Directors of dodgy property investment firm face probe after £800k goes missing

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A construction firm that fraudulently took over a million pounds from property investment hopefuls after offering fixed returns of 9.12% for three-year bonds and 10.35% on five-year bonds has been wound up by the High Court. Its directors also now face an official investigation over their conduct.

North London-based Exmount Construction Limited was registered with Companies House in 2013 and currently has a single active director listed, with a further five listed as having resigned. Its registered offices are within a secretive compound in North Finchley (pictured)

The Insolvency Service says victims of the company’s so-called investment schemes collectively handed over £1.1 million between March 2018 and July 2019 but after the money was deposited, they were unable to contact anyone at the company.

Missing money

An investigation by the Insolvency Service found no record of any money being used for actual property investments and approximately £800,000 was withdrawn by the company directors, or paid to other third parties.

During the investigation directors of the company refused to cooperate with officials and did not contest the winding-up petition.

Judge Briggs, speaking during the winding-up hearing, concluded the company “had traded in an objectionable manner”.

Edna Okhiria, Chief Investigator at The Insolvency Service, says: “Exmount Construction Limited induced investors by providing false and misleading statements in sales and marketing material to part with substantial sums of money to invest in property bonds with the promise of generous returns.

“In reality, this was a scam and we urge potential investors to carry out rigorous due diligence to ensure they use their funds on legitimate investments.”

The Official Receiver will now consider whether to take action against the directors in relation to their conduct and management of the company.

Read more about investment scams.

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New energy efficiency and electrical rules ‘too complex for landlords to understand’

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Peers have criticised updated energy efficiency legislation as being too difficult for homeowners and landlords to understand.

The Building Regulations (Amendment) (England) Regulations 2021 make changes to provide a “meaningful and achievable” increase to the energy efficiency standards for buildings.

These include a new way of measuring energy efficiency, changes in the regulation of on-site electricity generation to ensure it is appropriately installed, changes to address the risk of overheating in new residential buildings and provisions in relation to ventilation standards in new and existing buildings where building work is being carried out.

But the House of Lords’ secondary legislation scrutiny committee complained that the explanatory memorandum that goes with it, “assumes an extensive understanding of the current building regulations and how they are being developed and does not provide a proper stand-alone explanation of the full effects of the instrument or how the changes are expected to operate”. 

Complex and technical

Peers were forced to get extra information from the Department for Levelling Up, Housing and Communities, and felt strongly that members of the public should not have to consult other sources of information, especially when the subject was so complex and technical.

They have urged the department to revise the memorandum.  

Committee member Lord German says: “For an explanatory memorandum to fulfil its purpose, it must provide Parliament, those affected by changes in the law and the wider public with a clear and accessible, stand-alone explanation of the effect of an instrument and how it is intended to operate. 

The Building Regulations (Amendment) 2021 fail on this point and need to be revised accordingly.” The new building regulations take effect on 15th June.

Read the Lords report in full.

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REVEALED: Identities of landlord and tenant in shocking illegal eviction case

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A rogue landlord who chucked his tenant onto the street and threw out his belongings has been handed a suspended prison sentence.

Nur Miah Choudhury, from Bridgwater in Somerset, illegally locked out Ponciano Da Silva from the property in St Johns Street (pictured) while the tenant was working a night shift.

Mr Da Silva returned home early in the morning to find himself homeless.

Taunton Magistrates Court heard that the tenant had regularly paid rent and had believed he would get a month’s notice – which was in itself unlawful given the provisions of the Coronavirus Act to extend protection.

He had lost all his possessions during the eviction, many of which were personal and irreplaceable.

Choudhury had been told by Sedgemoor District Council’s housing team that he must abide by the law before the eviction and, by his own admission, had chosen not to do so.

Serious offence

Magistrates said that while they accepted the landlord had been ill, was of previous good character and ashamed of his actions, it was a very serious offence.

Choudhury was given a six months’ prison sentence (suspended for 12 months) and ordered to pay £3,000 in compensation to his tenant, along with costs of £250.

A council spokesman says: “The majority of landlords are very willing to work with the council and are compliant with their obligations to their tenants. However, the council will continue to crack down on landlords who not complying with the housing legislation which is in place to protect tenants.” 

