Suspended sentence for banned engineer who gave fake Gas Safe certificate to landlord

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A banned boiler engineer has narrowly avoided jail after producing a fake Gas Safe certificate for a landlord.

Jeffrey Lewis, 74, of Ashbourne Road, Cheadle, was asked by a landlord to repair a tenant’s boiler but failed to tell him he had been banned from carrying out gas work in 2015 after the Health and Safety Executive (HSE) investigated his dangerous workmanship.

Instead, Lewis carried out the repairs and produced the fake certificate. However, when the tenant – a woman with two children – continued to have problems, a legitimate Gas Safe engineer inspected the boiler and described Lewis’s work as appalling.

Lewis admitted two charges of contravening health and safety regulations and contravening a health and safety improvement notice.

Craig Morris, prosecuting for the HSE, said: “Lewis undertook the work in breach of the prohibition notice.

“He issued a UK gas safety certificate. It was a fraudulent document because he was not entitled to issue such a document. He put a false gas safety registration number on that, having undertaken the work.”

District Judge Timothy Boswell said he had taken Lewis’s chronic obstructive pulmonary disease and other health issues into account when sentencing him.

Deserved prison

He added: “You deserve to go straight to prison for what you did. However, I have decided in the circumstances it is appropriate to suspend the sentence.

“This all happened nearly three years ago, there have been no problems since, you are a very ill man. The reality is you are not going to be working with gas ever again.”

Lewis was sentenced to 52 weeks in jail, suspended for 18 months, and ordered to pay £1,000 costs and a £140 surcharge. An 18-month prohibition requirement also bans him from doing any gas fitting work, conducting any gas safety checks or issuing any gas safety certificates.

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LATEST: Pandemic persuades more landlords to hold on to their rented properties

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New research has revealed how Covid and rising capital gains tax have persuaded more landlords to hold on to their rented properties than would have otherwise been expected.

Hamptons’ research reveals that 131,900 rental properties were sold during 2020, the lowest figure for seven years, or just 12% of all sales in England and Wales.

But while the ever-changing Covid evictions rules have played a key role in subduing buy-to-let property sales, rising prices mean many landlords face escalating capital gains tax (CGT) bills.

Those who sold up last year in England and Wales realised a pre-tax profit of £82,450 or 42% more than they paid for it after nine years of ownership.

CGT bills for non-corporate landlords vary based on personal circumstances based on value, tax status, when it was bought and whether a landlord has lived in it.

But as a rule of thumb it can be estimated at 20-25% of a property’s sale value.

Top ten gains

The top ten local authorities where landlords made the biggest gains were all in London. 

In Kensington and Chelsea, which topped the list, last year the average landlord sold their buy-to-let for £784,980 more than they paid for it ten years ago. 

Camden, City of Westminster and Hammersmith & Fulham ranked second, third and fourth on the list, all where the average landlord gain exceeded £500,000.

“Landlord sales have been relatively high over the last few years due to tax and regulatory changes that have reduced the profitability for some investors,” says Aneisha Beveridge, Hamptons’ head of research.

“But given tax relief on mortgage interest will be fully phased out from the 20/21 tax year, it seems as though most landlords who would be hit hardest by these changes have already left the sector.”

She says that, although average capital gains have been shrinking, the house price surge during Covid has reversed this trend.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Pandemic persuades more landlords to hold on to their rented properties | LandlordZONE.

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Build costs for Apartment Block?

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I have just re-mortgaged my property and have taken out a substantial amount for investment and would like some advice about building apartment blocks from the ground up, please.

I understand an architect is needed to draw detailed plans and the builder can give me a breakdown of all costs for labour and materials

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EXCLUSIVE: Jersey landlords reject call for ‘rent stabilisation’ measures

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Jersey’s former housing minister has urged the island’s parliament to give more power to tenants by strengthening tenancies and stabilising rents, a move that the island’s landlords have told LandlordZONE they reject.

Reform Jersey leader, Senator Sam Mezec, wants the States Assembly (pictured) to declare a housing affordability crisis as the cost of rent continues to grow at a faster rate than average earnings.

He suggests introducing ‘rent stabilisation’, a simple mandatory system legislating that rents should be stabilised in line with inflation, by using Jersey’s Retail Price Index, as well as setting up a new rent commission that lets tenants challenge rental increases.

Mezec proposes creating different leases with no fixed end date as standard, as well as extending notice periods for both tenants and landlords as a way to end ‘no fault’ evictions, and creating a presumption that a tenancy will continue. He also wants Jersey’s legislation to specify when landlords can evict tenants matched with robust grounds for repossession.

