Haringey Selective Licensing Scheme Spells More Misery For Both Landlords and Tenants

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Haringey Council are the latest to introduce Selective Licensing, but this latest iteration of far too many Council’s preferred money grabbing scheme to swell their coffers includes additional EPC rating conditions that are highly likely to further exacerbate the acute shortage of quality rental properties in their area.

View Full Article: Haringey Selective Licensing Scheme Spells More Misery For Both Landlords and Tenants

Unintended consequences of plans to ban Section 21 evictions ‘already happening’

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A new landlord survey has revealed the effects of the Government’s proposals to ban Section 21 evictions already feeding into the private rented sector.

Evictions specialist Landlord Action canvassed some 1,500 landlords and found that 26% of those who had evicted a tenant over the past 12 months via a Section 21 had done so because they wanted sell the property.

Other reasons given included rent arrears (31%), anti-social behaviour (22%) while just 2% said it was in order to move back in.

Of those who said they planned to evict their tenant over the next 12 to 18 months, 24% said they were making the move because of the increasing legislative burden means they have decided to sell.

The proposed Rent Reform Bill, which will see Section 21 ‘no fault’ evictions banned, was also a key reason for landlords seeking to remove tenants in the coming months, with 28% of landlords saying this was the main reason, with a further 28% saying they were undecided.

Unintended consequences

“The response to our latest survey paints a very clear picture of the unintended consequences of abolishing Section 21,” says Paul Shamplina (pictured), founder of Landlord Action and Chief Commercial Officer for the Hamilton Fraser Group.

“More than a quarter of tenants who have or will be asked to leave their rental properties (via receipt of a Section 21 notice), are in such a position not because they have done anything wrong but because landlords fear they will be unable to gain possession of their property easily in the future, if their circumstances change.

“Competition for rental properties is already at an all-time high, and we could be heading towards a rental stock crisis.

“Whilst we don’t know how many of the properties sold will remain in the buy to let sector, it’s clear that tenants will ultimately suffer as the combination of pressures forces rents to continue to rise.

“Landlords need reassurance and clarity on the future of evictions soon if the sector is to avoid a deluge of evictions and homelessness.”

Read more about the Government’s plans to reform the private rented sector.

View Full Article: Unintended consequences of plans to ban Section 21 evictions ‘already happening’

Speculation grows that Rees-Mogg will be Housing Secretary if Liz Truss wins

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It’s known as ‘silly season’ when the media focuses on light-hearted stories, but news that Jacob Rees-Mogg (pictured) is being mooted as the new Levelling Up Secretary has been seen by some as no laughing matter.

As the leadership contest draws to a close, preparations for Liz Truss’s potential premiership are reportedly well under way and she is thought to already have a clear vision of her cabinet.

There’s speculation that the Old Etonian and loyal Truss supporter could soon fill Greg Clark’s shoes, who only took over from previous incumbent Michael Gove at the beginning of July.

But the idea of Rees-Mogg – mocked as the ‘minister for the 18^th century’ – being put in charge of the Tories’ flagship policy has been greeted with a mixture of exasperation and disbelief.

As well as being responsible for narrowing growing inequalities in the UK, he would be tasked with sorting out the fall-out of the cladding scandal, homelessness, housing development, and of course, the Renters’ Reform Bill.

Brexit opportunities

In his defence, Rees-Mogg has held key positions as leader of the House of Commons as well as minister for Brexit opportunities and government efficiency.

But the Eton-educated son of a lord made millions as an investment banker before entering politics – not ideal qualifications for someone in charge of community regeneration. He was also forced to apologise after suggesting that victims of the Grenfell Tower fire had not used “common sense”.

However, the leak could be a bit of a smokescreen to distract from other more serious problems, while some Westminster insiders have suggested Truss has marked out Simon Clarke for the role – a former minister at the Ministry of Housing, Communities and Local Government and currently number two at the Treasury.

View Full Article: Speculation grows that Rees-Mogg will be Housing Secretary if Liz Truss wins

More than a quarter of landlords who evict tenants do so to sell up

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It has been revealed that 26% of landlords who have issued a Section 21 notice of eviction to their tenants in the last 12 months have done so because they plan to sell their property.

The survey was carried out by Landlord Action

View Full Article: More than a quarter of landlords who evict tenants do so to sell up

London borough’s HMO Selective Licensing scheme approval – with a twist

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A new property licensing scheme has been approved to provide safer housing in Haringey – but there’s a twist for landlords.

