WARNING: Chancellor’s courts funding cuts ‘will delay evictions’

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Spending cuts in the justice system could leave it facing collapse, hitting possession hearings and impacting homelessness help, warns the Law Society.

The Chancellor’s autumn statement effectively reduces its budget, which is already breaking down after decades of underinvestment, reports the solicitors’ professional body. It cites the civil division – encompassing eviction proceedings – as a particular concern.

“Courts are crumbling, dogged by delays, and there are chronic shortages of judges and lawyers as professionals leave this underpaid work in their droves,” says vice president Nick Emmerson (pictured).

“In civil justice, there are vast legal aid deserts across England and Wales, meaning people who are entitled to legal aid can’t access it.

“The cost-of-living crisis and public spending cuts mean more and more people will need legal help with life-changing issues such as homelessness and debt.

“But who is going to give that vital advice if there aren’t enough solicitors to meet the current demand? The government will be forced to pick up the pieces, at greater cost, further down the line.”

Earlier this year, LandlordZONE reported how courts around the country were still overwhelmed, with some having to outsource possession hearings to other courts to deal with backlogs.

In July, the government vowed to speed up the evictions process for landlords by improving admin around bailiff enforcement activity and bringing in new technology as part of the courts and tribunals service reform programme.

View Full Article: WARNING: Chancellor’s courts funding cuts ‘will delay evictions’

Grant Shapps warns landlords to pass on energy support payments to tenants

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HMO landlords have again been warned that they must pass on the Energy Bills Support Scheme (EBSS) rebate to tenants as the first payments are made, this time by business secretary Grant Shapps (pictured).

Earlier this year, the Government introduced new powers that mean intermediaries, including landlords who operate ‘all inclusive’ rental properties such as HMOs, must pass on savings made under the EBSS and other energy support schemes to end users, who don’t pay their energy bills directly.

However, the NRLA has accused it of demonising landlords unnecessarily and says the stance sends a dangerous and misleading message that landlords cannot be trusted to do the right thing, creating needless fear and anxiety for tenants.

£3.8 billion

The government reports that the scheme has provided a £66 discount for 97% of eligible households in England, Scotland and Wales in its first month, while the second instalment will reduce households’ November energy bills, which brings the total amount spent on the scheme so far to £3.8 billion. From December, the amount discounted will rise to £67.

Vouchers were sent to all two million customers with traditional pre-payment meters and the government has urged consumers to redeem vouchers as soon as possible, after figures showed only about two-thirds had already done so.

Secretary of State for Business, Energy and Industrial Strategy, Grant Shapps, says: “The government is committed to supporting people facing unique stresses with the cost of living and rising energy costs. Today’s figures show how we are making a difference in over 27 million homes across Great Britain.”

View Full Article: Grant Shapps warns landlords to pass on energy support payments to tenants

Landlords! We have lost the moral high ground and it’s not coming back

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While landlords have never been flavour of the month, we have lost the moral high ground over standards in private rented accommodation and it’s not coming back.

It’s hard to believe that landlord associations do not do more proactive PR work in reaching out to media organisations and that those media outlets don’t bother contacting landlords for our side of the story.

View Full Article: Landlords! We have lost the moral high ground and it’s not coming back

We would like to see tax relief for landlords who let to benefits tenants

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It is very welcome news that the Chancellor has confirmed that the government will uprate benefits by inflation with an increase of 10.1%, giving families on Universal Credit a boost of £600 per year. We would also like to have seen some form of tax relief for landlords who let to tenants in receipt of benefits to encourage them to remain in the sector.

View Full Article: We would like to see tax relief for landlords who let to benefits tenants

Knotty neighbour problem costs home owner £250,000

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A Japanese knotweed infestation caused homeowner Charron Ishmael to take her neighbour, retired NHS consultant Dr Sheila Clark, to court over a dispute about the plant.

Charron Ishmael was selling her property but because of the presence of the invasive plant in her neighbour’s garden, she had to knock £150,000 off the asking price of her £1.1m home, and the court dispute cost her £100,000 in legal fees.

Ms Ishmael, 50, claimed that her neighbour Dr Sheila Clark, 72, was aware that for years she had the invasive plant in her garden in Islington, north London, but took no action to have the plant dealt with. Japanses Knotweed has roots that spread out over a considerable distance at an alarming rate and in doing so can invade neighbouring properties.

As reported by The Mail Online, Ms Ishmael said the plant had forced her to reduce the asking price on her house, which had otherwise been valued at £1.1million. The house was finally sold for £950,000.

Where did Japanese Knotweed come from?

The plant was introduced to Britain in the Victorian era as an ornamental garden plant and it was used by the railway companies at the time to stabilise embankment soils.

