London council plans triple whammy of landlord licensing and regulation

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Merton Council, which includes the famous Wimbledon lawn tennis centre, is embarking on a big push to license all rented properties and HMOs in the borough as well as limiting the growth of small HMOs.

It wants landlords to take part in its new consultation on plans for selective and additional licensing as well as an Article 4 direction.

The proposed selective licensing scheme would cover Figge’s Marsh, Graveney, Longthornton, and Pollards Hill where 5,500 privately rented properties would need a licence.

Additional licensing would cover Figge’s Marsh, Graveney, Longthornton, Pollards Hill, Colliers Wood, Cricket Green, and Lavender Fields where there are about 700 unlicensed HMOs. An Article 4 direction would cover Colliers Wood, Cricket Green and Lavender Fields.

Poor property

Merton has more than 29,000 rented properties (about 34% of total stock) and says its research has identified issues in the sector related to poor property conditions and anti-social behaviour.

It recorded 3,275 complaints from private tenants over a five-year period, a report explains: “Having proactively used existing enforcement and other powers, the council now feels that the introduction of selective licensing in these specific areas will result in a reduction of these problems.”

Councillor Andrew Judge (pictured), cabinet member for housing and sustainable development, says: “We are determined that Merton residents living in rented accommodation have a home that is in good condition and is well managed, and that no resident has to endure the anti-social behaviour caused by overcrowded, poorly managed properties.”

Proposed fees are £652 for a selective licence, and between £1,115 and £1,215 for an additional licence. The 10-week consultation ends on 23rd January.

Read more: Official council tax re-banding of HMOs a ‘huge blow for tenants’, says MP

View Full Article: London council plans triple whammy of landlord licensing and regulation

The Rise of the Private Rental Sector

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For those that are unaware of the history let us examine how and why the Private Rental Sector came to be so prominent over the preceding decades. Housing became a legitimate and sound financial investment by the coming together of many factors most of them being political.

View Full Article: The Rise of the Private Rental Sector

Central banks agreeing to increase Interest rates slowly from here is hope for Landlords wanting to sell

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As interest rates shot up to 3% earlier this month, landlords immediately felt the pinch and panic. This massive increase came suddenly, at a time where some landlords who were thinking of selling their portfolios hadn’t yet reached a decision. Many landlords felt as if their options were outnumbered, and a raise to 5% was just around the corner, leaving them out to dry with no hope of recouping the financial damage.

However this week’s news in the Financial Times has come as a huge relief to many. The news that central banks are to shift away from “jumbo” interest rate rises has bought many landlords the time they needed. There’s no doubt that another rise is on the way, but right now this decision has bought us time. For many landlords that were on the fence about selling their portfolios, this is the sign they needed to act now while the window is open, and before things escalate. There’s no need to panic, great options to sell are still available, and companies like Landlord Sales Agency are coming to the rescue to help landlords get as much as they can for their buy-to-lets.

Landlords wanting to sell doesn’t mean that they’ve had to say goodbye to their entire portfolio, most landlords have opted to sell the majority and keep a few core profitable buy-to-lets ticking over to weather the storm.

One of the concerns some landlords have had with this option is a) they’re worried what price they’ll be able to get for their portfolios in this current market and b) what to do about a market which appears to have less buyer interest than back in June.

As specialists, and trusted partners of LandlordZONE, this is where we’re here to take away the stress. At Landlord Sales Agency, we’re experts in selling landlord portfolios, no matter what condition, and no matter whether there’s tenants in, out, or renovations, refurbs and certificates that need doing or getting. We’re also aware of the current market, which is why our team of specialists have the best strategy to get you the highest price possible so you can take a step back, and recoup the costs before next year’s economic uncertainty.

