Boris mulling lower CGT for landlords to persuade more ‘accidentals’ out of PRS

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Boris Johnson is reportedly looking at ways to shrink the amateur end of the PRS by giving accidental landlords incentives to sell up – a plan doomed only to drive up rents, says the NRLA.

Media reports describe Whitehall officials’ plans to tempt buy-to-let landlords into selling properties to first-time buyers by charging lower capital gains tax.

The Daily Mail says that although in the very early stages, the Prime Minister is keen to do something radical on housing before the next election.

Landlords currently pay 18% on any gain as a basic rate taxpayer or 28% as a higher rate taxpayer.

The Scottish Sun adds that ministers reckon large numbers of accidental landlords are helping to strangle housing supply; indeed, the latest English Housing Survey reports that 45% of landlords have just one rental property or 21% of the private rented sector.

The Sun quotes a source close to the discussions as saying: “The Prime Minister wants to shrink the buy-to-let market”.

Chris Norris (pictured), NRLA policy director, tells LandlordZONE that there appears to be a worrying lack of strategy and coherence in government thinking.

“What we know is that the demand for rented housing is outstripping supply,” says Norris. “Cutting supply further and driving up rents is hardly going to make it easier for aspiring homeowners to save for a home of their own.

“Instead, the government should scrap the nonsensical tax paid when landlords create new housing. As well as easing the supply problem, this would bolster Treasury coffers to the tune of £10 billion as a result of increased income and corporation tax receipts.”

Read: The complete guide to CGT to landlords.

Whitehall officials have also suggested doing more to help young people by persuading older people to move out of their family-sized houses into smaller homes better suited to their needs by reducing the amount of stamp duty that pensioners have to pay if they move to a smaller home.

Read more about CGT reform.

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Can we move into our HMO?

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My wife and I were wondering if we moved into our HMO, by not taking in a new group of students and paying the HMO mortgage off with the sale of our residential property and using what was the HMO as our new main residence?

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Don’t give away 50% of your profits

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A very popular strategy with many property investors is the concept of Joint Ventures, particularly when you have run out of your own money.

You find a great property deal and someone else (who maybe does not have the time

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EXCLUSIVE: Landlords fight ‘ridiculous’ plans to widen HMO licensing in Portsmouth

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Portsmouth Council has launched a consultation into licensing thousands more HMOs across the city.

Its current scheme already covers 1,200 larger HMOs but it plans to extend this to an estimated 4,800 three- and four-bed houses – figures that Portsmouth and District Private Landlord Association dispute.

Chairman Martin Silman (pictured) tells LandlordZONE: “The council only found 3,000 HMOs when they had additional and mandatory licensing between 2013 and 2018, and we know many have disappeared since then, so to suggest there are 2,000 more now than then is ridiculous.”

Smaller shared homes were included in mandatory licensing from 2013 to 2018 but only within certain parts of the city, while the new proposal covers the whole of Portsmouth.

The local landlord group believes the authority is using the exercise to increase the standards required for HMOs, and that this could backfire.

“Portsmouth already asks for most communal space per person in the country, now they are adding minimum kitchen widths and other strange requirements,” says Silman.

“The sad news is that this will drive a lot of small HMOs out of the market which will push up rents for all and create homelessness.”

He adds: “We will fight it vociferously but unless there is a major change of political views, it will happen anyway.”

No justification

But the council believes there is no justification for targeting specific areas of the city and its report explains: “We also believe that having different requirements in certain areas would cause confusion to landlords and tenants. It may also put undue pressure on neighbouring wards where rogue operators may be displaced.”

Last year, LandlordZONE reported that despite heralding its current licensing scheme’s success, it had fined just seven landlords and agents in 2020.

A final decision is expected to be made in the autumn, with the first five-year licences – costing £855 – potentially issued in spring 2023. The consultation is open for comments until 31st July at www.portsmouth.gov.uk/HMOLicensing.

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Landlord 1 – Shelter Nil

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I had a very large and aggressive tenant who was in rent arrears. For the 11 years of his occupation, he was regularly behind with the top-up to his housing benefit and I would periodically have to ask for back payments.

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Property passports to help landlords prove their homes are compliant

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The NRLA are calling for new property passports to help landlords prove their homes are compliant and tenants identify decent and safe housing.

Under plans devised by the National Residential Landlords Association (NRLA), such passports would certify that a property met all legal standards.

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‘Landlords cannot rely on agents to tell them about licensing’ – judge

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A landlord who blamed his letting agent for mistakenly telling him his property wasn’t an HMO has been slapped with a £19,350 Rent Repayment Order.

Joshua Conway sought advice from high street agent Elli G Estates about his property in Shirehall Close, Barnet (pictured), where four former tenants shared three bedrooms, a kitchen and a bathroom between September 2018 and September 2019, a First Tier Property Tribunal heard.

When informed in July 2019 that it needed a licence, he applied for an exemption notice by telling Barnet Council he would soon be moving back in.

The tribunal judge said that a landlord’s reliance on an agent would rarely give rise to a defence of reasonable excuse.

During the hearing, it was discovered Conway had been named in an article in The Times as a director of Vale Investment (Management), where tenants had been trying unsuccessfully for months to get the property agency to repair a leaking roof.

Conway claimed he was not involved in property management, which the tribunal disputed.

It ruled that the professional landlord, who has one other rental property, should not have taken advice from the agent and that he had a better knowledge of property management than he was admitting to.

Giles Peaker, a partner at Anthony Gold, says it’s increasingly clear that attempts to rely on it being ‘someone else’s job’ to tell the landlord they have a licensable HMO, will fail.

He tells LandlordZONE: “For blaming the letting agents to have any real prospect of success as a reasonable excuse defence, I think it’s right that there would need to be a clear and explicit duty on the agent to inform the landlord of licensing requirements set out in the agent’s contract with the landlord. Even then, it may not work, as it is still the landlord’s responsibility.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Landlords cannot rely on agents to tell them about licensing’ – judge | LandlordZONE.

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