Why this budget needs to get Britain moving again

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First Brexit. Now Coronavirus. With consumer confidence at a low, the housing market faces the prospect of another moribund year – unless Boris rethinks stamp duty and stops over-taxing landlords, in a bid to ease up housing affordability and supply.

That’s the view of property professionals in the lead up to Wednesday’s budget with stamp duty reform top of the wishlist’s of many. “Boris Johnson has previously pledged to implement changes to Stamp Duty legislation by raising the threshold to £500,000. It would relieve large sections of the country from the burden of stamp duty and go a long way to bolstering consumer confidence,” says Iain McKenzie, CEO of the Guild of Property Professionals.

The mooted 3% stamp duty surcharge on Non-UK investors
divides opinion, but its introduction may help ease the “chronic imbalance”
between supply and demand of housing stock, says Jamie Johnson, CEO of FJP
Investment, whose recent poll of 750 UK property investors found that 70% were
in favour of the surcharge. “With such
widespread support, the Government could go further still and also reduce the
tax on first time buyers who have yet to gain a foothold on the property ladder,”
he comments.

It’s expected that the Government will hold firm on its commitment
to repeal Section 21, which will make it harder for landlords to evict tenants.
And it’s unlikely there will be a U-turn on the phasing out of mortgage relief for
landlords. But increasing regulations and taxes are the main reason for 37% of
landlords saying they are looking to sell properties in 2020, according to
research by Accumulate Capital.

“The Government should do more to support landlords to
remain in the sector, not drive them out,” says McKenzie.

Reforming stamp duty is a complex task, however, and compromise
may be the answer, thinks Sean Hooker, head of redress at the Property Redress
Scheme. “I can see a tweak in so far as overseas landlords facing a penal hike.
However, domestic landlords should not expect a rolling back of the past
changes brought in to ‘stimulate’ the first-time buyer market.”

High numbers of landlords may be planning to sell up this
year. But many are considering migrating to the short-let sector, potentially
removing nearly half a million properties from the long-term PRS housing stock.

David Alexander, head of the property management
company Apropos by DJ Alexander, is calling for a level playing field between
the long and short-term rental sectors. “It cannot be right that short term
holiday letting enjoys a more favourable tax environment,” he comments. “Surely the long-term
letting market, which provides permanent homes for millions of individuals,
deserves comparable treatment to a market providing holiday homes for
tourists?”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Why this budget needs to get Britain moving again | LandlordZONE.

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Open A Business Bank Account In Minutes

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For landlords who need to open a business account FAST we recommend Tide.

In just just a matter of minutes you can open a business bank account online and obtain an account number, sort code and a free business Mastercard (applicable to Limited Companies and LLP’s as well as sole owners).

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The property ‘academies’ praying on students’ loans

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Two young entrepreneurs have warned students about the danger of being lured by property training companies who are only after their student loans.

Josh and Dan spoke out this week in a
video on Property Tribes, an online forum for landlords, revealing how one firm
instructed them to target students by creating appealing content on YouTube and
social media.

It follows a number of stories in the
media about property investment training ‘academies’ touting
themselves as a quick-fix solution for those either looking to pay off debts,
‘get rich quick’, or invest in property with very little cash. Last week, a BBC investigation highlighted the tragic
case of Danny Butcher, a former soldier who killed himself after trying to
clear his debts by enrolling on a £13,000 course run by Property Investors.

Josh and Dan were hired to do
marketing, content creating, and social media posts, and were told to target
students who could use their student loan to pay for the training course, with
the lure of ‘financial free passive income’. They soon became uncomfortable with
the arrangement and no longer work for the firm.

“Some students want to be an entrepreneur, but there’s
naivety as they don’t understand what they’re being targeted by. Young people
like to be told they can be financially free, but if you don’t have to put much
work in, you probably won’t get much out,” says Dan.

Josh adds: “They sold us a job in the same way they sold their course. Now we can see they just want to get people through the door. I was filming a mentor session, and after the mentee left, the property trainer said ‘they won’t go anywhere’, but they’ll still take their money.”

The pair are urging others to be wary of salesmen with these property trainers who might also recruit them to work on similar projects. “They’ll take advantage of your hunger and passion,” says Josh. “You’re just cattle to them.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The property ‘academies’ praying on students’ loans | LandlordZONE.

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Corporate let turned into party central

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A landlord tells of his ongoing dealings with a ‘corporate let’ company who promised him an embassy tenant, but instead have turned his property into party central.

When Panos Lassi bought his three-bed flat in Chelsea, he decided it made more financial sense to rent it out to cover the large mortgage and to rent somewhere cheaper for himself to live in.

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‘How my Chelsea flat meant for corporate tenants became an AirBnB bachelor party pad’

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One landlord tells LandlordZone of his ongoing dealings with a ‘corporate let’ company who promised him an embassy tenant – and instead have turned his property into party central.

When Panos Lassi bought his three-bed flat in Chelsea, he
decided it made more financial sense to rent it out to cover the large mortgage
– and to rent somewhere cheaper for himself to live in.

His lettings agent, from a leading national agency,
recommended a “corporate lets” company who promised him the perfect tenant. “They
told he was a single guy who works for the French embassy. They even sent me an
email, apparently from the embassy, showing me he was an employee,” says Lassi.
“The agent reassured me that they had worked with this client for five years, so
I didn’t need to ask for a deposit and I should drop the rent by £500 a month
to just over £3,000,” he says.

