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

admin    Uncategorized     agents

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

The post £2.9bn increased Councils funding includes rewards for building new homes appeared first on Property118.

View Full Article: £2.9bn increased Councils funding includes rewards for building new homes

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

admin    Uncategorized     agents

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. […]

The post Call of the Week: Supporting a long-term tenant who struggled to pay rent last month appeared first on RLA Campaigns and News Centre.

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

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

admin    Uncategorized     agents

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.

View Full Article: Why become a landlord if you can’t regain possession?

Welsh Government want 12 months eviction protection

admin    Uncategorized     agents

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

The post Welsh Government want 12 months eviction protection appeared first on Property118.

View Full Article: Welsh Government want 12 months eviction protection

BREAKING: Huge surge in demand for rented property recorded in January, say letting agents

admin    Uncategorized     agents

Last month was the busiest on record for letting agent branches as the number of tenants registering for properties increased by 56%.

Letting agents say they experienced a record
56% increase in demand for rented property during January, latest figures show.

Members of industry association ARLA Propertymark said they saw 88 prospective tenants registered for each branch up from 56 the month before, but that diminishing supply of stock meant 42% said their landlords had asked for rents to be increased as the market tightens.

This would not appear to be a monthly blip, either. ARLA says demand for rental accommodation is also rising year-on-year, up 21% when compared to January 2019.

But the pressures on landlords of recent tax hikes and increased regulation as well as the temptations of switching to Airbnb are impacting supply.

The number of properties managed per lettings agency branch dropped to a six-month low of 191 homes and that overall the number of homes available to rent in the market is down year-on-year.

Tenants are literally paying for the government’s clamp-down on private landlords; Two years ago 18% of tenants surveyed by ARLA had experienced a rent increase during January, a figure which has jumped to 42% this year. “Our recent research found that tenants could miss out on nearly half a million properties as more landlords exit the traditional private rented sector and turn towards short-term lets which will only serve to worsen the problem for those seeking longer term rental accommodation,” says David Cox, ARLA Propertymark Chief Executive.

“With the Spring Budget around the corner, it’s important that the Government works to make the private rented sector attractive to landlords again, rather than introducing complex legislation which ultimately squeezes the sector and leaves tenants worse off.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Huge surge in demand for rented property recorded in January, say letting agents | LandlordZONE.

View Full Article: BREAKING: Huge surge in demand for rented property recorded in January, say letting agents

Edinburgh begins its much-publicised crackdown on Airbnb

admin    Uncategorized     agents

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.

View Full Article: Edinburgh begins its much-publicised crackdown on Airbnb

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

admin    Uncategorized     agents

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.

View Full Article: Nigerian landlord ordered to return rent and pay fines totalling £202,000

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

admin    Uncategorized     agents

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 […]

The post Today in politics: short-term lets, Local Housing Allowance and agents appeared first on RLA Campaigns and News Centre.

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

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

admin    Uncategorized     agents

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.

View Full Article: Scotland’s worst landlord is jailed for two years after ignoring regulations and fines

Multi-Sale SDLT?

admin    Uncategorized     agents

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’

The post Multi-Sale SDLT? appeared first on Property118.

View Full Article: Multi-Sale SDLT?