Most of our landlords are happy to work with 85% of the current market value, and for this we take the whole portfolio off your hands and deal with every single issue to get it sold within 7 to 28 days. At first glance this might seem conservative, however it’s a huge win when Estate Agents are unlikely to sell for more, and if they can, by the time they sell the market will have dropped again. Put simply, 85% of 100% value in this current market is the highest you’ll get compared to waiting until next year and potentially getting 85% of 90% when the market drops. Added to this, our formula 1 style team of portfolio exit specialists are here to help with whatever you need, and ensure that everything runs smoothly and fast so you can sit back and relax knowing you’ve got a great price for your buy-to-lets and zero hassle to worry about from this point onwards:

• We have a list of buyers who will buy your properties without having to evict tenants. This dramatically cuts down the time it takes to sell, plus means that you can continue collecting rent all the way up until the actual sale. For those properties that require evictions, we personally help your tenants relocate, or help them financially to find a new place.
• No matter how many houses you have, or in what condition, we’ll take them all off your hands, and get you the highest price for your portfolios in less than 21 days. We sell entire property portfolios, or partial portfolios in bulk in one go.
• We’ve got an extensive list of over 30,000 private buyers and relationships with the top property buying companies. Most of our portfolios sell within a week which is exactly what landlords need right now. We simply don’t have time to waste.

We sell properties either in one go as a full portfolio or as single units, depending on your instruction. Unlike traditional estate agents, or other property buying companies, both methods are extremely fast. We work quickly to collect information about rent, tenant history, running costs and ensure all certificates are in place to guarantee the sale is not delayed. If any certificates are missing, we have a team of engineers, builders and experts who will get all the certificates and paperwork done for you. The stress is completely removed out of the sale, and seller involvement is kept to a minimum so you can relax knowing it’s in swift and extremely capable hands.

Furthermore, we take our promise to ‘solve any landlord problem’ so seriously that, as a result of the number of enquiries we’ve received from landlords with cash flow problems, we can also use the equity tied into property to offer an interest free loan of up to £20,000 to be repaid on completion.

We know what it’s like right now to be a landlord who needs to sell, and we’re here to help.

We’re so confident in what we do, we can afford to go the extra mile to really help landlords get through this tough patch, and get the highest possible price for their property portfolio.

So if you want to exit the market, talk to us today.

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View Full Article: Central banks agreeing to increase Interest rates slowly from here is hope for Landlords wanting to sell

HMO landlords urged to back anti-council tax rebanding campaign

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Professional HMO landlord network, Platinum Property Partners (PPP), is urging all landlords to get behind a campaign that aims to abolish council tax re-banding for shared houses, which has the backing of Gosport MP, Caroline Dineage (pictured right).

For some time

View Full Article: HMO landlords urged to back anti-council tax rebanding campaign

Autumn Statement latest: Chancellor reveals tax rises for landlords

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Landlords face higher bills from next year after Chancellor Jeremy Hunt slashed the annual threshold for Capital Gains Tax from £12,300 to £6,000 next year and £3,000 from April 2024.

Although a rise in CGT didn’t materialise, he followed the Office of Tax Simplification’s advice to reduce the tax-free allowance by more than half – a move that property experts then warned could spark a mass exodus of landlords from the market.

In his Autumn statement, the Chancellor also announced that stamp duty cuts announced in the mini-Budget in September would remain, but end on 31^st March 2025, creating an incentive to support the housing market by boosting transactions.

Predecessor Kwasi Kwarteng raised the threshold to £250,000 and for first-time buyers, to £425,000 – cuts panned by mortgage brokers as a catalyst for stimulating an overheated property market.

Income tax

Other announcements include changing the threshold for the top rate of income tax from £150,000 to £125,000 and freezing allowances and thresholds for income tax, national insurance and inheritance tax until April 2028.

For the most vulnerable, Hunt told those on Universal Credit that their benefit would rise in line with September’s inflation figure of 10.1% from next April, while about four million families in the social rented sector would see rents capped at 7% in 2023/24, meaning an average saving of £200.

Landlords struggling to sort Alternative Payment Arrangements might be heartened to hear that the Treasury will invest £280 million in a DWP crackdown on benefit fraud and error over the next two years.

Energy bills

On the subject of energy bills, while the Chancellor announced a continued price guarantee from April of £3,000 per household and an additional cost of living payment next year of £900 for households on means-tested benefits, he also signalled that he would be getting tougher on carbon reduction – and possibly EPC targets.

