Michael Gove sacked after joining his housing ministers in calls for Boris to resign

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Michael Gove, arguable the best housing secretary for some years, has been sacked from his job after joining a chorus of Tory cabinet ministers calling on the PM to resign.

During a fast-moving day in politics which has seen over 40 MPs quit the government or withdraw their support for the Prime Minister, DLUHC boss Michael Gove had called for Boris Johnson to step down while one of his ministers, Stuart James, resigned his post.

Another housing minister, Kemi Badenoch, was one of five ministers to call for Boris Johnson to consider his position, leaving just Eddie Hughes – who remained loyal on Twitter throughout the day – sticking to the official line.

The other four ministers who signed the letter but who work at other departments were Julia Lopez, Lee Rowley, Neil O’Brien and Alex Burghart.

Resignation letter

In his resignation letter James, which has only worked as a housing minister since February, said: “It is with sadness that I am resigning as Housing Minister.

“I pay tribute to all my ministerial colleagues, officials, and civil servants in the Department and the wider sector.

“I look forward to continuing to serve my constituents in Pudsey, Horsforth, and Aireborough.”

But his letter to the Prime Minister also admits that his loyalty to the party and Johnson had ‘overidden his judgement’ and that: “there comes a time when you have to look at your own personal integrity and that time is now”, he said.

The whole spectacle of the Johnson government imploding began last week when former housing minister Christopher Pincher resigned from his job as a government whip after admitting to ‘embarrassing himself’ after drinking too much at a party in London.

It later transpired that he had groped two junior Conservative MPs and activists and been reported by other MPs in attendance at the gathering.

View Full Article: Michael Gove sacked after joining his housing ministers in calls for Boris to resign

Housing ministers revolt! Gove and two deputies call for PM to resign

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Three key housing ministers including the Secretary of State working within the Department of Levelling Up, Housing and Communities have either resigned or called for Boris Johnson to go.

During a fast-moving day in politics which has seen over 20 MPs quit the government or withdraw their support for the Prime Minister, DLUHC boss Michael Gove called for Boris Johnson to step down while one of his ministers, Stuart James, resigned his post.

Another housing minister, Kemi Badenoch, was one of five ministers to call for Boris Johnson to consider his position, leaving just Eddie Hughes – who remained loyal on Twitter throughout the day – sticking to the official line.

The other four ministers who signed the letter but who work at other departments were Julia Lopez, Lee Rowley, Neil O’Brien and Alex Burghart.

Resignation letter

In his resignation letter James, which has only worked as a housing minister since February, said: “It is with sadness that I am resigning as Housing Minister.

“I pay tribute to all my ministerial colleagues, officials, and civil servants in the Department and the wider sector.

“I look forward to continuing to serve my constituents in Pudsey, Horsforth, and Aireborough.”

But his letter to the Prime Minister also admits that his loyalty to the party and Johnson had ‘overidden his judgement’ and that: “there comes a time when you have to look at your own personal integrity and that time is now”, he said.

The whole spectacle of the Johnson government imploding began last week when former housing minister Christopher Pincher resigned from his job as a government whip after admitting to ‘embarrassing himself’ after drinking too much at a party in London.

It later transpired that he had groped two junior Conservative MPs and activists and been reported by other MPs in attendance at the gathering.

View Full Article: Housing ministers revolt! Gove and two deputies call for PM to resign

Too many MPs are landlords, says leading international anti-corruption group

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An anti-corruption group has questioned how MPs and peers can objectively sort out the housing crisis when 27% of them own a second home.

Transparency International UK’s research found that 177 MPs own at least 312 residential properties they don’t live in, compared to just 9% of the rest of the English population.

Assuming a minimum value of £100,000 each, these 312 properties are worth at least £31 million.

Almost 40% (212 MPs and 321 Lords) had a registered interest in property with 113 MPs holding a total of 261 properties generating ‘significant’ annual rental income of £10,000 or more.

These interests ranged from owning a flat and renting it out to holding shares in a property finance company.

Conservative Lords and MPs had the most declared property interests with 43%, compared with 42% of Liberal Democrat parliamentarians and 23% of Labour Lords and MPs.

Conflicts of interest

The report says current rules don’t go far enough to address potential conflicts of interests.

It recommends placing tighter controls on parliamentarians’ second jobs, greater transparency over financial disclosures, and providing better training to ensure MPs and peers comply with the rules.