He says: “The current system puts greater negotiating power into the hands of the landlord to insist on restrictive clauses – such as no children or no pets – or unjustifiable rent increases, which take advantage of the relative immobility that a tenant may have, when there is a housing shortage and costs associated with moving.”

States members are also considering a new licensing scheme on the island that would see landlords having to renew licences every five years.

The Jersey Landlords Association is frustrated by both these proposals and has tried unsuccessfully to suggest a complaints-based approach that could better educate tenants about their rights.

Chairman Peter Lucas tells LandlordZONE: “Rents are high because of low interest rates. I can’t see the island would be better off with a whole new layer of regulations and I suspect if it happens there will be a queue of landlords looking to sell up when there’s already a massive shortage of rental properties.”

Read more about the PRS in Jersey.

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How to apply for a buy to let mortgage as a self-employed landlord

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Self-employment is a lifestyle choice for millions of people offering freedom and flexibility. 

But the downside is that buy to let mortgage may equate self-employment with a lack of job security and therefore view a self-employed individual as a higher risk customer, when considering their application for a loan.

As a self-employed landlord, might seem like a barrier to entry when looking to purchase a new home or extend your portfolio by investing in buy to let property.

But the good news is that you can still get a buy to let mortgage, even though the application process may mean jumping through a few more hoops than a salaried borrower must follow.

“As a self-employed landlord, there are a few steps you can take to improve your chances of a successful buy to let mortgage application. At Total Landlord Mortgages we are here to support you in finding the right financial solution,” says Daniel Lee, Principal at Hamilton Fraser Total Landlord Mortgages.

Using our 25-year experience in the property finance sector, we’ve put together some tips on how to package your work prospects and finances for a bank or building society so that you are not seen as a high-risk customer.

Self-employed mortgages by numbers

First, it’s worth taking a look at the statistics relating to mortgages for the self-employed. Unfortunately, lenders do not give away the numbers specifically for self-employed buy to let loans, but it is fair to assume they follow a similar trend.

Data from the Office for National Statistics (ONS) shows 14 per cent of workers are self-employed. That’s 4.53 million out of the country’s working population of 32.51 million people.

Separate data from tech consultancy Studio Graphene revealed eight per cent of 18 to 55 year olds had recently started a business and another ten per cent planned to go self-employed. Their main motivation for this change was as a result of their former employers placing them on furlough or making them redundant due to the impact of the COVID-19 pandemic.

Other recent data tells a story for the self-employed:

• Since 2010, only ten per cent of all mortgages have been offered to the self employed

• If you are self-employed, you have a three out of four (75 per cent) chance of a successful mortgage application, compared to 89 per cent of borrowers with poor credit and 86 per cent of retirees, although it is a little more difficult it is still possible

What makes someone self-employed?

For a mortgage, you are self-employed if you are:

• A sole trader, partner in a busines or own 20 per cent or more of the shares in a company

• A contractor with income from two or more contracts

• Owner of a franchise

• Someone whose income includes dividends or a profit share from a company or limited liability partnership

If you have a job but are planning to go self-employed or become a full-time professional landlord, you are likely to lock yourself out of the mortgage market for at least two years until you have trading accounts that prove your financial status.

Although some people talk about self-employed buy to let mortgages, in the main the loan is no different from one offered to a salaried borrower.

The real difference is some lenders are more open to lending to the self-employed despite the extra job security risks the arrangement may carry.

Proving your self-employed income

Lenders will have their own checklists of documents that they want to see to prove your income for a self-employed buy to let loan.

The typical list will include:

• At least two to three years of accounts drafted by a qualified accounting professional

• Form SA302 or other confirmation of tax payments covering the same time period as the accounts from HM Revenue & Customs

• Business bank statements

• Contracts showing future work for contractors

• Evidence of dividends and other payments if you are a shareholder or director

You will also have to provide all the standard mortgage application documents such as:

• Photo identification to comply with money-laundering rules

• Up-to-date utility bills to prove your address

• At least six months of personal bank statements

Self-employed buy to let mortgage tips

As a self-employed borrower, as well as jumping through some of the extra hoops we’ve mentioned above, here are some of the additional steps self-employed landlords need to take:

• Expect to pay a deposit of at least 25 per cent of the property value and up to 40 per cent for the best interest rates

• How much you can borrow is based on the rent a property generates not your profits from self-employment. The lender will recommend the rent covers the mortgage payments by between 125 per cent and 145 per cent at rates between 3.6 per cent to circa 5.5 per cent. You may need a letter from an ARLA letting agent to certify this

However, some lenders will also have a minimum income threshold starting at £25,000 a year.

