HMO rooms rated as Band A?

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After having gained planning permission we recently carried out a renovation of a large house into a 7 bedroom HMO with all the rooms benefitting from their own en-suite, but still having to share kitchen and lounge facilities, and all services of electric

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LATEST: Rent arrears recede amid improving economic confidence

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Just 6% of tenants are worried about the pandemic affecting their ability to pay rent, according to a new survey.

The Goodlord and Vouch State of the Lettings Industry report polled 1,750 tenants as well as 550 letting agents, who are also feeling confident about renters’ ability to keep up with payments; the number recording an increase in arrears during the past year has halved from 64% to 32%, with 14% of agents reporting a fall in arrears. 

Despite legislation, lockdowns and changing consumer behaviours keeping the market in a near-constant state of flux, both agent and tenant optimism is high.

But the report also reveals that a lack of stock is a major concern for agents, with almost half of those surveyed saying at least 5% of their landlords have left the sector during the last 12 months, while 64% predict the landlord exodus will only get worse. 

The annual study, which takes the temperature of the lettings market, is published in full next week and will also reveal industry opinion on upcoming regulatory changes, the impact technology is having on workforce numbers, and the proportion of agents who have unlocked new revenue streams. 

Tom Mundy (pictured), COO at Goodlord, says the insights indicate that most renters are feeling financially secure while agents aren’t encountering the escalating levels of arrears seen a year ago.

He adds: “This is borne out by the latest statistics from our monthly rental indices, with rents heading up and voids dropping during 2021. Key challenges do remain, with lack of stock clearly a huge area of concern for most agents.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Rent arrears recede amid improving economic confidence | LandlordZONE.

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Mortgage update: Lenders slash rates in mortgage wars

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Nationwide has unleashed the building society’s lowest ever mortgage fixed and tracker rates in a bid to grab market share from rival lenders.

Our mortgage partner, Hamilton Fraser Total Landlord Mortgages, reports on the latest mortgage rates and what this might mean for landlords.

Interest rates have dropped by 0.4 per cent – with the lowest dipping to 0.87 per cent for a two-year fixed-rate new mortgage or remortgage at 60 per cent loan-to-value with a £1,499 fee.

“Introducing sub-one per cent loans is a sign the mortgage market is becoming increasingly competitive and that more sub-one per cent deals will follow shortly from other lenders.” said Daniel Lee, Principal at Total Landlord Mortgages.

A typical borrower with a repayment mortgage of £200,000 over a 25-year term will pay £748 a month if the fee is added to the loan.

Other lenders with rates under one per cent include Barclays, NatWest and Royal Bank of Scotland.

Can landlords rent their property to family or friends?

Barely a week passes without a worried mum or dad speaking to us at Total Landlord Mortgages about renting a home to a child struggling to climb onto the property ladder.

Mortgage lenders have a strict rule about landlords renting buy to let property to family or friends. And often the terms of the loan bar letting to relatives.

But a lender has now stepped forward with the ideal solution – a family let mortgage at up to 75 per cent loan-to-value as a two or three-year fix. The deal has a 125 per cent stress test at 5.5 per cent and a tenancy agreement to complete.

“I know how much heartache this causes for families,” said Daniel Lee, Total Landlord Mortgages Principal, “I am thrilled that at Total Landlord Mortgages we can offer some help for families during these difficult times.”

Are you interested in finding out more about the new family let mortgage? Call Total Landlord Mortgages today on 0333 224 8918 to discuss your mortgage requirements or request a call back here.

Is it time for a buy to let mortgage review?

With mortgage interest rates at an all time low and new products continuously hitting the market, now is as good a time as any to review your buy to let borrowing.

Here at Total Landlord Mortgages, we have two great buy to let deals for landlords:

Deal 1

• For remortgaging a rental property
• 1.1 per cent two-year fixed rate
• Free legals
• Free valuation

Deal 2

• For remortgaging a rental property
• 1.59 per cent five-year fixed rate
• Free legals
• Free valuation

And what’s more, as a LandlordZONE reader or Hamilton Fraser customer you can get an exclusive discounted broker fee of just £250, this is a saving of 50 per cent! Call us today on 0333 224 8918 to discuss your requirements.