“Energy efficiency is important and I have set our country new national ambition, that by 2030 I want to reduce energy consumption from buildings and industry by 15%, which equals a £28 billion saving,” he told MPs. “This is a shared mission with companies and families playing their part.”

Reaction

Sylvie Harris, Director of Lettings at INHOUS, says: “For the many landlords who have been planning to dispose of their rental assets due to the raft of legislation and adverse tax changes, the announcement to halve the Capital Gains Tax exemption in 2023 will come as a blow. 

“This news will make it less favourable for landlords to sell and they will likely continue to let their properties until the conditions improve.  However, tenants will benefit as there is already a shortage of rental properties available on the market.”

Dominic Agace, Chief Executive of Winkworth, says: “The change to CGT is yet another negative move by successive Chancellors against buy-to-let landlords, many of whom are already leaving the sector due to increased taxation, regulation and rising interest rates.

“This is an own goal by the Government as the private rental sector is the only place many people can find a home if they are not in a position to buy.

“With the lack of social housing supply and the need for young professionals to be highly mobile and able to move to London and other major cities, the role of the private landlord is more important than ever and should be encouraged.”

Iain McKenzie, CEO of The Guild of Property Professionals, says: “Bringing stability to the economy is the number one priority for the property sector. 

“These sweeping cuts alongside increases in taxation will spark fears of a deep recession on the horizon, but these decisions have been taken to avoid predictions of it lasting for two years – one of the longest in this country’s history.

“House prices are unlikely to drop dramatically as the unprecedented demand we have seen in recent years has endured. 

“There may be some realignment in pricing to adjust for the rising cost of living, but the market will recover. During the global financial crisis house prices dropped by around 19%, however, it has sustained and grown thereafter.

“Despite the increases in tax and budget cuts announced today, the stamp duty cut will remain in place until 2025, which shows that the government sees the property market as driving growth and stability. 

View Full Article: Autumn Statement latest: Chancellor reveals tax rises for landlords

Autumn Statement 2022 – Landlord Reactions

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The Chancellor of the Exchequer, Jeremy Hunt, has today announced his Stealthy tax threshold increasing budget today in a plan to preserve stability, promote growth and protect public services.

Whilst on the face of it not as severe as many predicted Hunt took great care not to use the words ‘tax rises’

View Full Article: Autumn Statement 2022 – Landlord Reactions

LATEST: Haringey goes live with UK’s first big ‘green’ selective licensing scheme

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Haringey’s new selective licensing scheme goes live today with a focus on prompting landlords to raise energy ratings.

After getting the green light from the government, the London borough has introduced its five-year scheme in 14 of its 19 wards in a bid to improve housing conditions and support the council’s ambition to tackle inequality.

It covers Bounds Green, Bruce Castle, Harringay, Hermitage and Gardens, Noel Park, Northumberland Park, Seven Sisters, South Tottenham, St Ann’s, Tottenham Central, Tottenham Hale, West Green, White Hart Lane and Woodside.

Protecting private renters and ensuring they live in safe and warm homes is a key component of the scheme and the authority promises to, “urge landlords to take maximum responsibility for maintaining effective and appropriate management of their properties”.

Fuel poverty

And with the cost of living continuing to rise, the scheme will also focus on reducing fuel poverty by identifying properties with the worst energy efficiency ratings. Haringey then aims to give landlords the right support and education to adapt their properties.

Councillor Dana Carlin (pictured), cabinet member for housing services, private renters and planning, says more than 40% of households in Haringey live in the private rented sector.

“Unfortunately, many of our PRS tenants are living in homes in poor condition and with low standards of housing management,” she adds.

“These properties also cause frustration to the wider community. Selective landlord licensing will help us to improve housing conditions for private renters, which is a key priority of this administration.”

All properties in the 14 wards that are privately rented to single households or two sharers will need to pay £600 for a five-year licence. The borough already runs an additional scheme for HMOs.

View Full Article: LATEST: Haringey goes live with UK’s first big ‘green’ selective licensing scheme

Property damage and cleaning top tenancy deposit disputes

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More than half of tenancy deposit disputes during the last year concerned property damage and cleaning, The Deposit Protection Service (The DPS) reports.