• A few lenders allow the self-employed to self-certify their income for a buy to let loan

• If you are a professional landlord renting out four or more properties, lenders have their own rules about the number of buy to let mortgages you can hold or the value of a portfolio, so it is important to do your research before making an application

Which lenders are the best for the self-employed?

Most high street and internet lenders have deals for the self-employed. If you are turned down, you might want to look for a specialist self-employed lender. The chance of a specialist accepting your application is probably higher, but you may pay a little more.

If you are a self-employed landlord or looking to invest in buy to let, , consider using a broker like Total Landlord Mortgages who can scout the market for a lender who best suits your borrowing needs and is specialised in rental property.

Many specialist self-employed lenders only accept self-employed applications packaged by brokers, while your bank or building society can only discuss their products and won’t inform you of deals available from other lenders.

Should I ask my business bank for a buy to let mortgage?

Two schools of thought apply to asking your business bank for a buy to let loan.

There is an argument that your bank already knows you as a customer and would look on your business and finances more favourably. But banks are hard-nosed businesses and must work to strict lending rules laid down by regulators whoever you are, so you are unlikely to receive favourable treatment.

In addition, you must remember a bank is only able to offer products that they have available, whereas at Total Landlord Mortgages we have access to over 50 of the market’s leading lenders as well as many challenger banks for the more complex deals.

The other point to consider is whether you want to put your eggs in one basket by tying your property and business together, so your lender has a complete picture of your finances.

It’s not a right or wrong decision, just something to bear in mind.

How has COVID-19 affected self-employed mortgages?

Mortgage lending is about balancing risk, and at the start of the pandemic, lenders were worried the self-employed would suffer financially and leave them holding a lot of debt. Especially in the buy to let market as many tenants may have fallen into rent arrears due to being made redundant or furloughed.

During the pandemic, lenders have taken action to reduce their risk of mortgage lending to the self-employed. Their responses include:

• Demanding higher cash deposits

• Not accepting COVID-19 grants as income

• Generally tightening affordability rules

“The good news is lending restrictions affecting the self-employed are easing even though we have seen an increase in the number of loans for the self-employed declined due to affordability issues,” says Daniel Lee (pictured), Principal at Hamilton Fraser Total Landlord Mortgages.

“The signs are self-employed mortgages are back on track and the service is getting better. For advice on the right financial solution for you and to request a mortgage quotation, contact us today on 0333 224 8918.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How to apply for a buy to let mortgage as a self-employed landlord | LandlordZONE.

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LATEST: More landlord victims of collapsed agency claim losses

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Two more landlords have come forward to try claiming back thousands of pounds owed to them by failed Midlands estate agent Homepoint.

Sucha Singh Bhatti and Linga Green weren’t told the company was going into voluntary liquidation and aren’t on the list of creditors, they told local paper the Express & Star.

Homepoint Estate Agents Ltd, which had branches in Wolverhampton, Walsall, Stourbridge and Birmingham, collapsed in February with debts of £1.3 million to more than 300 creditors including at least £700,000 in unprotected deposits and rent payments.

Formerly trading as Home Point and run by Sutton Coldfield businessman Ajit Singh Pooni, a new company called Point to Home, has since been set up by his wife.

Unpaid rent

Mr Bhatti, who owns a house converted into three flats in Goldthorn Park, Wolverhampton, says he first knew about Homepoint’s collapse when he went into the former company’s office in Walsall to chase up unpaid rent.

He had been sent a letter in January asking him to update some details with his bank, as the rent would be paid through a different account and was surprised when his bank told him a different company name was being used.

Mr Bhatti is owed £2,000 in rent and is concerned about a vulnerable tenant.

£2,500

Mrs Green, who owns rental properties in Brierley Hill and Lye, says she was also not informed about the company’s collapse and has now put in a claim for £2,500 in unpaid rent. She reports problems receiving her rent since Homepoint took over managing her property.

Trading standards officers in Dudley are now looking into how deposits paid by tenants to the value of £118,145 were not put into a government-backed scheme, or that rents totalling £459,553 were not passed to landlords.

Mr Pooni has been contacted for comment by the paper but has not responded.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: More landlord victims of collapsed agency claim losses | LandlordZONE.

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Landlord wins landmark £15k compensation after council issues wrong HMO advice

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Worcester City Council has been ordered to pay £15,000 in compensation after it gave a landlord the wrong advice about converting an HMO.

Mark James complained to the Local Government and Social Care Ombudsman that he had only bought the house in Comer Road (pictured) after council officers told him his plans would push the number of HMOs in the street to 8% – below their threshold – when it was actually more than 21%.

