Havering Council extends Licensing and Landlord Fines Money Machine

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Havering Council has agreed to the extension of its landlord licensing gravy train. The current scheme was launched in March 2018 and has bagged the council the best part of a £million with £417,500 in financial penalty fines, and £350,000 from 314 HMO licences issued to landlords and paid for by increased tenant rents.

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SHOCK figures: London to lose a net 13% of all renters once Covid restrictions finish

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London landlords will face a challenging rental property market once the pandemic subsides, it has been claimed.

Rentals platform SpareRoom.com says its research among renters in the capital reveals that 27% are waiting to move once Covid restrictions lift, and that half of them expect to leave London altogether, a majority of them planning to move to towns or villages outside the city.

SpareRoom says that London is therefore unlikely to ‘go back to normal’ as many companies continue to enable employees to work from home, removing the need for them to live within commuting distance of central offices.

The upshot of this is a projected 13% net exodus of renters from London, which is likely to significantly lower rents as supply begins to outstrip supply.

Save money

Looking at the wider market, SpareRoom says almost a quarter of 23-29 year olds left their rented accommodation during the pandemic to save money or after losing their jobs.

Many have chosen to move back into their family homes, and a third of 23-29 olds now live with their parents compared with 18% of thirty-somethings.

“We’re looking at a redrawing of the UK’s rental map in 2021 and London will be the biggest loser,” says Matt Hutchinson from SpareRoom (pictured).

“Whether it’s down to the catastrophic effects of COVID on tourism, hospitality and the arts, driven more by lifestyle factors like wanting outdoor space, or simply the realisation that many jobs can now be done from anywhere, London living is losing its appeal for many.

“We’ve already seen the effects on London rents, with averages falling consistently since spring.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – SHOCK figures: London to lose a net 13% of all renters once Covid restrictions finish | LandlordZONE.

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HMOs: Bath is latest city to launch clampdown plans

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Bath and North East Somerset Council is the latest local authority to clampdown on HMOs within its private rented housing market.

This follows similar moves by a raft of other councils this year particularly on HMO density, a problem that Bath and North East Somerset says it wants to tackle. There is also a Bill going through parliament that will give local councils like Bath greater powers to regulate this type of rented property.

The council is to consider a report to be published tomorrow that will reveal the detail of its plans.

It is expected that these will include bringing new-build properties into its existing HMO policy, as well as including family homes that are converted into multi-occupancy rented units.

The council also intends to tighten up policy for landlords seeking to upgrade HMOs from small to larger units, create new parking standards for HMOs and look at further regulating student HMOs and other types of university accommodation.

These proposed changes are being spearheaded by local Liberal Democrats who have a majority on the council. The party says it is reacting to resident concerns about the rapid spread of HMOs particularly within Bath.

“HMOs are important in the provision of affordable housing for younger people, but we also need to ensure a mixture of housing types in the city,” says Councillor Alison Born (pictured).

“I’ve heard numerous examples of families who have not been able to find homes to buy or rent in Bath, due to the number of HMO properties.

“A better mix could also help protect community assets, such as schools, because the conversion of family homes to HMOs drives down demand for school places.”

If approved, the plans will go forward to a six-week public consultation.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – HMOs: Bath is latest city to launch clampdown plans | LandlordZONE.

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How long do I need to live in the property to avoid CGT?

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I wanted to ask if I sell my main residence and move into my only buy-to-let property thus making it my main residence which I will live in, changing bank account, credit cards, register to vote at the address etc.

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Proposed Fair Rents Bill could lead to more frequent rent increases

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Tenants could be subjected to higher and more frequent rent rises if the Fair Rents Bill is passed through the Scottish Parliament as planned.

In its response to the Call for Evidence on the Bill, which is calling for a rent cap on private rented properties in Scotland

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EXLUSIVE: Buy-to-let mortgage trouble as surveyors lower rent estimates

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Surveyors have begun downgrading rents when measuring up properties to inform lending for landlord mortgages, it has been claimed.

Dan Lee of brokerage Total Landlord Mortgages says increasing numbers of his landlord clients applying for mortgages at the moment are seeing their rental estimate down-graded by lenders’ surveyors, making it harder to get applications over the line.

This is particularly so for properties being purchased in central and inner London. The city’s central office districts are still almost ghost towns at the moment as many commuters continue to work from home.

This has weakened demand for rental property particularly within London’s pricey inner-city areas such as Finchley, Clapham and

Wandsworth, where many younger renters are shipping out to cheaper rural or suburban area as their employer’s offices remain close due to Covid.

“It is obvious from the lending decisions coming across my team’s desks that many lenders are getting nervous about rent levels both in London and in other urban centres where demand is weakening, and that landlords are accepting lower rents,” says Dan (pictured).

Hesays he believes landlords faced with tenants who have lost their jobs or been forced to take pay cuts are happy to drop their rents rather than lose a good tenant, while others whose tenants move out are being forced to drop their asking rents to get viewings.