The DPS offers a free, impartial dispute resolution service to help ensure a fair conclusion to a dispute without the need for complex or expensive legal proceedings.

View Full Article: Property damage and cleaning top tenancy deposit disputes

PROBE: Landlords complain about rent-to-rent firm as deals go sour

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Complaints from landlords and letting agents have been passed to LandlordZONE about a rent-to-rent provider whose founder is lauded online for raking in up to £12,000 a month.

Merleen Gocan (pictured) is a director of the Good Living Group (GLG) and, along with business partner Sammy Hills has in the past boasted of turning over £350,000 from rent-to-rents in a year.

But the company has been ordered by the Property Redress Scheme (PRS) to repay thousands of pounds to two investors and has two more complaints pending.

However, Gocan denies all allegations and says the PRS claims are being disputed.

Nicole Barratt-Rae, MD of Barratt Sales and Lettings in Windsor, says one of her landlords is owed £5,000 in rent after a deal turned sour.

“I manage a block of six flats for a landlord who unwittingly signed up to GLG as part of a rent-to-rent deal, which then turned them into serviced accommodation,” she tells LandlordZONE.

“When the firm stopped paying him rent in July, GLG told us we would be illegally evicting the tenants if we tried to take the properties back.

Luckily, they were empty, the keys had been left in the key safe for all flats and the landlord had put a one-year break clause into his three-year management agreement.”

Ignored

Propertymark member Barratt-Rae adds that Gocan did not have the right to manage the property due to non-payment of rent as laid out in the tenancy agreement. “This was brought to her attention many times and she chose to ignore it.”

Barratt-Rae claims six other people she knows of have had bad experiences including a landlord who paid GLG for furniture that didn’t exist, and then received complaints about his property via Booking.com.

The PRS has recently compensated one landlord £22,628 after he funded repairs and paid rent on the basis that his property was going to be converted into an HMO – but Good Living Group failed to get a HMO licence and did not make the property comply with any legal requirements.

Contested

In another case, the PRS ordered that a finders’ fee of £6,300 was paid back after the investor decided not to go ahead with a deal – which Good Living Group contested.

Merleen Gocan tells LandlordZONE that in the case of the block of flats, GLG kept the rental payment up-to-date for the contract and accuses Barratt Lettings of breaching the agreement and illegally evicting tenants.

She says: “The £5,000 in question is the last four weeks’ rent when she changed the locks during that period. I have an email trail, text communication and video evidence of the full situation. Landlords should be made aware that this agent takes things into her own hands and acts illegally. The six other landlords’ claims [mentioned above] is fake.”

Gocan adds that Hills is not a director of the company and was consulting with her on that particular deal.

LandlordZONE has approached Sammy Hill for comment.

View Full Article: PROBE: Landlords complain about rent-to-rent firm as deals go sour

BLOG: Problem with rent controls is our costs cannot be… controlled!

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The problem with rent controls is that landlord costs cannot be controlled. For example, insurance, service charges, repairs and interest rates are all going up at a faster rate than rents.

Landlords’ margins have already significantly shrunk due to all the new regulation and tax changes, so if rents are capped then there will be even less money available to do repairs and maintenance, meaning a lower standard of accommodation.

Or worse still, more landlords will sell up meaning less properties available which will put further pressure on the already huge supply problem.

If rents are to be capped or controlled in other ways then there need to be incentives for landlords to keep them in the market such as tax credits, guaranteed rent payments by the government for defaults, no council tax for empty properties and lowering the tax rates on profits.

Mortgage costs

One example I have is one of my BTL mortgages has gone up from £289 to £624 per month since December last year but I have only been able to increase the rent by £50 as of this month. And the mortgage will be going up again next month when the new rate kicks in.

My other costs such as insurance and service charges have also gone up over £1000 this year.

This is a common story that I am hearing from our landlords too. Everyone is very concerned about interest rates and the impact to everyone.

Author BIO: Richard Jackson (main picture) is founder and CEO of landlord platform Alphaletz.

View Full Article: BLOG: Problem with rent controls is our costs cannot be… controlled!