What was found however was that the plant, when allowed to get out of control, has the power to undermine buildings. Its banboo-like roots or stems known as rhizomes can in theory undermine walls, fences and buildings. Bamboo plants can be equally if not more dangerous

Native to Japan, knotweed is considered an invasive species in the UK because, whereas in Asia these plants are controlled naturally by fungus and insects; they have no such natural enemies in the UK.

Like bamboo, knotweed is incredibly durable and fast growing. An infestation is incredibly difficult and expensive to eradicate. But if left to grow out of control it can invade all adjacent gardens and houses.

The plant’s roots spread at an alarming rate (up to 12 inches per day) in search of water and nutrients and will grow even faster when there’s lots of water present.

Charron Ishmael claimed at the Central London County Court that Dr Clark knew about plant but allowed it grow out of control. She has said that she had no other option but to take her neighbour to court because her neighbour would not control the knotweed and the local council refused to do anything about it.

The result has meant losing money on her house sale as well as a ruinous legal bill and her health has suffered having been signed off sick from work when the County Court case went against her, she claims.

Ms Ishmael told MailOnline:

‘It’s terrible. I don’t know how I am going to pay the legal fees. I haven’t lied. I haven’t done anything wrong. All I’ve done is to try to protect my house. “It’s been one thing after another. I’m off work with the stress of it all. I’ve had sleepless nights. To be honest I don’t think the judge listened to what I had to say. I feel that my reputation has been tarnished.”

Ms Ismael whose family had purchased the property in a quiet street in Islington, north London for around £250,000 in 2000, said her family had enjoyed many happy years living in the four-bedroom house.

The estate agent claimed the house was worth £1.1 million, but the buyers reduced their offer after seeing their survey report. The new owner has said that Ms Ishmael had made sure the plant had been eradicated before the sale completed.

What RICS says about knotweed:

“Substantial structures on sound foundations are unlikely to suffer structural damage due to Japanese Knotweed.”

It has been estimated that knotweed, a plant that is difficult to kill and irradiate, grows up to 10ft, and has been costing the UK economy millions a year in treatment and in home devaluations.

The plant tends to lie dormant in winter months before resuming its rapid growth in the summer, while there is a danger of it reaching buildings and crossing neighbour boundaries, sometimes resulting in litigation between property owners.

Government report on knotweed

A UK government report published last year gave credence to the view that Japanese Knotweed may not be as big a threat to buildings as previously thought. These were the conclusions reached in the government’s report and pointed to what the future might hold for Japanese Knotweed and those affected by it.

Previous to that, in May 2019 the House of Commons Science and Technology Committee published a report “Japanese Knotweed and the built environment”. This followed a detailed inquiry prompted by the publication of new research by Dr Mark Fennell, Professor Max Wade and Dr Bacon in July 2018 (Fennell et al) which suggested that Japanese Knotweed may pose no greater threat to property than that of other plants.

What exactly is Japanese Knotweed?

It is a large, highly aggressive and invasive weed, sometimes referred to as “elephant ears, “donkey rhubarb” or “monkey weed”. It grows in a variety of conditions and can commonly be seen alongside train tracks, on river banks and on waste ground.

The plant has large hollow stems similar to bamboo and large, green, heart shaped leaves. Its roots (rhizomes) have been thought to grow as far as seven metres horizontally and two metres deep underground – it is this extensive root spread that makes the plant so difficult to remove once established.

The only means of destroying Japanese Knotweed is to kill the roots. This can only be achieved by either multiple applications of herbicide or full excavation. If even a few centimetres of root are left in the ground, the plant can regrow.

Japanese Knotweed is classed as a controlled plant under the Wildlife and Countryside Act 1981.

Whilst it is not illegal to have the plant on your own property, it is illegal to allow it to spread on to adjoining property, including allowing the roots to spread underground. Under the Environmental Protection Act 1990 the plant is classed as “controlled waste”, meaning that it is illegal to dig it up and remove it from your property unless it is disposed of at a licensed landfill site.

A landmark legal case

In a 2018 legal case, Network Rail Infrastructure Ltd v Williams and another involved Japanese Knotweed growing on a railway embankment owned by Network Rail, and the claimants owned affected bungalows.

The Court of Appeal made it clear that the presence of knotweed will not, in itself, provide grounds for a diminution of value claim, but encroachment of the plant onto neighbouring land will probably entitle the neighbour to damages. This is not because of any reduction in value, but because it interferes with the ability to fully use and enjoy the land. It has yet to be seen how courts would approach the quantification of such loss, but the above case may or may not be a good example.

Mortgage lenders have some concern about knotweed and its impact on the built environment. But stories about knotweed have become a popular media favourite, often exaggerated. It can undoubtedly damage the built environment, but usually in buildings by exacerbating an existing weakness such as cracks, crumbling mortar, decaying tarmac etc. It can lift paving slabs, block paving, etc, but damage to building structures is rare.

View Full Article: Knotty neighbour problem costs home owner £250,000

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.

Contact Landlord Sales Agency:

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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