House prices AND inflation rose in June

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The UK’s average house price increased by 7.8% in the year to June 2022, the latest data from the Office for National Statistics (ONS) reveals.

And the ONS has also announced that the rate of annual inflation to July has hit double digits –

View Full Article: House prices AND inflation rose in June

EXCLUSIVE: Landlords battle city council over HMO council tax re-valuations

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Portsmouth’s HMOs are in the firing line again as growing numbers are being referred to the Valuation Office Agency (VOA) to have their council tax bands reassessed.

Rather than paying tax on the whole property, each room can be classified as a band A at a cost of £1,200, with tenants able to apply for a 25% single-person discount, taking the bill to £900 for each resident.

Tenants have even been charged back-dated council tax, meaning that some owe more than £3,000 without even realising, particularly if they’ve already moved out, according to the Portsmouth & District Private Landlords Association.

Although the practice was brought in to deal with commercial units being converted into residential properties, chairman Martin Silman suspects the council is referring each HMO that comes through its planning system. He says at last 12 members have been recently affected, as well as a local councillor who lives in an HMO.

“A member was told by the VOA that it was getting a lot more referrals than anywhere else in the country, so we’ve put in a Freedom of Information request as we’re hoping to get some answers,” Silman (pictured) tells LandlordZONE.

“Unfortunately, tenants will end up footing the bill, pushing up the lowest rents in the city which in turn will push all the city’s rents up, along with house prices.”

Chris Ward, Portsmouth Council’s director of finance, says he recognises landlords’ concerns and that the council is not deliberately seeking to ‘disaggregate’ council tax bills for HMOs.

He tells The News: “The council has no role in determining the council tax band of properties in the city, or when any changes should be effective from. This is the responsibility of the Valuation Office Agency which then informs the council. We are then obliged to bill the council taxpayer from that date.”

This summer, the city has been consulting on plans to introduce additional licensing for smaller HMOs which the landlord group believes will drive more out of the market, push rents up and create homelessness.

View Full Article: EXCLUSIVE: Landlords battle city council over HMO council tax re-valuations

EXCLUSIVE: Landlords battle city council over controversial council tax re-valuations

admin    Uncategorized     agents

Portsmouth’s HMOs are in the firing line again as growing numbers are being referred to the Valuation Office Agency (VOA) to have their council tax bands reassessed.

Rather than paying tax on the whole property, each room can be classified as a band A at a cost of £1,200, with tenants able to apply for a 25% single-person discount, taking the bill to £900 for each resident.

Tenants have even been charged back-dated council tax, meaning that some owe more than £3,000 without even realising, particularly if they’ve already moved out, according to the Portsmouth & District Private Landlords Association.

Although the practice was brought in to deal with commercial units being converted into residential properties, chairman Martin Silman suspects the council is referring each HMO that comes through its planning system. He says at last 12 members have been recently affected, as well as a local councillor who lives in an HMO.

“A member was told by the VOA that it was getting a lot more referrals than anywhere else in the country, so we’ve put in a Freedom of Information request as we’re hoping to get some answers,” Silman (pictured) tells LandlordZONE.

“Unfortunately, tenants will end up footing the bill, pushing up the lowest rents in the city which in turn will push all the city’s rents up, along with house prices.”

Chris Ward, Portsmouth Council’s director of finance, says he recognises landlords’ concerns and that the council is not deliberately seeking to ‘disaggregate’ council tax bills for HMOs.

He tells The News: “The council has no role in determining the council tax band of properties in the city, or when any changes should be effective from. This is the responsibility of the Valuation Office Agency which then informs the council. We are then obliged to bill the council taxpayer from that date.”

This summer, the city has been consulting on plans to introduce additional licensing for smaller HMOs which the landlord group believes will drive more out of the market, push rents up and create homelessness.

View Full Article: EXCLUSIVE: Landlords battle city council over controversial council tax re-valuations

Top 5 landlord questions on mortgages answered

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In December 2021, the Bank of England put up its base interest rate for the first time since the start of the pandemic, when it was dropped to a historic low of 0.1%. This year it has been increased several more times and this is expected to continue.

When the base rate rises – and particularly when inflation is high as it is currently – mortgage interest rates usually follow suit, to ensure that lenders can continue to cover their own increased costs.