“With inflation rising and uncertainty on the horizon, I would urge landlords to seriously consider five-year fixed rates, especially if they have no intention of selling the property. With five-year rates as low as 1.59 per cent, it is almost too good an opportunity to miss.” said Daniel Lee, Principal at Total Landlord Mortgages.

Does your flat need an EWS1 fire safety check?

Relief is at hand for thousands of landlords trapped from selling or remortgaging apartments due to concerns about fire safety in blocks of flats following the Grenfell tragedy in June 2017.

The Government has scrapped the checks for blocks under 18 metres high following a review by a panel of independent experts. The experts confirmed cladding on the blocks did not present a high fire risk.

The decision opens the way for landlords to sell or refinance their apartments while freeing them from the cost of expensive remedial works.

But this isn’t all good news for landlords as in some cases, mortgage lenders are ignoring the guidelines and still asking for the EWS1 checks to be completed. EWS1 is the form that lets landlords know how safe the cladding is around blocks of flats.

One of Britain’s biggest lenders, Halifax, requires an EWS1 for any block with fire safety concerns raised by a surveyor.

“If we have received an EWS1 form for a building and the form states the cladding needs remediating before it is safe, we would not be able to lend on this property, and there is no appeals process. Only if a further EWS1 form was received to confirm remediation has been completed would we be able to proceed,” says a spokesperson from Halifax.

Other lenders, like HSBC and the Coventry Building Society, still require an EWS1 until the Government has withdrawn advice recommending fire safety checks on all blocks of flats.

The EWS1 check is part of an apartment’s valuation. The form covers a block of flats in England and Wales, but each apartment in a block needs a check in Scotland.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Mortgage update: Lenders slash rates in mortgage wars | LandlordZONE.

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LATEST: Universal Credit rent payments to come ‘with strings’ for landlords under Labour

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Labour’s shadow housing minister Lucy Powell (pictured) has warned private landlords that her party would put them under greater scrutiny to ensure their properties are up to scratch should her party win power at the next election.

Speaking at the Chartered Institute of Housing conference in Manchester, Powell said landlords who housed housing benefit claimants should not simply be given rental income “with no strings attached”, adding that the Labour Party was considering action to address this.

“On housing benefits, we spend a huge amount every year, most of which goes to the private rented sector, and we ask nothing in return from that money,” she said.

“We are going to be looking at tenants in the private rental sector. There is a lot more we can do about landlord licensing and landlord registration schemes.”

Powell, who took over as shadow housing secretary from Thangam Debbonaire earlier this year, is in favour of secure tenancies for life and creating more powers over HMOs and told the Commons in her first speech in the post that the government’s housing policies had failed.

“Now, more people are living in expensive poor-quality rented housing, subsidised by a soaring housing benefit bill,” said Powell.

Landlords’ reaction

A spokesperson for the National Residential Landlords Association says all private rented housing should be safe for tenants and meet all legally required standards, irrespective of whether a tenant is in receipt of benefits.

He tells LandlordZONE: “The fact remains that councils are struggling to make use of the wide range of powers they already have to tackle the minority of landlords who provide sub-standard housing and tarnish the reputation of the majority of responsible landlords.

“The key is enforcement. Simply coming up with new ways of developing lists of landlords does nothing to find those criminal landlords who will never come forward to make themselves known.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Universal Credit rent payments to come ‘with strings’ for landlords under Labour | LandlordZONE.

View Full Article: LATEST: Universal Credit rent payments to come ‘with strings’ for landlords under Labour

The Needle In The Haystack

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Finding the solution to your Landlord Tax problem by reading the HMRC manuals can be linked finding a needle in a haystack and then threading that needle.

You might seek advice from your Accountants, but most are General Practitioners in Tax.

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MY STORY: Landlord reveals reality of applying for Green Homes Grant vouchers

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A LandlordZONE reader has spoken of his frustration at the protracted application process for a Green Homes Grant voucher which resulted in him missing the deadline to get work done.