The council says that for some rental properties in the east of the borough, landlords will have to improve the energy efficiency rating to get HMO approval.

View Full Article: London borough’s HMO Selective Licensing scheme approval – with a twist

Tenants opt to stay put as rents continue to surge

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A lack of homes to rent is causing tenants to remain in their homes, research reveals.

In its latest report, Propertymark says that 73% of letting agents say they have seen an increase in renters wanting to renew tenancies rather than move over the past year.

View Full Article: Tenants opt to stay put as rents continue to surge

London borough gets green light for unusual EPC-linked Selective Licensing scheme

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The Government has given the Hackney council in London the green light to introduce a Selective Licensing scheme in 14 of its wards to the east of the borough.

This scheme will be highly unusual because part of the scheme’s aims will be to target properties with low EPC ratings and help landlords upgrade them, which Hackney says is a direct response to the cost of living crisis.

As LandlordZONE reported last year, the scheme is due to rake in some £21.6 million for the council in fees revenue.

Hackney’s announcement follows a consultation last year among landlords, tenants and other interested parties..
But due to the size of the scheme, the Secretary of State for Levelling Up, Housing and Communities had to give his consent.

Legally let

This has now been achieved and landlords who let their properties in the east of the borough to a single family or two unrelated sharers will now be required to obtain a licence from the Council to legally let the property.

This scheme is in addition to the existing borough-wide licensing scheme for HMOs.

With a specific focus on reducing fuel poverty, the Selective Licensing scheme will help the council identify properties with the worst energy efficiency ratings and provide landlords with the relevant support and education to adapt their properties and effectively measure their carbon emissions the council says.

Few details of how this will work have been released, although one Haringey advice documents reveals thatit will: “require landlords to take action to improve the quality of the homes they rent and manage those properties more effectively”.

Those who apply for an ‘early bird’ Selective Licencing application will benefit from a discounted fee.
Landlords will pay £350 per a property instead of £600, should they sign up early.

Cllr Dana Carlin (pictured), Cabinet Member for House Services, Private Renters and Planning, says: “With over 40% of the borough renting from a private landlord, we want to ensure all our residents live in warm and safe homes.

“The Selective Licensing scheme will enable us to work with landlords to improve the quality of the housing stock in the private rented sector and support our private renters.

“We will take action to ensure that all private rented properties in the designated area are licensed and comply with relevant conditions.”

More details on how to apply.

View Full Article: London borough gets green light for unusual EPC-linked Selective Licensing scheme

Poacher turned gamekeeper? Airbnb helps spot fraudulently rented social housing

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Airbnb has started sharing payment data with Kensington and Chelsea Council in a bid to crack down on illegal short-term lets.

The lettings platform was given the go-ahead by the courts to share information as part of a new collaboration with the authority to tackle the problem of fraudulently let social housing. Any evidence it finds can be used in future legal action and will identify those social housing properties being potentially listed as holiday and short-term lets.

Theo Lomas, head of government relations for Northern Europe at Airbnb, says the initiative highlights the need for a more regulated sector.

Illegal

“Hosting in subsidised or social housing in the UK is illegal and has no place on Airbnb,” he says, “however the current situation is complex and costly, and requires a court order to avoid breaking GDPR rules.”

Adds Lomas: “This is yet another example of the need for the UK to update its rules and introduce a single registration system, so authorities have the information they need to tackle bad actors and return housing to those in need.”

The order, a first for Kensington and Chelsea, applies to two estates in North Kensington, but Airbnb and the council are working together to stamp out illegal sub-letting activity in social housing across the borough.

Councillor Kim-Taylor Smith (pictured), lead member for housing, says there’s huge demand for social housing in the borough.

“It’s simply not fair that people in genuine need are being denied a place to call home because others are illegally subletting their council properties to make money.”

He adds: “Tenancy fraud is not a victimless crime. It costs the public purse an average of £42,000 a year for each home and this welcome collaboration with Airbnb will help us to clamp down on it in our borough.”

View Full Article: Poacher turned gamekeeper? Airbnb helps spot fraudulently rented social housing

LATEST: More tenants staying put instead of moving home, report letting agents

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More renters are choosing to renew their existing tenancies rather than move house, according to estate agency trade association Propertymark’s latest research.

With rents still rising, a new peak in the number of people looking for a home to rent and lack of stock, the estate agent body reports that 73% of agents have seen an increase in the number of tenants renewing their tenancies during the past 12 months, evidencing the ‘big stay put’.