As a landlord, here are 5 questions you might be asking right now:

What kind of buy-to-let rates are available at the moment?

Generally speaking, most landlords go for fixed, interest-only deals. While there are other factors to consider – including fees, early redemption penalties, and the standard variable rate when the fixed term ends – here are some headline figures for deals available as at the end of July 2022:

Are mortgage rates likely to go up further?

Unfortunately, yes – it currently sits at 1.75%. Experts are suggesting it could eventually reach 3% or even higher if inflation continues to rise in the UK.

Is now a good time to switch mortgages?

We’d suggest that unless you moved onto a new 5-year fixed deal within the last couple of years, it’s definitely worth trying to lock in current rates before they go up again.

Do I need to use a mortgage broker or can I go direct to a lender?

Although you may be able to secure a good deal for a standard residential mortgage by going direct to a lender – especially if it’s your own bank – that’s not generally true with buy-to-let mortgages. That’s because around two-thirds of BTL products are only available through brokers, so you won’t even find them on comparison sites. If you’re looking for a fixed-rate deal or a LTV of 80% or more, around 75% of those types of mortgages are broker-only.

It’s a good idea to review your mortgage every six months, with a broker like Mortgage Scout, as lenders tend to change their deals and may introduce new ones.

Is it better to own investment properties with cash or a mortgage?

Owning your home outright can be hugely beneficial. You don’t have the cost of monthly mortgage payments and the equity gives you a great deal of financial security and options for the future. However, with buy-to-let, you should be considering the financial return on your investment and leveraging the bank’s money via a mortgage can boost your capital returns significantly.

Here’s a simplified example:

• You own a BTL property worth £200,000 outright. If the market rises by 10%, you’ve made £20,000 – a 10% return on your £200,000 capital invested.
• If you owned the same property with a 75% mortgage, that £20,000 rise in value is a 40% return on your £50,000 capital invested. You’re benefitting from the profit on not only your own money, but the bank’s money as well!

You do have to consider the monthly mortgage payments which will reduce your ongoing rental profits, but the rise in the capital value of the property over time should more than compensate. That’s why buy-to-let is most successful when it’s treated as a long-term investment strategy.

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.

Your property may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.

MAB 14307

View Full Article: Top 5 landlord questions on mortgages answered

INVESTIGATION: Exasperated landlord warns others not to use unlicensed evictions firms

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An exasperated landlord in North London is warning others to beware of unregulated eviction companies after paying one £2,000 – but has yet to evict her tenants two years later.

The elderly landlord used Tenant Eviction 21 Co Ltd after deciding to renovate her house in London and sell it.

She says her contact at the firm, Michael Turner, told her he had served notice to the tenants in February 2020 – then Covid hit while she was out of the country for two years.

She became suspicious when her phone calls went unanswered. “I checked with the court and was told they had had to produce the papers 15 days before the review in April 2021 but had failed to do this, so were given another review date but failed to produce the papers a second time,” she tells LandlordZONE.

Back in the UK, she approached the estate agent that had recommended Tenant Eviction 21 and had provided the receipt for her payment – Marble Agency in Seven Sisters Road – now Theodore & Charles Ltd.

She was told Turner was ill, has been unable to contact him, and now despairs of getting her money back.

While regulated eviction firms have a solicitor acting for them, unregulated firms can only give guidance to clients, but their status is not always clear.

LandlordZONE was unable to contact Tenant Eviction 21 but Turner told us: “It’s not my company and I only did some consultancy work for them – I haven’t worked with them for several years.”

More information

The landlord believes there should be more information available for landlords to help them make decisions. “There’s not enough regulation around eviction companies,” she says. “Most of my savings have gone on solicitors and it’s affected my health. I hope my experience will at least stop this happening to other people.”

Theodore & Charles director Charlie Kleanthous tells LandlordZONE that it passed on the landlord’s money to Tenant Eviction 21.

He adds: “We’ve worked on successful cases with Mike Turner but in this case, communication was poor and that company didn’t fulfil what they set out to do.

“We wouldn’t recommend them again. The landlord should have been given an explanation – it’s possible that court papers were sent to the property where her tenant lives and were intercepted.”

Read LandlordZONE’s spotlight on the problem of unlicensed eviction companies.

View Full Article: INVESTIGATION: Exasperated landlord warns others not to use unlicensed evictions firms