Image credit: Google

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Will HMRC digital tax scheme not be fit for purpose as trial proves unpopular?

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Fears have been raised that landlords’ needs won’t be properly served by the new digital tax system for self-employed people due in 2024 after it was revealed that only nine people are taking part in the pilot.

HMRC admitted a sharp decline in the uptake of volunteers to test the new software since the trial began three years ago when 900 people signed up to take part, leading to concerns that the system might not be robust, reports the Financial Times.

Making Tax Digital for Income Tax will be used by 4.3m self-employed people from April 2024. Under the new system, about a third of taxpayers who are self-assessed and have either income from a business or property exceeding £10,000 per year will have to keep digital records of their earnings and expenses.

These will have to be filed to HMRC every quarter, using third-party software, instead of submitting an annual tax return.

Software providers and tax professionals said several factors were making it difficult to attract volunteers to join the pilot, including HMRC’s decision to limit it to volunteers who only have property or trading income.

Tax changes

Anish Mehta, managing partner at APARI, one of HMRC’s approved software providers for the new system, says landlords are often on the receiving end of tax changes.

“We want the MTD changes to be designed for landlords,” Mehta tells LandlordZONE. “Our concern with limited testing is that HMRC won’t understand what landlords need. For example, many landlords have other sources of income.”

However, he adds that most of the limited testing has been done by APARI users. “We’re very confident in our solution. One feature of MTD is that employment or pension income information can be pre-populated into APARI by HMRC.” 

HMRC said it had always planned to keep the initial numbers in the pilot low so it could “provide additional support to the first customers in the service before testing at scale”. It added that it planned to open up the trial to more people from April.

Listen to our recent webinar on the MTD initiative.

Read more about the MTD deadlines.

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OFFICIAL: Ending of ‘Plan B’ Covid restrictions removes threat of another evictions ban

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Housing Minister Eddie Hughes has revealed that the government is not considering introducing more evictions restrictions, but warns landlords in England that longer notice periods might be brought in up until 25^th March. 

In a written question, Lilian Greenwood MP asked Hughes if the Levelling Up, Housing and Communities Department had considered the potential merits of reinstating measures to have court eviction proceedings stayed and extending the minimum notice period for section 21 evictions from two to four months ‘while tenants and advice services were still being affected by the spread of the omicron variant’.

Hughes said while the measures the government had taken at the start of the pandemic to help renters stay in their homes had worked – with fewer rough sleepers and possession claims being made – it continued to monitor the situation using public health and homelessness data, along with repossession statistics.

No plans

“There are no current plans to reintroduce the emergency measures to delay evictions given the wider lifting of national restrictions, the success of the vaccination roll-out and the impact that these measures have on landlords,” said Hughes.

“Bailiffs must, however, provide at least 14 days’ notice of an eviction and will not carry out an eviction if they are made aware that anyone living in the property has COVID-19 or is self-isolating.”

He added: “We have also retained the power to reintroduce longer notice periods until 25^th March 2022 if needed and significant support is available to renters through the welfare system.”

Read more about the evictions ban.

Learn more about the evictions process.

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LATEST: Successful year ahead for buy to let borrowers

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The year 2022 is expected to be another successful year for buy to let mortgages as tens of thousands of fixed-rate mortgages are due for renewal. Our mortgage partner, Hamilton Fraser Total Landlord Mortgages, explains.

Lenders are rubbing their hands with glee as fixed-rate terms for mortgages written between December 2016 and January 2018 will expire this year and landlords start hunting for a new rate. The mortgage market is expected to become even more competitive as landlords try to find new deals to keep their repayments low whilst the Bank of England increase interest rates to fend off rising inflation.

The Bank of England increased the official interest rate to 2.5 per cent last month (from 2.35 per cent). This is the highest rate since March 2020 when the rate plunged from 0.75 per cent down to just 0.1 per cent.

The hike seems to have had little effect on buy to let mortgages, with the average deal floating around a 1.68 per cent interest rate mark according to figures from mortgage monitor, Property Masters. However, with inflation expected to keep rising in the short term, lenders anticipate that mortgage rates will float up with them.

Call Total Landlord Mortgages today on 0333 224 8918 or request a call back to speak to one of our fully regulated advisors and secure the best deal.

