To all landlords who rent to sharers

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As most Property118 readers will be aware, properties where there are three or more occupiers forming more than one ‘household’ will be classed as an HMO.  Making landlords liable for extra regulation.

Properties, where there are five or more occupiers forming more than one household

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Tenants in East Midlands hit by highest rent increases

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UK private rental prices went up by 2.3% in the 12 months to February, representing the largest annual growth rate since December 2016.

The Index of Private Housing Rental Prices reveals that the East Midlands saw the highest growth (3.8%), while London saw the lowest (0.2%), which reflects a fall in demand caused by remote working shifting housing preferences, according to the Office of National Statistics (ONS). It also reflects an increase in supply as short-term lets have changed to long-term lets.

Regional rises

In England, prices grew by 2.1%, representing the highest 12-month growth rate since March 2017. When London is excluded, private rental prices increased by 3.1%, up from a rise of 3% in January, and the highest 12-month growth rate since the research began in 2006. Wales saw a 1.4% increase, in Scotland it was 2.6% and there was a 6.5% jump in Northern Ireland.

The ONS says growth in private rental prices paid by tenants in the UK had remained broadly flat between November 2019 and the end of 2020, while the start of 2021 saw a slowdown in rental price growth, which was driven by the market in London. Growth in private rental prices has increased since the latter part of 2021, with widespread annual growth across all regions, with the exception of the capital.

It adds that rental price increases recently reported by ARLA and supply challenges flagged up by the Royal Institution of Chartered Surveyors would take time to feed through to the index, which reflects price changes for all private rental properties rather than just newly advertised rental properties.

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Hostel landlord slapped with huge fine for shocking fire risks

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A Liverpool landlord has been handed a £20,000 fine for exposing vulnerable tenants to serious fire risks at their homeless hostel.

Step One (NW) Limited admitted five charges under the Management of Houses in Multiple Occupation (England) Regulations relating to Lower Breck House on Lower Breck Road, that houses a wide range of tenants, many of whom have suffered homelessness and substance abuse.

Anonymous tip-off

Liverpool Magistrates Court heard that after an anonymous tip-off, council officers discovered the HMO had 43 defective fire doors throughout the building, while the fire alarm sounders failed to meet the required decibel level, meaning that tenants might not have heard a fire alarm. Fire extinguishers also had out-of-date service records, some appearing to have had their last service as far back as 2016. Excessive use of intumescent foam exceeded the permitted amount while the cellar staircase was not adequately fire protected.

Liverpool Council told the court there had been a systemic failure to ensure the HMO was safe and adequately fire protected. District Judge Healey noted that the defects at the property had raised the risk of fire spread and fined the firm £20,000 plus costs of £4,747 and a victim surcharge of £190.

Shocking disregard

Councillor Sarah Doyle, cabinet member for strategic housing and regeneration, says the case reveals a shocking disregard for the safety of vulnerable tenants. She adds: “The landlord was taking rent for people to live in unsafe conditions and I dread to think what could have happened if a fire had broken out in the property.

“We are determined to take action against landlords if they put tenants at risk, which is why we are also about to launch a new landlord licensing scheme which will give us the tools to identify and tackle private rented properties as well as HMOs.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Hostel landlord slapped with huge fine for shocking fire risks | LandlordZONE.

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Oldham gives green light to phase one of pricier new licensing scheme

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Oldham Council is going ahead with its new selective licensing scheme across seven of the town’s wards despite widespread opposition from landlords.

The first phase launches in June, while a proposed second phase, potentially covering a further 12 wards, will be consulted on and would then need Secretary of State approval. Landlords now face a £91 price hike as the licence fee is £581 per property, up from the previous £490.