Transparency International UK believes that given Parliament scrutinises and votes on measures relating to a range of related matters, including Stamp Duty, planning rules, cladding fire-risk remediation and rights for renters, it’s reasonable to conclude there might be tensions between some parliamentarians’ public duties and their private interests.

The findings also beg the question why MPs are so hostile to landlords when so many of them hold rental properties.

Chief executive Daniel Bruce (pictured) says: “Collecting such details of MPs’ and peers’ financial interests is extremely time-consuming and highlights the need for greater transparency.

“Despite calls from the Commons Standards Committee and others to make these records more digitally accessible, there has been little progress to date.” 

View Full Article: Too many MPs are landlords, says leading international anti-corruption group

The 6 most-asked landlord questions on tax and insurance

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Insurance and tax aren’t the most exciting topics, but they are two of the most important to understand. These are some of the top questions we get asked by landlords.

Do I need landlord insurance?

Yes, because insurers consider a tenanted property to be higher risk than an owner-occupied home. It’s important to be aware that if you only have standard home insurance for a property that you rent out, any claim is likely to be rejected, which could leave you significantly out of pocket.

What type of cover do I need?

Landlord insurance products are designed to cover a range of issues and be flexible so you can customise them to your specific type of let and tenant profile.

Most landlord policies include as standard:

• Buildings insurance
• Theft, fire and flood
• Accidental damage
• Property owner’s liability insurance to cover your costs if someone injures themselves in your property and seeks compensation

It’s worth considering adding the following if it’s not already included:

• Malicious damage that might be caused by your tenant or visitors
• Alternative accommodation costs if your tenants need to be temporarily re-homed following an insured event
• Contents insurance for furnished properties

• Rent protection insurance
• Home emergency cover

How much does landlord insurance cost?

The cost will vary, depending on the size and location of your property, the type of tenancy, optional extras you may have added, and your insurance history.

As a rough guide, to insure a 3-bed detached modern property that is let to working tenants, you can expect to pay between £500 and £700 a year / £42 to £58 a month for a landlord policy that includes liability insurance and loss of rent cover. For a modern 3-bed terrace, it would be between £300 and £500 a year / £25 to £42 a month.

Source: 3 bed det https://quote.simplybusiness.co.uk/q/landlord/new_business/quote_comparison/62c3f7be1cd69001ef4c28553

3 bed tce https://quote.simplybusiness.co.uk/q/landlord/new_business/quote_comparison/62c3f7be1cd69001ef4c2855

What taxes do landlords have to pay?

Tax is very personal to your own circumstances and isn’t just based on your property earnings, it’s applied across all your income and assets.

1. Additional purchase tax. If the purchase means you’ll own more than one property, you have to pay a higher rate of tax. In England, it’s an additional 3% on top of standard Stamp Duty – and whereas the first £125,000 is tax-free for standard single property purchases, the higher rate applies to the whole purchase price, if you pay in excess of £40,000. If you’re buying a property at £200,000, that’s £1,500 standard Stamp Duty (£75,000 x 2%) plus £6,000 higher rate tax (£200,000 x 3%).
2. Income Tax. Your rental income is added to any other income you have and the whole amount – less the personal tax-free allowance (£12,570 until 2026) and any permitted deductions such as agent’s fees, repairs and maintenance – is liable to income tax. So it’s worth checking whether your income from property will take you into a higher-rate tax band before you buy.
3. Capital Gains Tax. When you sell or pass on your rental property, any increase in the value since you bought it is liable to CGT – less your annual personal allowance (£12,300 for 2021/22 and 2022/23). If you’re a higher-rate tax payer, you’ll pay 28%. If you’re a basic-rate tax payer, the gain is added to your income, so be aware this may mean part of your income may be charged at the higher rate.

How do I find out what tax I need to pay?

The best way to make sure you pay the right amount of tax is to consult a property tax specialist. By getting properly tailored advice, you’ll be able to judge what you’ll need to pay and when, so you can plan ahead.

When are tax payments due?

For landlords paying income tax via self-assessment, the deadline for payments is 31^st January each year.

For the tax year 6^th April 2021 to 5^th April 2022, the deadlines for filing your return are:

• 31^st October 2022 for paper returns
• 31^st January 2023 for online returns

For more information on letting property, do get in touch with our experts at Leaders. Leaders is an introducer appointed representative of Bode Insurance Solutions who can provide you an instant landlord insurance quote.