If follows criticism of the government’s handling of the scheme by spending watchdog the National Audit Office, which says it was delivered to an over-ambitious timetable and was not executed to an acceptable standard.

The scheme handed out grants to use approved tradespeople to make energy efficient improvements but has now closed.

Max, who does not want to give his full name, is a landlord with 20 properties in Cornwall. He was eager to use the scheme as he hoped to fit an air source heat pump in a three-bedroom semi-detached house in a village without gas where it has to use electric storage heaters.

While Max has already forked out for solar panels and cavity wall insulation, the house is still only in EPC band D.

After getting quotations last November, he put in an application for the £5,000 grant before the 31^st March deadline.

Problematic

But the process was immediately problematic, he tells LandlordZONE.

“They asked for proof of ID but then couldn’t verify it, they wouldn’t use a credit card bill to check my address, and then lost the information I sent. I repeatedly had to appeal to reopen the application.”

The scheme then asked him for a detailed breakdown of costs and wanted the contractor to provide more information who, by this time, had told Max that he couldn’t meet the November installation deadline.

“It left me no time to find another contractor,” he says. “If the scheme had looked at the whole application and listed all the information they wanted, it could have resolved the issues before running out of time. I must have spent days trying to sort it out.”

Max is now unsure whether he will bother applying to any replacement scheme and is considering offloading a number of other properties that won’t reach EPC band C.

Read more: Handling of Green Homes Grant voucher scheme slammed by watchdog

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – MY STORY: Landlord reveals reality of applying for Green Homes Grant vouchers | LandlordZONE.

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Property Tax Pains For Landlords!

admin    Uncategorized     agents

It’s a painful time for Property Landlords, as many Landlords face a massive, painful property tax bill. Are you one of these Landlords?

Well, here’s what you can do about it by incorporating your portfolio.

Today I’m joined by Mark Alexander from Property 118 as we discuss all things painful with property tax.

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Tenant demand accelerating and outstripping falling landlord supply

admin    Uncategorized     agents

Tenant demand for homes to rent accelerated in August, with a net balance of +66% reporting a pick-up in enquires (up from the +58% in the previous month). However, a continuing decline in landlord instructions fuelled expectations among survey respondents (net balance of +64%) that rents will go up over the next three months given this imbalance between supply and demand

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Using the previous landlord’s escrow account?

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I purchased a property with a sitting tenant. The vendor (previous landlord) set up an escrow account as insurance against rent arrears. For various reasons I decided to give the tenant the benefit of the doubt as I was aware of some issues that were in the process of being resolved.

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LATEST: Landlords’ rental income dodges PM’s tax raise

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Landlords won’t lose out under the new health and social care levy announced by Boris Johnson unless they have incorporated their business and pay themselves dividends.

Employees, employers and the self-employed will pay 1.25% more tax in the form of National Insurance from April 2022, while dividend tax will also increase by 1.25% to pay for the rising cost of social care.

Tim Stovold, head of tax at accountant Moore Kingston Smith, says that by limiting the National Insurance increases to earned income and the equivalent on dividends, rental income has escaped unscathed. 

He told FT Advisor: “Although there are already limitations for landlords on deductions for mortgage interest and the additional 3% stamp duty land tax charge for second properties, there is no additional attack on their rental profits.”

However, landlords who chose to incorporate their portfolios into a company will be caught out, Stovold adds, because their rental income becomes a dividend.

Other tax advisors warn that the proposal will hit directors of limited companies who didn’t get any financial support during the pandemic and face seeing their income hit again just as the recovery is starting to take effect.

In the Commons debate on the new levy, Keir Starmer (pictured) criticised the government’s plans – singling out large landlords as particular beneficiaries.

He said: “It is a tax rise on young people, supermarket workers and nurses; a tax rise that means that a landlord renting out dozens of properties will not pay a penny more, but the tenants working in full-time jobs will.”

The Labour leader added: “We do need to ask those with the broadest shoulders to pay more, and that includes asking much more of wealthier people, including in respect of income from stocks, shares, dividends and property.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Landlords’ rental income dodges PM’s tax raise | LandlordZONE.

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