Concerns expressed

The town’s original five-year scheme, which covered eight areas, ended in 2020 when its consultation studying 10 wards was scuppered by the pandemic. Last year’s survey revealed that 97% of landlords thought there was no benefit to having a landlord licensing area and many expressed concerns that it was unclear what the previous scheme had achieved or believed there was no clear evidence of how the previous fees had been spent. The National Residential Landlords Association also objected to the scheme

Two-thirds of residents reported that they had had a problem with privately rented properties, particularly with anti-social behaviour and fly-tipping, however, residents mainly said that they had felt no impact of licensing. Both landlords and residents agreed that the scheme should be rolled out borough-wide (even nationally) or not at all.

Educating landlords

Councillor Hannah Roberts, cabinet member for housing, says the original scheme helped to drive up standards by imposing management conditions and educating landlords on their management responsibilities. She defended the council’s reasons for rolling out the scheme in stages, adding: “We felt it was extremely unlikely that the Secretary of State would approve a whole borough scheme, as he recently turned down Liverpool, while not all of the borough meets the requirements to be able to set up a scheme.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Oldham gives green light to phase one of pricier new licensing scheme | LandlordZONE.

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Multiple buyers are still fighting it out for their ideal home

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Estate agents expect competition among buyers to remain fierce all year, pushing property prices up even further.

Members of The Guild of Property Professionals report that any stock is selling rapidly and predict that until they get more houses on their books, prices will increase, albeit at a less frantic pace than in 2021.

Head of sales at Whites Estate Agents in Salisbury, Tony Williams, believes that the market will be strong all year. “Currently we are listing correctly priced properties, which will sell within a week with multiple viewers and mostly multiple offers,” he says. “We never list anything now without the term ‘guide price’. Fundamentally we have way too many people living in the UK for too few properties.”

Economic recovery

Based on the expected scale of interest rate increase, stock levels won’t rise any time soon, agrees James Millard, of James Millard Estate Agents in Kent, who adds: “If we see an end to the war in Ukraine, a continued economic recovery after Covid and renewed impetus in strengthening the UK economic position globally, post Brexit, people will gain confidence and there would be a whole new surge in activity.”

However, Melfyn Williams, of Williams & Goodwin and All Wales Auction, believes that 2022 could be the year the market calms down. “Most ‘booms’ and significant house price growth last about 18 months,” says Williams. “Any longer periods of sustained rapid growth usually end in misery, therefore a cooling now is to be expected and notwithstanding outside issues affecting the market, should provide a return to normality rather than a crash.”

Market appraisals

While most agents are experiencing constrained levels of stock, some have more listings coming to market, such as Roger Wilkinson, of Wilkinson Grant & Co in Exeter, who explains: “Judging by the vast numbers of market appraisals we have carried out in recent months, we predict a return to a ‘more normal’ market in quarter two and with it a slowdown in house price growth.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Multiple buyers are still fighting it out for their ideal home | LandlordZONE.

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DWP address for repayment?

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Hi, Does anyone have the Department for Work and Pensions (DWP) address for returning overpaid rental income?

I have seen a phone number advertised, but I would much rather write to them and then be able to transfer the overpayments via bacs bank transfer to ensure my repayment goes through and have a clear record of where it went.

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Association mourns the death of PRS stalwart John Stewart

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The National Residential Landlords Association (NRLA) is sad to confirm that its deputy director for policy and research, John Stewart, has died after being diagnosed with cancer.

Ben Beadle, chief executive of the NRLA, says during his time there, and before that with the Residential Landlords Association (RLA), John was a popular and valued friend, colleague and mentor who worked tirelessly for the organisation and its members with passion and conviction.

Sense of humour

“Known for his love of Eurovision and Kilmarnock FC, John was well respected within the industry for his knowledge and experience and was committed to creating a fair and well-functioning private rented sector for landlords and tenants alike,” says Beadle. “He will be missed by many. Whilst we mourn his loss, we fondly remember his sense of humour and the kindness and support he showed towards those he met and worked with. These continued to be his hallmarks, even as he faced his devastating diagnosis.

“Our heartfelt sympathies go to John’s husband, Neil, and his wider family and friends at this difficult time.”