Buy to let by numbers: January 2022

A snapshot of the buy to let mortgage market this week shows:

• 1,976 mortgages available
• 100 high loan-to-rate deals at 80 per cent loan-to-value
• 688 loans at 75 per cent loan-to-value
• 322 mortgages at 60 per cent loan-to-value

Interest rates vary, mainly depending on the loan-to-value borrowed, but how does this compare to 2021?

Interestingly, some lenders have already tweaked their products since the interest rate hike, for example:

• Paragon has cut rates
• Metro Bank has increased maximum loan amounts
• Accord have scrapped the minimum income levels

To take advantage of the best offers at the moment, call Total Landlord Mortgages today on 0333 224 8918 or request a call back here.

Pandemic brings mixed fortunes

The pandemic has brought mixed fortunes for landlords enjoying higher rents but hit by the rising joblessness among tenants.

The loss of income has resulted in around 840,000 tenants falling into rent arrears, with one in five owing £1,000 or more, says the National Residential Landlords Association.

At the same time London prestige property consultants, Hampton International, report buy to let rents were up an average of 4.1 per cent across the UK to £1,035 a month, an increase of £41 a month.

The firm also revealed the number of tenants seeking to rent broke through 2019 levels for the first time since the start of the pandemic.

Looking at the wider property market, the number of homes for sale is 43 per cent below the five-year rolling average, while tenant demand is 55 per cent higher. Each letting agent branch has 82 tenants signed up and chasing a new home, according to data from trade body the Association of Residential Letting Agents (ARLA) released in November 2021.

This number is highest in the East Midlands (134 tenants) and lowest in Wales (26 tenants).

Call Total Landlord Mortgages today on 0333 224 8918 or request a call back here.

What to expect in 2022

Total Landlord Mortgages is upbeat about the year to come.

“This year, we expect to see more landlords assessing their portfolios with the fear of further interest rate rises ahead or the increase in inflation. The five-year fixed-rate mortgage is still incredibly attractive, and this may trigger more landlords to lock in low rates now whilst they are available,” said Dan Lee, principal at Total Landlord Mortgages (pictured).

“We also expect additional products linked to greener properties, such as demanding an Energy Performance Certificate (EPC) ranking of A-C, so reviewing your current mortgage and raising finance to fund any changes needed may be a good option.”

Lastly, mortgage rates and inflation are not the only things going up in the property world. The good news is many landlords can borrow more as their equity has increased in line with house prices over the past year. The latest figures from Halifax show the average house value in the UK reached a new high in December 2021 of £276,091.

Call Total Landlord Mortgages today on 0333 224 8918 or request a call back here

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Buy to Let (BTL) VS Property Development

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Should you invest in Buy to Let (BTL) or property development as your property investment strategy?

This video has the answer.

Not only will I go through the advantages and disadvantages of Buy-To-Let and UK Property Development

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Letting agent closed their office?

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Hi – my letting and managing agent closed their local office and made the staff redundant, without informing me, or other landlords and tenants.

They tried to keep it secret, by re-routing phone calls and emails and saying the local manager was away

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30,000 strong list of Buy-to-Let and portfolio buyers is growing at a record rate

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This last year has been an incredible one for Landlord Sales Agency. From entering the market as the top landlord portfolio exit specialists to delivering on our promises to Property118 landlords to sell their entire portfolios, we’ve seen success stories time after time.

View Full Article: 30,000 strong list of Buy-to-Let and portfolio buyers is growing at a record rate

BREAKING: wrong time to raise taxes, but I’m going after buy-to-let landlords anyway…

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In an apparent re-run of Harold Wilson’s 1970s investment income tax surcharge, Labour plan to re-introduce such an additional layer of tax to what is termed “unearned income”.

The Wilson Labour government applied an investment income surcharge of 15% and kept the top rate on investment income at 90%. In 1974 the cut was partly reversed and the top rate on earned income was raised to 83%. With the investment income surcharge this raised the top rate on investment income to 98%, the highest permanent rate of tax ever applied in the UK.