Lassi agreed a two-year fixed rent contract without a break
clause. But he soon began receiving late night calls from neighbours
complaining about the noise and a letter of complaint from the council. “The
‘corporate agent’ is advertising the flat for up to eight people a night on
AirBnB and earning £7,000 a month,” says Lassi. “When I asked my lettings
agent, who is charging 11% to find me a decent tenant, they said they had no
idea about any of this.”

Lassi is fortunate, at least, in receiving the rent that was
agreed with the company. But he fears taking the company to court will cost him
thousands of pounds and several months – and he may still lose. “I’ve weighed
up my options and decided the lease to run its course,” he says.

He is also worried about heavy wear and tear on his property
– “I didn’t agree to rent it out nightly,” he says. “We found cigarette butts
stuck in the drain hole on the roof terrace, which caused water to flood in to
my neighbour’s apartment below. My insurance has doubled to £5,000 a year as a
result,” says Lassi.

As his mortgage company, insurance company and the council
disallow use of this property for short lets, he is also potentially in breach
of various contracts. “I’m taking all the risk. The bank view me as a victim, but
the insurance company say it could be a problem,” says Lassi, who is now
seeking damages and a refunded of his fees from the lettings agent.

There is a desperate need for regulation surrounding
guaranteed rent, or rent to rent, companies, says Paul Shamplina, founder of
Landlord Action, who is familiar with Lassi’s case.

“There are more and more of these serviced apartments and
rent-to-rent companies in the industry because of the growth in the shared
economy and increasing rents. Demand is especially strong in London,” says
Shamplina.

“Lettings agents need to be much more transparent and
stringent about the companies who are taking out the rental – and they need to
explain the repercussions to landlords, such as the endless possible breaches, such
as sub-letting in a block, renting to illegant immigrants, and issues of anti-social
behaviour and noise,” he adds.

“We need a trade body or association that oversees
guaranteed rent and rent-to-rent so that landlords and sub-tenants know who to
pay their money to and who to deal with if anything goes wrong. At the moment,
it’s the Wild West.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘How my Chelsea flat meant for corporate tenants became an AirBnB bachelor party pad’ | LandlordZONE.

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Bristol landlord fined for housing a family in shop storage space

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A rogue landlord has been fined £87,000 after environmental health officers found children sleeping in cupboards behind his rented convenience store.

Deepak Singh
Sachdeva, of Moresby Avenue in Surbiton, was found guilty by Bristol
magistrates of renting out poor quality living
accommodation that posed a serious risk to life.

When officers investigated his Premier shop
premises on Avonmouth Road in Avonmouth, they found nine people in two separate
living spaces above the shop’s rear storage area, with three of them, including
two young children, sleeping in cupboards in the eaves of the roof.

Councillor Paul Smith, cabinet member
for housing, says: “These were some of the worst conditions environmental health
officers working in this field have seen. The property had been so badly built
and managed that the tenants were constantly in serious danger. The risk was so
severe that the council had little option but to formally order people not to
live in the accommodation.”

The property was in such poor
structural condition and design that it posed a serious risk to life. There was
barely any fire-resistant separation between the shop store and the flat above,
with the floorboards of the living accommodation clearly visible from the
storage area immediately below. Other problems included large gaps around fire
doors and a lack of smoke detectors, while one of the studio flats also lacked
basic ventilation, had no external windows and limited access via a poorly
maintained staircase.

Singh Sashdeva was ordered to pay
a victim surcharge of £120 and £1,434 costs. Magistrates said the large fine
reflected his complete disregard for tenants’ safety, particularly children,
and the serious risk to life the property posed.

Bristol City Council has been getting tougher on rogue
landlords, using its Rogue Landlord Unit and a licensing scheme covering much
of the city.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Bristol landlord fined for housing a family in shop storage space | LandlordZONE.

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Today in politics: Cladding, finance, education and Universal Credit

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Today we talk about MHCLG’s cladding inquiry, new figures showing tenants are using overdrafts to cover their rent, a new education programme on how to rent and evidence presented to the Lords’ Universal Credit inquiry. Cladding inquiry An inquiry to review progress in removing potentially dangerous cladding from high-rise and high-risk buildings, and the adequacy of […]

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NRLA boss to address Property Investor Show

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NRLA chief executive Ben Beadle will be the keynote speaker at this year’s Property Investor Show. Ben will take to the stage on both days of the show to talk about the new organisation, which is being created through the merger of the RLA and NLA – and its increased strength as an entity at […]

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Landlord not aware of Nottingham Licensing – Help?

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I have a client who has just approached me with a problem. He moved to London 2 years ago and let his house to a friend and her daughter. He wants to sell so the friend/tenant went to the council (he doesn’t know why but I have informed her it will be because she doesn’t want to leave).

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County Durham to be hit by largest Selective Licensing proposal yet!

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The proposed scheme will cover 51,000 properties across County Durham! Landlords will have to pay up to £590 for each property in this area which could net the Council more than £25,000 000 in licence fees.

Durham County Council (DCC) claim that their scheme will cover almost two thirds of the county

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