New law sets ground rent to zero for prospective homeowners

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Landlords will be banned from charging ground rent to future leaseholders in England and Wales from 30^th June.

Under the Leasehold Reform (Ground Rent) Act, anyone buying a home on a new long lease will be freed from these annual costs which can sometimes add up to hundreds of pounds, yet provide no clear service in return and can be set to escalate regularly, according to the government.

Upcoming changes

It says many landlords have already reduced ground rent to zero for homebuyers starting a new lease with them but that anyone preparing to sign a new lease in the next two months should speak to their landlord to ensure their ground rent rate reflects the upcoming changes.

Leasehold Minister Lord Stephen Greenhalgh adds: “I welcome the move from many landlords who have already set ground rent on their new leases to zero and I urge others to follow suit ahead of this becoming law.”

Online calculator

Measures already announced in 2021 include a new right for leaseholders to extend their leases to 990 years at zero ground rent and an online calculator to help them find out how much it would cost to buy their freehold or extend their lease. In a government crackdown, the Competition Market Authority also secured commitments with major homebuilders to stop them doubling ground charges every year for leaseholders.

Timothy Douglas, policy and campaigns manager for Propertymark, says the unfair and restrictive charges levied on leasehold homeowners have, in some cases, been allowed to become a cash-cow and that abolishing them has been a long time coming. He adds: “These changes only legally restrict ground rents on new leases, so we hope they are a catalyst for further reform by the housebuilding sector itself and the UK government that will release the estimated over one million existing homeowners who remain locked into these agreements.”

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Airbnb backs steps to end ‘no fault’ evictions and speed up register study

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Airbnb has called for an end to Section 21 evictions to stop landlords forcing tenants out of properties and then turning them into short-term holiday lets.

The platform says it backs moves to strengthen protection for renters and is committed to investigating cases where a tenant has been unfairly evicted from their property which is subsequently listed on Airbnb.

Landlords removed

Amanda Cupples, Airbnb’s general manager for Northern Europe, says ending ‘no fault’ evictions would ensure long-term housing is protected for communities and help the website better police the sector. It already removes landlords from its platform if tenants have been unlawfully evicted.

Cupples says the firm was also ready to administer tourist taxes as a way to help local residents better benefit from living in a tourism hotspot and had already collected £3 billion in ‘tourism taxes’ around the world. “Where there is clear support for such a measure to be introduced in the community, Airbnb can share its experience in working with authorities to streamline the process here in the UK too.”

Available properties

The short-term lettings sector has been criticised for contributing to a sharp drop in the number of rental properties available for local people as landlords switch from longer tenancies; Devon has seen a staggering 70% drop in private rented properties over the last two years. Earlier this year, the government announced that from April 2023, second homeowners would have to pay council tax and stop accessing small business rates relief if they can’t prove that their properties are genuine holiday lets.

Airbnb has also called for the government to speed up its timetable for delivering on its commitment to consult on a national register for the sector. She adds: “Since last year, we have led calls on short-term lets rules being introduced and now, alongside communities in some parts of the UK, we are keen to see the government turn talk into action.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Airbnb backs steps to end ‘no fault’ evictions and speed up register study | LandlordZONE.

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How to get the new tax year off to a good start!

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It feels like it’s only been a minute since we were submitting our 20/21 tax returns, but already the new tax year is here! Which not only means there are a couple of new rules and regulations to look out for,  but it’s also time to prepare the 21/22 tax return!

So here’s our breakdown of how to get the new year off to a good start! 

1. File as early as possible

The first thing, and it’s a pretty big one – Just because you don’t have to submit your 2021/22  tax return until the end of January, doesn’t mean that you should forget about it until then! 

Not to call anybody out – we’re all guilty of not necessarily being overly proactive when it comes to our tax returns, and we’re under no illusions that it’s not your favourite task in the world, but the quicker you get on top of your tax return, then the quicker you will be aware of your liability and any plans you may need to put in place around that. Also HMRC’s phone lines get even busier around tax return filing season, so if you have any questions for the revenue, then its best to contact them sooner rather than later!

Filing early is an ever growing trend, with HMRC seeing more than 63,000 people filing their tax 20/21 return on the 6th April 2021, and 934,501 by the 17th May 2021. 

Tax isn’t always bad news either – for those of you lucky enough to receive a tax refund for the year, the earlier you file, then the earlier you will get your refund! 

2. Get a good filing system in place ready for MTD 

We couldn’t really talk about the new tax year without mentioning MTD, could we?! 

Although this isn’t strictly an MTD specific point – a good filing system and method will ensure that when you are putting together your tax return, the process should be relatively pain free. 

And with Making Tax Digital for Income Tax edging ever closer, it really is a good time to consider using a software to keep your records – by starting at the beginning of the tax year, you will have a full years records under your belt by the time it comes to your next tax return – and once MTD becomes a legal requirement, you will already be a digital record keeping pro! 

If you’re still looking for the right MTD software for you, why dont you check out our MTD ITSA ready package here 

3. Update yourself on new tax rates and rules 

Tax rates and brackets change on a near annual basis, so keeping yourself up to date for the current tax year,  as well as the year you’re filing for can help reduce any surprises when calculating your tax liability. 

The recent spring statement included an increase in the threshold before you are charged national insurance, BUT there will also be an additional 1.25% “Social Care Tax” to keep an eye out for.

Really what we’re trying to get across is that being organised is key – that and having a good software partner to support you through everything! At APARI we aim to support all of our landlord users as much as possible through the transition from Self Assessment to Making Tax Digital for Income Tax. Want to keep up to date with all things Landlords & Tax? Check out our Community here.

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Salvation Army labelled rogue landlord after years of neglect

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The Salvation Army has been slammed for allowing some of its private residential tenants to live in substandard accommodation.

Properties in Hadleigh, Essex, were found to be riddled with damp and mould while some had vermin infestations or breached fire-safety regulations, leaving renters exposed to serious hazards for at least seven years.

Unreserved apology

An investigation by the Guardian and ITV News found that the Christian organisation ignored repeated requests to improve conditions from its tenants. It has now issued an unreserved apology and says it has begun surveying the properties and renovating vacant homes as part of an urgent action plan.

Problems were first documented in late 2014, then in 2018 the charity left up to 40 tenants with the impression they were about to be evicted, instead of paying to correct the problems. In 2019, a local environmental health officer at Castle Point council wrote to the Salvation Army and described the charity’s handling of the situation in Hadleigh as a “sordid mess” and served improvement notices on a number of its properties.

Long-standing tenant

Peggy Jane Smith, a Salvation Army tenant in Hadleigh for 38 years, whose property was found to be a fire risk, labelled its behaviour that of a rogue landlord. She said: “It’s very hard to try and tell people that because it’s not what people want to believe, but the unfortunate thing about the Salvation Army is, on the one side they have their spiritual side, but on the other side they’re behaving like hard-nose, unscrupulous, capitalists.”

Anthony Cotterill, the charity’s territorial commander, admitted that the condition of the houses was unacceptable. He added: “It is clear that we let down the tenants of Seaview Terrace and Mount Zion and I am deeply sorry. As well as an unreserved apology, I would like to offer reassurance that for some months now we have been working on an urgent action plan to bring these properties up to the correct standard.”

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Ban on charging ground rent on new leases from 30th June

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The government is to stop future leasehold homeowners from facing annual ground rent costs. Sometimes worth hundreds of pounds a year, these charges provide no clear service in return and can be set to escalate regularly, with a significant financial burden for leaseholders.

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