are driven further into poverty by
this kind of parasitic approach to housing.”Pauline
McNeill MSP’s Proposed Fair Rents (Scotland) Bill or ‘Mary Barbour Bill’ is currently hoping to win
approval in the Scottish Parliament; it aims to radically reform the sector by
linking rents to average wages and providing more information about rent
levels.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Activists call landlords ‘parasites’ and picket TV presenter’s buy-to-let workshop | LandlordZONE.

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How are you feeling about being a landlord? Well, that depends on your location and portfolio size!

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Research by buy-to-let mortgage firm Paragon rising optimism among landlords but with surprisingly wide regional and business sector differences.

Landlords in the South West and East Midlands are most likely to be feeling good about their business and predicted yields over the next three months, while those in central London and the North West most downbeat about their balance sheet.

In its quarterly market overview, buy-to-let mortgage provider Paragon reports that it’s not all doom and gloom in the sector, with those renting out 11 or more properties the most positive about their prospects.

Interviewing
nearly 800 landlords, it found 42% in the South West rated business
expectations as good or very good in the next three months compared with 23% in
the North West.

Boris
bounce

The
Boris Bounce seems to be filtering down into the private rented sector generally,
as Paragon found a big jump in landlord confidence in the UK financial market,
with 24% rating its prospects as good or very good compared to just 9% in Q3.

And
although they’re less optimistic about the prospects for yields, landlords
still believe both rents and property prices will increase as a direct result
of the election; a quarter of respondents said rents would rise, compared to 1%
who predicted a fall.

Richard Rowntree, Paragon managing director of mortgages,
welcomed the green shoots of recovery in confidence after several quarters of declining
optimism.

“Although
still low compared to historic levels, a more certain political and economic
landscape will hopefully provide the platform for confidence to continue to
grow,” he says.

“Although
tenant demand has remained strong, landlords have had to weather a myriad of
regulatory and tax changes over the past five years, so they will be looking
for Government to allow those changes to fully bed in and for a period of
consistency.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How are you feeling about being a landlord? Well, that depends on your location and portfolio size! | LandlordZONE.

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ARLA report – Huge blow for tenants

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ARLA’s latest PRS report, click here, shows tenant demand reaching a record high in January, with an average of 88 prospective tenants registered per member branch. Annual demand for rental accommodation has increased by 21%, rising from 73 in January 2019.

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£2.9bn increased Councils funding includes rewards for building new homes

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Following a vote in the House of Commons, the government confirmed councils in England will have access to a share of £49.2 billion in 2020 to 2021, an increase of £2.9 billion or 4.4% in real-terms.

The settlement will give councils access to a £1.5 billion boost for social care funding and ensures

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Call of the Week: Supporting a long-term tenant who struggled to pay rent last month

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This week we had a call from one of our members who needed advice in managing an issue they were having with one of their tenants. They had a long term tenant in one of their rental properties who had been there for a number of years, and maintained a good relationship with the landlord. […]

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Why become a landlord if you can’t regain possession?

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Section 21:

That’s the
question posed by Charles Moore writing in yesterday’s Daily
Telegraph.

Why do people let
houses?, Moore says. The obvious answer to that is, because they
expect to make money from their investment and they want their money
in a safe place – “safe as houses” as has always been the
mantra of the sage property investor.

Profit is not large in buy-to-let but it still usually blows away what can be got investing in an easy access savings account at a little more than 1%. What’s more the safe store of value and gradual capital growth gives a nice hedge against inflation.

The low interest
environment has pushed up prices but they have also produced some of
the lowest mortgage rates in living memory, what’s more the Bank of
England has forecast that interest rates could stay low for the next
20 years!

Even so, landlords profits are being squeezed by a hostile tax environment due to tax changes introduced by George Osborne and unchanged by his successors, though we’ve yet to see what the current incumbent will do. My guess is not much.

If landlords can’t make good enough returns for the risk and hassle they perceive, then they will not want to let property any more, and what’s more, as the senior end of the landlord cohort start to cash-in, and sell-down, new younger landlords will no longer come along to replace them.