Mr James bought the property in June 2019 and submitted his planning application a month later, which was refused.

He appealed to the government’s planning inspectorate which backed Worcester Council and threw out an application to cover costs, saying it could not be shown that the council had behaved unreasonably.

The government inspector said the authority’s reasons for rejecting the plan were, “complete, precise, specific and relevant”.

The council apologised to Mr James for the error but refused to meet his costs of £26,000, maintaining it had only offered advice and that planning permission was not guaranteed.

Incorrect information

However, the ombudsman ruled in his favour and said: “The incorrect information Mr James received meant his property could not be used as a HMO as intended.

This is an injustice to Mr James.” He added: “Mr James has been put to additional time, trouble and inconvenience as a result of the error the council made.

“I also recognise the property he purchased cannot be used as intended, and I accept Mr James is unlikely to have purchased the property had he known this.”

The ombudsman did not order the council to cover the full costs though, ruling that the landlord could still sell or rent out the house, Worcester News reports.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord wins landmark £15k compensation after council issues wrong HMO advice | LandlordZONE.

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Step away from ‘disastrous’ rent controls campaign, landlords urge Sadiq Khan

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Landlords have heavily criticised London mayor Sadiq Khan’s latest ‘disastrous’ plans to introduce rent controls in the capital, claiming they would leave renters worse off.

Rent controls are one of the Labour mayor’s key policy proposals as he seeks re-election for a second term.

He has based them on his oft-repeated claim that rents in London are ‘out of control’ and ‘unaffordable’ and need controlling, a point of view supported by the Labour party.

But the National Residential Landlords Association (NRLA) says this claim is not based in fact. Its analysis of government data shows that rents in London have fallen by 9.6% since Khan took office in April 2016.

Even when inflation is stripped out, rents have still reduced by 5.1 over the pasts five years, the NRLA says.

These reductions have been driven in part by the Covid exodus from London among its key renting demographic – young first and second jobbers – around a fifth of whom have returned to their parents’ home to ride out the pandemic.

The NRLA says Khan’s fondness for rent controls is also a significant U-turn – the Labour government he was a member of until 2010 produced a report rejecting rent controls.

It looked at their effects from 1918 to 1988 (when they were abolished), revealing how they led to lower investment by landlords in properties and ‘inner city decay’.

Ben Beadle, Chief Executive of the NRLA, says: “Rent controls would be a disaster for London as the last Labour Government made crystal clear.

“They would mean tenants actually paying higher rents than leaving them to market forces.

“The story of rent controls wherever they have been introduced is that they exacerbate an already serious shortage of available homes.

“Rather than calling for things he cannot deliver, the Mayor should focus on using the powers he already has to boost the supply of available housing, including for private rent.”

Read more about rent controls.

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Rent controls make no sense with real terms costs falling in London

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Rent controls called for by Sadiq Khan would leave tenants across London worse off. Figures show that private rents have fallen every year in real terms throughout his time at City Hall and are now nearly 10% lower than five years ago when compared to the Retail Price Index.

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‘Rent controls like socialism are doomed to failure’ says leading economist

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A political economist has compared rent controls to socialism and insists they are always doomed to failure.

Sadiq Khan is determined to demand powers to implement a cap on rents in London if he wins the upcoming mayoral elections.

However, Dr Kristian Niemietz, head of political economy at the Institute of Economic Affairs, believes the capital would be wrong to introduce controls because, just like socialism, they have been tried dozens of times – and never work.

The Labour party has also vowed to put bad landlords out of business and promises a new “charter of renters” rights to put power back into the hands of tenants, with a rent cap linked to national inflation.

However, earlier this year, the Scottish government admitted that its similar Rent Pressure Zones had been a flop.

Dr Niemietz uses Berlin as the latest example of the system’s failure, telling City A.M: “After the introduction of a rent cap, the supply of rental properties coming on the market fell by almost half, at a time when it increased in comparable German cities. But, needless to say: the cap remains.”

Ben Beadle, chief executive of the National Residential Landlords Association, agrees that rent controls would be a disaster for London and warns that any move to control rent rises by linking them to inflation would leave tenants worse off.

He adds: “The story of rent controls wherever they have been introduced is that they exacerbate an already serious shortage of available homes. Rather than calling for things he cannot deliver, the mayor should focus on using the powers he already has to boost the supply of available housing, including for private rent.”

It says figures from the Office for National Statistics show rents in the capital have fallen by 9.6% between April 2016 (the month before Sadiq Khan came to office) and February 2021.

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