View Full Article: The 6 most-asked landlord questions on tax and insurance

What’s the outlook for UK commercial property, post pandemic & Brexit?

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The pandemic has had a devastating impact on commercial property, with lockdowns, social distancing, working from home (WFH), all accelerating the move to online and home deliveries. The likes of Tesco, Ocado and the other big supermarket deliveries were the saviour of the public during the worst dark days of lockdown, and they boosted one of the few property sectors to gain directly from Covid warehousing.

Shops, restaurants and leisure businesses suffered the most, with the demise of the high street and its negative impact on commercial property accelerated and continuing apace. Reduced footfall in some towns and cities reduced some property rents and values by as much a 50%, and despite the easing of restrictions values will be slow to recover.

Hot on the heals of Brexit and the pandemic came the war in Ukraine, exacerbating an already dire economic outlook – energy and food price hikes with steadily increasing inflation now look to slow the economy even more, at lease for the foreseeable future.

A partial recovery

Before the war in Europe, and a couple of years on from the start of the pandemic, investors were again turning to the commercial property market. Towns and cities throughout the UK have come back to life, though a long way from pre-pandemic levels – thousands of workers are still working from home and the fuel crises will exacerbate this.

Working from home here to stay

Around 40% of UK working adults were said to be WFH at some time in their week and despite the efforts of employers (private and public) to encourage staff back to the office, the WFH lifestyle is likely to continue and to some degree will probably become permanent.

Labour shortages mean that employers are faced with an employees’ market, which means employers will be forced to adopt strategies to attract staff and talent. With employees attending the office for a few days a week, businesses will need to think about how they adapt their premises to provide their staff with best possible space to carry on their work – Covid safe, environmentally friendly and offering the best possible spaces for work collaboration.

Demand for more faculties

As the economy does go into recover mode, and right now that looks a little way off, all this has major implications for landlords. Companies will be competing for offices with the right employee facilities, even the likes of in-house gyms or café, in the larger buildings.

Businesses looking to increase the size of their workforce will be looking for suitable commercial premises which have the floorspace and faculties they will need for expansion – the modern offices will probably need more floor space per employee that pre-pandemic, so fewer staff in the office does not necessarily mean that companies will need smaller offices.

Investors in commercial property need to be mindful of these key elements: improving space and facilities in the light of Covid and meeting the latest and future environmental standards (MEES) – all domestic and commercial buildings available to buy or rent in the UK must currently have an Energy Performance Certificate and achieve a minimum EPC rating of E.

The Government’s plans were for as many homes and commercial buildings as possible to have an EPC rating of C by 2035, where practical, affordable and cost effective. However, more recent soundings from Government, and following COP 26, it is now being proposed that ratings should rise to C or above for all newly rented properties from the start of 2025. These changes if the come would be phased in, with existing tenancies given until 2028 to comply. It is also likely that once new regulations apply, the penalties for not having a valid EPC could rise from £5000 to £30,000.

Re-purposing and re-configuring

There will be opportunities for those landlords who adapt their premises to the changing nature of the demand for office, retail, leisure and residential space. Despite many businesses offering hybrid working, and the economic headwinds businesses face, it is said that 80% of businesses are planning to increase their workforce, and the number of people attending the office over the next 12 to 18 months. According to Savills, there will be a growing demand for prime office space, a key trend in the commercial property market.

According to the accounting consultancy, Deloitte, a necessary conjunct to hybrid working (part home, part office) will be an increasing use of technology, which allows safe remote working, and maintaining the highest security for company data. Buildings will need to be wired and equipped for collaboration tools and video conferencing facilities that can connect people nationally and around the world.

In some cases, tenants will expect landlords to provide this technology, and competition for tenants may compel them to do so. It will require planning and investment from commercial property investors with the possible implementation of smart technology in office spaces. This will allow businesses to seamlessly switch between online and in-office working as well as providing total building security.

Repurposing has become a buzz-word amount property agents and landlords. With many vacant buildings, particularly around UK high streets, banks, offices and department stores, investors are recognising the potential of converting commercial properties into more profitable uses.

There has been a growing trend of converting these premises into hotels, leisure and residential premises, and many high street buildings on a mixed uses basis.

These properties can be converted to include shops or restaurants at ground level, improving the flexibility, profitability and value of the original building. As such a trend is emerging with landlords turning disused office and retail space which might include gyms, bars or other types of commercial units.