Yet, in the face of all this the Government is toying with the idea of getting rid of Section 21 says Moore. “This section allows a landlord to ask a sitting tenant to quit at the end of an agreed period. If it is abolished, so that no notice to quit can ever be issued to a tenant, the incentive to let disappears. The value of the property thus encumbered drops, sometimes halves. Besides, sitting tenancies require rent controls to work, so the landlord will be stuck, not only with the tenant, but with every prospect of lower returns as time passes,” he says

The combined effect of the current tax regime and the changes in the letting laws could be devastating for thousands of small-scale UK landlords, ironically most of them natural Tory voters.

For a start, unless the government comes up with an acceptable alternative to section 21, and it’s hard to see what that would be, property values will be affected. Mortgages may no longer meet the lenders’ loan-to-value criteria, so technically the loans could be called in.

A knock on effect
would be on all the ancillary services that help landlords with their
buy-to-let investments: agents, builders, plumbers and electrical and
gas engineers, the very people the government says it wants to
encourage, as Moore says, “…just the sort of aspirant, practical
people the country needs.”

Low earners are struggling because of the housing shortage and high rents, but creating an army of sitting tenants on protected rents will not only impede mobility – movements between jobs – it will result in a run-down housing stock because landlords will no longer run an unprofitable business and maintain housing standards.

We’ve seen this effect already with those Protected Tenancies still left over from the Rent Act era, where landlords either can’t or won’t spend money maintaining and modernising their properties when their tenants have been in occupation for a long as 50 years on a controlled peppercorn rent.

There are an estimated 1.5 million landlords in England alone. Property has long been a go-to option for people looking for bank-beating returns on their excess cash. But in a recent survey of 19,000 landlords 17% said they’re likely to sell up. More worryingly though, 56% weren’t confident property will provide adequate returns over the next ten years.

Life has become very
tough for the amateur landlord but the government, while professing
for years how much it values the small-scale landlord, seems not to
care. In fact it’s squeeze on landlords could be said to be
compatible with Conservative political philosophy – to create or
maintain a home-owning democracy, as opposed to a nation of renters,
then you have to stop landlords from competing with first-time
buyers.

Landlords are a relatively small voting group and garner little sympathy from the media and the general population. So to quote Jean-Baptiste Colbert, Louis XIV’s finance minister, if “the art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least amount of hissing”, then landlords represent an attractive target group.

Osborne’s strategy
was to “level the playing field”, or as it transpires, tilt it
towards first-time buyers. The changes have helped HMRC to rake in a
bumper harvest of tax revenue, not just from landlords’ income tax,
but on the considerable capital gains made by those who have now
decided to cash in when the properties have been held for some years.

In the 2018/19 tax year, capital gains tax (CGT) receipts, largely from landlord sales, rose by nearly one-fifth over the previous year, from £7.8bn to £9.2bn. By scrapping landlords’ ability to claim tax relief on their mortgage interest the government has simply nudged those landlords who where teetering on the brink of profitability to throw in the towel. In the meantime, other landlords, sensing the change in the political landscape, have also decided to get out before there’s a rush for the door.

The whole thing would seem to be designed to apply downward pressure on house prices; landlords can no longer afford to pay as much for properties given mortgage controls and the reduced profit they generate, while first-time buyers have fewer resources.

So a huge slice of demand is taken out of the housing market, while at the same time supply is increased at the margins as a group of forced-out landlord sellers are keen to be rid of unprofitable investment properties.

It’s hard to see
there being another house-price crash without a major downturn and
rising interest rates or surging unemployment (they usually go
together), but it’s equally hard to see any evidence of a return to
an investment bonanza for residential property.

Few people expected
to see the tax or political tide shift so drastically against them.
Portfolio landlords, usually operating as an incorporated business,
are weathering the storm much better, but for individual landlords
there is no doubt about it, the government has made life difficult.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Why become a landlord if you can’t regain possession? | LandlordZONE.

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Welsh Government want 12 months eviction protection

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The Welsh Government wishes to provide greater security for people who rent their homes. This security will be achieved by extending the minimum notice period for issuing a section 173 notice from two months to six months. Currently, the section 173 notice under the 2016 Housing Act operates in the same way as a section 21 notice

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