In a speech in Lincoln on 18 February 1974, Dennis Healey, the then chancellor promised he would “squeeze property speculators until the pips squeak.” However, he later denied having used the phrase, whether as Shadow Chancellor of the Exchequer, from 1972 to 1974, or as Chancellor of the Exchequer, from 1974 to 1979, saying the Times newspaper may have misquoted him.

Proof of the pudding: it wasn’t long after (1976) Britain faced its worst ever financial crisis. The Labour government was forced to apply to the International Monetary Fund (IMF) to bail it out. An IMF loan was granted but the fund insisted on deep cuts in public expenditure, greatly affecting economic and social policy.

New tax on buy to let

Rachel Reeves yesterday said she would apply the extra layer of tax on buy-to-let and other investment income such as stocks and shares, but admitted ‘Now is the wrong time to raise taxes’

While criticising Boris Johnson for presiding over a “triple whammy” of tax rises, including an increase in National Insurance contributions, a freeze to income tax thresholds and higher council tax, she nevertheless proposed her own tax hike.

Speaking in Bury, Greater Manchester Ms Reeves was with Christian Wakeford the Tory MP who defected to Labour this week. Ms Reeves cited the increased pressure on families as energy prices increase and Britain heads for a cost of living crisis as the reason behind her bombshell revelation for landlords.

In another interview yesterday Ms Reeves said Labour would keep the NHS and social care dividend that the Tory Government plans, to be paid for by increasing National Insurance.

She said that to pay for the NHS dividend, instead Labour would increase taxes on buy-to-let properties and those who earn money from investments.

The tax will hit the elderly hardest

This new tax would have the effect of hitting elderly voters, those who, faced with zero returns on cash deposits, have have put their savings into property or the stock market.

A recent report from the University of York and the Nationwide Foundation found that a substantial number of “baby boomer” landlords were now “ageing out” of the rental market, and they are not being replaced at the same rate by younger landlords due to diminished returns and more stringent regulation.

This could mean that there are not enough rental homes to go around in future, especially for those tenants on lower incomes and who receive benefits. Another tax hike would simply accelerate this process further.

Ms Reeves went on:

“We’ve said that it’s not right that the only people who are being asked to contribute to the health and social care levy are those people who go out and work every day and the people who employ them. If you get your income from stocks and shares and dividends or a portfolio of buy-to-let properties, then you pay no additional tax whatsoever in this health and social care levy,” she stated.

However, according to research by the London School of Economics, buy-to-let landlords are most likely to be white collar professionals, 12 per cent of buy-to-let landlords are blue collar workers, while seven per cent are retired and use their property income as a pension. Young couples now make up 35 per cent of buy-to-let landlords in the UK.

The Laffer effect

History has shown that raising taxes too much discourages enterprise and puts a damper on economic growth. The Laffer effect takes its name from economist Arthur Laffer who developed the inverted “U” “Laffer Curve”, based on the economic principle that people will adjust their behaviour in the face of the incentives created by tax rates.

Higher taxes decrease the incentive to work and invest, compared to lower rates. If this effect is large enough, it means that at some point further increases in the rate will actually lead to a decrease in total tax revenue for the Treasury. For every type of tax there is a threshold rate above which the incentive to produce more diminishes, thereby reducing the amount of revenue the government receives.

Landlords already selling-up

With a desperate shortage of rental accommodation at reasonable prices, landlords are already selling up in large numbers as they feel the pain of existing taxes and government regulations. Another 15% of extra tax on top and the number of private rental homes for rent in Britain could drop dramatically.

According to the Nottingham Building Society almost a million landlords, more than a third of the total, will review their property portfolios this year, with the number planning to sell homes already outnumbering those planning to buy new ones. In some popular parts of the country a severe lack of rental homes has recently led to bidding wars.

Ms Reeves’ plan may well reduce the National Insurance the average worker pays, but if they don’t have a roof over their heads, they are likely to be far worse off.

Treasury sources told The Daily Telegraph that raising the required £12 billion for the national health and social care levy could only be achieved by increasing either NICs or income tax.

Ms Reeves replied to this by saying:

“Well, there’s lots of papers out there from different organisations that show you could do exactly that. We will set out our plans ahead of a general election, but it’s not right just to ask those people who go out to work for a living to pay higher taxes, especially at a time when the prices of everything are going up.”

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