Campus Development is the current term used to describe developments that contains a number of buildings with supporting ancillary uses, operated as a total integrated package with facilities including outdoor space, parking, access, building design, landscaping and design aesthetics. In areas with high footfall, this could prove highly lucrative.

Other trends afoot

The demand for storage space as gone through the roof: as businesses struggle with supply chain issues – just in time delivery has suffered greatly with pandemic shortages and now the war in Ukraine – a trend has emerged for vacant commercial space, offices and retail premises to be converted for storage facilities.

The pandemic changed the landscape of the distribution industry and accelerated the growth of the distribution hubs and warehousing. Covid had a big impacted on distributors’ technology investment plans and this trend continues as the economy enters a post-pandemic phase. With a new normal coalescing, customer demands could be permanently changed, so a technological transformation is the likely result. According to ONS statistics, online sales have been accounting for approaching 40% of sales in the pandemic years.

Retail & office goes local

The decline on the high street has not just arrived with Covid, it’s been a long-term trend. However, WFH and convenience (local) shopping has seen something of a revival, post pandemic. During lockdowns, suburban areas have enjoyed relative success at the expense of some of the big supermarkets, town and city high streets and large shopping centres. People favoured staying close to home, avoiding large crowds and using their smaller shops over larger supermarkets. They have also had more time and flexibility with the remote working trend, giving people more time to visit their local shops on a more regular basis.

Many local independent shops have have given exceptional service during Covid and many have managed to maintain their levels of footfall despite the difficulties. This trend looks likely to continue post-pandemic, in many locations.

The reconfiguration of some high streets in enlightened towns and cities, with pedestrianisation and ample free parking, has allowed cafes, restaurants and other leisure faculties to offer outdoor seating and to grow revenue, as well as increasing healthy footfall for other commercial uses.

As independent businesses grow, opportunities are arising for some smaller commercial landlords to pick up bargain properties with the potential for re-purposing conversions. In these towns and suburbs, where buoyancy is retuning, the demand for localised retail spaces is set to rise. With this revival come opportunities for commercial to residential and mixed use conversions on a smaller urban and high-street based scale.

The trends afoot in the commercial property markets both large and small show that commercial property investing, though down, is by no means out, and the future, as the economic cycle works through, looks decidedly more optimistic.

Further reading:

The post-pandemic outlook of the UK commercial property market

Commercial property: the post-pandemic landscape

View Full Article: What’s the outlook for UK commercial property, post pandemic & Brexit?

EPCs (bane of my life) and Energy Suppliers (also bane of my life)?

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We have a vacant flat with a very low EPC (G!), in which we want to install high heat retention storage heaters.

Good idea? No, not when British Gas is only making emergency engineer appointments and cannot give me a date for the installation of an Off-Peak Meter.

View Full Article: EPCs (bane of my life) and Energy Suppliers (also bane of my life)?

Key architect of evictions ban and Solicitor General Alex Chalk quits Government

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The Solicitor General, MP Alex Chalk, has resigned from the Government following last night’s departure announcements from Rishi Sunak and Savid Javid.

Chalk may not be a household name like the now former Chancellor and Health secretary, but he was one of the key players in lining up the multiple eviction bans that made life difficult for thousands of landlords with rent arrear tenants during the pandemic.

Chalk was a key player in getting the Public Health (Coronavirus) (Protection from Eviction) (England) (No. 2) (Amendment) Regulations 2021 (S.I. 2021, No. 362) through parliament.

Although called the Solicitor General, Chalk is in effect the Attorney General Suella Braverman’s right hand man, which will be all the more awkward for her as she’s a key Johnson loyalist.

Cumulative effect

In a resignation letter to Boris Johnson this morning, Chalk – who is MP for Cheltenham – said “the cumulative effect of the Owen Paterson debacle, Partygate and now the handling of now former Deputy Chief Whip’s resignations [Chris Pincher] is that public confidence in the ability of No.10 to uphold the standards of candour expected of a British Government”.

Back in March 2020, when the government brought in its first evictions ban, Chalk released a statement saying that he was ‘for renters’ and that “as a result of these measures, I’m confident that no renters in private or social accommodation need to be concerned about the threat of eviction”.

But as LandlordZONE reported on many occasions during the pandemic, landlords who had tenants deliberately seeking to avoid paying rent for their own financial benefit were caught up in the rules surrounding the evictions ban, which prevented them from evicting such tenants under any circumstances.

View Full Article: Key architect of evictions ban and Solicitor General Alex Chalk quits Government