Less demand

LandlordZONE has spoken to one landlord in SW London who normally has to organise ‘open houses’ to deal with the dozens of tenants who cram in to view his flat in Balham when it comes up for rent.

But the landlord, who wishes to remain anonymous, says this time last month only one couple turned up to view the property and said they’d take it if the rent was dropped by 10%.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXLUSIVE: Buy-to-let mortgage trouble as surveyors lower rent estimates | LandlordZONE.

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Student accommodation collapse next year ‘very unlikely’

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Predictions of a student accommodation meltdown in the New Year are wide of the mark, latest research among under-graduates has claimed.

Property management platform Bunk believes predictions about the demise of student accommodation next year have been greatly exaggerated.

Its poll of 300 first and second-year students found that the student property market has been largely unaffected by the Covid escalation, despite the fact most students will be returning to their university digs next year without being vaccinated against the virus.

It found that 85% of current students plan to return to rent at university in 2021, while four out of five of them say that while the experience has been different to how they had imagined, they ​would still rather be enrolled and living at university than at home.

Meanwhile, 78% of students say any disappointment they feel is towards the university rather than their living situation.

Bunk adds that although Covid will have an impact on the future developments of student accommodation, both landlords and purpose-built accommodation (PBSA) providers should expect to see their properties being filled quickly.

Ali Fazel, 21, (left) a second-year politics student at Birmingham University, says: “While the coronavirus pandemic has made lots of students reconsider their future pathway, I feel more determined than ever to re-enrol in the student lifestyle which is incomplete without a fun house filled with my mates.”

It follows research from StuRents that the PBSA sector has grown by 2.6% in 2020 with more than 25,000 new beds coming to the UK market, meaning that the number of private PBSA beds has surpassed university supplied accommodation for the first time.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Student accommodation collapse next year ‘very unlikely’ | LandlordZONE.

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UK comes top in world rankings for property taxes…

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Landlords have long suspected that UK property taxes are higher than in many other countries, and previous studies have shown this to be the case, but to come out at the top of the rankings is somewhat galling for UK owners to say the least.

It’s the second year running that the UK has topped these rankings for the highest property taxes as a percentage of overall taxation. The highest in the developed world, that’s according to new OECD data.

According the OECD’s latest figures, tax revenues from UK property were at £90.6 billion during the financial year for 2019/20, that figure is up from £88.4 billion in the previous year – it also means that the UK has seen the highest property taxes in six of the last 10 years, according to the organisation.

The OECD’s definitions state that taxes on immovable property – often simply called “property” or “real estate” tax – comprise levies on land and buildings and other physical capital like machinery. They can be considered a capital tax since they tax an asset or an input to production. They can be considered a consumption tax since they tax the services that derive from living in an apartment or a house. They can also be considered an income tax since they tax the imputed rent from owning a house.

Property taxes are generally based on the value of immovable property assets, and unlike most other taxes, property values are generally based on estimates. Therefore accurate valuation and assessment of properties is key to a fair, efficient property tax system. Valuations in turn are based on a property’s potential market value which is generally considered to be the most appropriate yardstick for determining the property tax base.

For the UK, the OECD’s property tax figures include all receipts from council tax, business rates and stamp duty, while for Scotland they also include land and building transaction taxes.

Covid-19 has “muddied the waters” somewhat given that, in particular commercial retail property values have been in rapid decline, while most residential property has actually increased in value slightly, meaning that it’s difficult for fair tax rates to keep pace.

During the UK lockdowns retailers big and small and hospitality firms have been given a business rates holidays to ease the burden. Meanwhile several retailers, including supermarkets that have gained somewhat from the crisis, have subsequently agreed to hand over the savings, including Tesco, Sainsbury’s and Aldi, in total to around £2 billion. Rishi Sunak the Chancellor has also introduced a stamp duty holiday for those buying a house below £500,000 in England until 31, March 2021.

Property taxes in the UK accounted for 12.4% of overall taxation, with in second place the US at 12.1%, Canada at 11.6%, South Korea at 11.4% and Israel at 10.1%.

Robert Hayton, head of property tax at Altus Group, told TheExpressandStar.com:

“The unexpected cost of Covid might mean that the Chancellor has limited short-term scope to meet his commitment to reduce the burden of tax on commercial property, but that mustn’t also mean potential reforms are shelved.

“There are fiscally neutral, and blindingly obvious, changes that could be made to property taxes that would increase fairness and pave the way for a better system in the future.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – UK comes top in world rankings for property taxes… | LandlordZONE.

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Tenants liable to pay Stamp Duty?

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Stamp Duty Land Tax (SDLT) is normally directly associated with purchasing a property or land rather than with our renting tenants, but it may come as a surprise to know that certain long term renters have had to pay 1% SDLT.

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Tracking an Errant owner/Landlord?

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The tenant has complained of mice in the property – and she knows for sure they are coming from the adjoining house as a previous tenant of the neighbouring house left for that exact reason!

The house in question is an HMO now with people coming and going all the time according to my tenant.

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