An average of 127 new applicants were registered per member branch in July, a figure which has been on a slow upward trend since February when it stood at 79.

Propertymark’s members reported having an average of 11 properties per branch that were available to rent in July – the same figure as the previous month and up from four properties reported in February.

It adds that 82% of members reported month-on-month rent prices increasing in July, a new record that reflects the continued pressure on rents experienced since spring last year.

Propertymark CEO Nathan Emerson (pictured) explains that the private rental market continues to be battered by the perfect storm of high demand, low availability and affordability issues that shows no sign of easing.

He says: “Governments across the UK are all engaged in a tenant-focused reform of their private rental sectors.

“To boost supply, they also need to consider the heavy tax burden on property owners, the impact of more profitable and less regulated short-term lets, many of which stand empty for part of the year, and the lack of new homes being built to cope with the varied needs of a growing population.”

View Full Article: LATEST: More tenants staying put instead of moving home, report letting agents

Making tax digital as a landlord: What you need to know

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Making tax digital (MTD) for income tax is part of the government’s long-term strategy to digitalise tax and will have implications for how landlords pay tax on their income. For those used to self-assessment, it will represent a change, but providing digital records will give businesses greater insight into their finances and help avoid mistakes and lost tax revenue. With this new way of reporting income for tax purposes already coming in, it is essential for landlords to fully understand the process and what it means for them.

Who should be in the MTD program?

The government already requires VAT-registered businesses over the VAT threshold to use software in their accounting. That came into play in April 2019, and all VAT businesses have needed to follow the rules since April 2022.

From April 2024, many businesses and individuals using self-assessment for their tax returns will need to move to MTD, including landlords. The threshold is those whose income is over £10,000 per year. If, as a landlord, your rental income is over £10,000, you will need to use MTD. If, as well as a landlord, you are also a sole trader, you will need to combine your income from all your businesses, including rental income and use the MTD program if you are over the threshold.

If your rental income is below £10,000 a year and that is your sole income, or your additional income comes from employment where your tax and NI are paid through your employer’s payroll, then you do not need to move to MTD and can continue using self-assessment for tax liabilities.

Accounting software

One of the fundamental changes is that for MTD, it is compulsory to use software for accounting. If you already use software for your financial records, you will need to ask your provider if they intend to become MTD-compatible. The Gov.UK website has a list of software that is already compatible, including APARI, Sage and Untied, with a further list of companies with compatible software in development. It is worth checking this page as the deadline for moving to MTD comes closer to see if you need to change your provider.

MTD-compatible software comes in a range of prices and includes a variety of features, with some companies offering tiered systems to make them more affordable for smaller businesses. Some software packages offer free trials that are ideal for trying before you commit to them, and others provide a basic package that is entirely free. It is well worth looking closely at several different providers to find the one that best meets your needs and budget.

Owning multiple properties

If you have property income from two or more properties, you do not need to register each one separately for the MTD program, as all your income will be submitted in one. However, for your purposes, it is probably still a good idea to maintain individual records for each property you own to be able to make sensible decisions and plans.

Co-owning properties

If a business partnership owns a property or several properties, a nominated partner must fulfil the MTD obligations on behalf of the partnership. The individual’s share of the profit based on ownership will be pushed by the nominated partner to their digital tax accounts, and their individual tax liability will be calculated.

If you own property jointly, perhaps with a spouse, each person who received income from that property must register for MTD and report their income separately.

Getting started

Assuming you have not already registered for MTD as a VAT business, you or your accountant must register by the 5^th of April 2024. If you are already registered for self-assessment, you will not be moved automatically.

Using your software, you will provide HMRC with quarterly updates. Although there is no legal requirement for them to be accurate, they will be used to estimate your tax and NI obligations. Making them as accurate as possible will give you reliable estimates to help you with your financial planning.

By the 31^st of January, following the end of each tax year, you will use your software to provide an end-of-period statement (EPOS) with details of your property income and expenses. If you have any other businesses, you will also need an EPOS for each of them. At this time, you should also complete a final declaration of income, combining income as a sole trader and your rental income. The 31^st of January is also the deadline for paying tax and national insurance.

As with all changes, MTD is likely to take some getting used to, but Gov.UK guidance and videos are available to help you make the change more smoothly.

View Full Article: Making tax digital as a landlord: What you need to know