Manchester Pride

John had held his post since the NRLA was established in 2020, and before that was policy manager for the RLA for almost six years. Prior to joining the RLA he served as chief executive of Manchester Pride, having been a councillor in Aberdeen for nine years, including almost two years as its leader.

John is pictured at the Future Renting Wales conference at Jury’s Inn, Cardiff, on 28^th November 2018. Photo by Mark Hawkins for the Residential Landlords Association.

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CMA free thousands more from doubling ground rents

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Fifteen businesses that had bought freeh­olds from housing developer Countryside have now given formal commitments, known as undertakings, to the Competition and Markets Authority (CMA) to remove terms that cause ground rents to double in price. These terms, which kick in every 10 or 15 years

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Clampdown on landlords exploiting vulnerable tenants in supported housing sector

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Unscrupulous landlords who provide poor quality supported accommodation are set to be kicked out of the sector.

Housing Minister Eddie Hughes has announced new minimum standards to prevent landlords from exploiting some of the most vulnerable tenants and to help them live independently. Local authorities in England will also get new powers to better manage their local supported housing market so rogue landlords can’t exploit the system, while there will be changes to Housing Benefit regulations to define care, support and supervision and improve quality and value for money.

Unregulated housing

Exempt accommodation is non-commissioned and unregulated supported housing where tenants include ex-prisoners, addicts, rough sleepers and fleeing survivors of domestic abuse. Landlords can apply for provider status, exempting them from local licensing regulations and housing benefit caps, meaning that councils have few powers to act over the quality and safety of homes or how tenants are treated.

Hughes has pledged to provide £20 million for a three-year Supported Housing Improvement Programme and said: “We have no intention of penalising those providers who operate responsibly. We are clear that measures must be as targeted and proportionate as possible to protect supply of housing across the board.”

Successful campaign

Birmingham has campaigned for stronger measures in the city for years, pointing to a lack of regulatory powers that has led to soaring numbers of properties, prompting complaints about anti-social behaviour, drug use and safeguarding issues. Councillor Sharon Thompson, cabinet member for vulnerable children and families, says: “I am absolutely delighted, that after years of campaigning, the government has finally listened. I would like to thank our local communities that have been working with us on this campaign and have suffered on a daily basis, for many years, at the hands of rogue landlords and poorly managed properties.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Clampdown on landlords exploiting vulnerable tenants in supported housing sector | LandlordZONE.

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Landlords urged to help improve the property tax system  

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The Office of Tax Simplification (OTS) has invited landlords to share their views on how to simplify property income taxation.

It has published an online survey and call for evidence and wants to hear directly from individual landlords and small businesses about which aspects are particularly complex and hard to get right, and welcomes any suggestions for improvements. It is looking into the current regimes for taxing residential property held by individuals, partnerships and micro companies, and will come up with recommendations and ways to address distortions.

Call for evidence

The call for evidence wants detailed comments on the technical and practical operation of the tax system while the OTS will also meet interested parties online. Questions in the survey include: what prompts landlords to incorporate their property rental businesses and to what extent such decisions are motivated by tax or non-tax reasons, and what factors influence the choice between using the cash basis and accruals basis accounting, where rental income is less than £150,000 a year.

HMRC statistics suggest that there were about 2.9m individuals and 32,000 partnerships with property businesses filing tax returns in the 2018-19 tax year. Companies are subject to corporation tax on their profits from renting property and have no restrictions on the amount of mortgage interest they can deduct.

International landlords

In 2020, a record number of UK and international landlords registered as a limited company to take advantage of tax benefits; investment specialist Thirlmere Deacon reported a total of 41,700 buy-to-let incorporations, an increase of 23% on 2019, taking the total number of buy-to-let firms to 228,743.

Landlords can respond to the survey here – https://www.smartsurvey.co.uk/s/0WQWWF/ – and email responses to the call for evidence to ots@ots.gov.uk before 5th June.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords urged to help improve the property tax system   | LandlordZONE.

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