Petition for tax relief reinstatement – Government says ‘No’

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A bid by a landlord to get the Government to reinstate tax relief allowing mortgage interest to be set against rental income has been shot down after the petition reached 28,000 signatures.

Simon Foster started the petition on the Government website to reinstate the full amount of mortgage interest against rental income before tax is calculated.

View Full Article: Petition for tax relief reinstatement – Government says ‘No’

BREAKING: Scots government U-turns on rent freeze after ‘listening to landlords’

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The Scottish government has ‘seen sense’ and converted its controversial rent freeze announced last September into a ‘rent cap’, limiting rent rises in the private sector to 6% from April 1^st this year.

This decision was announced by housing minister Patrick Harvie (main picture), who it is claimed has listened to the concerns of landlords and letting agents in Scotland.

Only a week ago leading figure Jim Parker wrote exclusively for LandlordZONE, warning that the measures, along with the recent increase in stamp duty for buy-to-let purposes, had “all got too much for the private investor who has consistently propped up and supported the rental sector for the last 20 years” and that many were leaving.

David Alexander, CEO of DJ Alexander Scotland Ltd, says: “Given the level of feeling from landlords, property investors, the build to rent sector, universities, the farming community, and others that the rent freeze was damaging the sector and reducing the availability of homes for tenants it is appropriate that the Scottish Government has seen sense and adopted a more conciliatory approach. To do anything else would have simply exacerbated the current housing shortages.”

Knee-jerk

Oli Sherlock (picutred), Director of Insurance at Goodlord, adds: “A rent freeze is a knee-jerk reaction which, although it might help some tenants in the short run, is unsustainable and has the long-term impact of pushing more landlords out the market and squeezing the availability of rental homes.

“A price cap is a more sensible step forward than a freeze, but it’s still not addressing the key issues facing the market today.

“We have an economic and regulatory environment that is driving landlords away from the sector and not enough homes to go around.”

Pic credit: Patrick Harvie/Twitter

View Full Article: BREAKING: Scots government U-turns on rent freeze after ‘listening to landlords’

Scottish government U-turns on rent freeze after ‘listening to landlords’

admin    Uncategorized     agents

The Scottish government has ‘seen sense’ and converted its controversial rent freeze announced last September into a ‘rent cap’, limiting rent rises in the private sector to 6% from April 1^st this year.

This decision was announced by housing minister Patrick Harvie (main picture), who it is claimed has listened to the concerns of landlords and letting agents in Scotland.

Only a week ago leading figure Jim Parker wrote exclusively for LandlordZONE, warning that the measures, along with the recent increase in stamp duty for buy-to-let purposes, had “all got too much for the private investor who has consistently propped up and supported the rental sector for the last 20 years” and that many were leaving.

David Alexander, CEO of DJ Alexander Scotland Ltd, says: “Given the level of feeling from landlords, property investors, the build to rent sector, universities, the farming community, and others that the rent freeze was damaging the sector and reducing the availability of homes for tenants it is appropriate that the Scottish Government has seen sense and adopted a more conciliatory approach. To do anything else would have simply exacerbated the current housing shortages.”

Knee-jerk

Oli Sherlock (picutred), Director of Insurance at Goodlord, adds: “A rent freeze is a knee-jerk reaction which, although it might help some tenants in the short run, is unsustainable and has the long-term impact of pushing more landlords out the market and squeezing the availability of rental homes.

“A price cap is a more sensible step forward than a freeze, but it’s still not addressing the key issues facing the market today.

“We have an economic and regulatory environment that is driving landlords away from the sector and not enough homes to go around.”

Pic credit: Patrick Harvie/Twitter

View Full Article: Scottish government U-turns on rent freeze after ‘listening to landlords’

Where is the landlords’ voice?

admin    Uncategorized     agents

Hi all, I have been listening to many reports on the news and most recently a representative of Shelter on Rip Off Britain.

Whilst I fully agree some properties are in a bad state of disrepair and mould

View Full Article: Where is the landlords’ voice?

LAW: Landlord escapes £15,000 bill after tribunal’s ‘surprising’ decision

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Three tenants have only been awarded 20% of a rent repayment order application after a tribunal went easy on their forgetful landlord.

Lawrence Hoo admitted he had not renewed an additional HMO licence for the property in St Marks Grove, Easton, Bristol, but had applied as soon as he was told.

The council renewed his licence without any additional conditions attached and didn’t take any further action against him.

The First Tier Property Tribunal was told that the licence expired just as the Covid pandemic began – in May 2020 – and wasn’t renewed until March 2022.

Surprising

Hoo’s solicitor suggested that this was a case where the amount awarded should be 0% but not more than 15-20%.

In a surprising result, the tribunal agreed and decided that the tenants should only be awarded £3,000, despite claiming £15,000, as they had paid £450 a month rent from April 2020 to May 2021.

The tribunal ruled: “We are satisfied that there are no aggravating factors in respect of the offence.

“Mr Hoo had previously held a licence and upon renewal it was renewed promptly by the council without any significant new conditions attached and certainly without any works being required.

Further we note the licence did expire shortly after the country was affected by the Covid pandemic which significantly affected all of our daily lives throughout 2020.”

The tenants were also awarded £300 in costs.

Read the decision in full

View Full Article: LAW: Landlord escapes £15,000 bill after tribunal’s ‘surprising’ decision

Letting agents report ‘perfect storm’ facing them and their landlords

admin    Uncategorized     agents

Letting agents are worried about landlords selling up, new legislation, rising costs and an upsurge of abuse across the sector.

A Properymark survey found that most feared landlords quitting because agents can no-longer afford to let property (80%), the impact of new laws (66%), rising costs (55%) and abuse from tenants (33%). The body says that it is aware anecdotally that abuse cases have been on the rise over the last year.

In its annual review of 2022 and outlook for 2023, agents reported that the biggest opportunity for their businesses was the chance to expand their portfolios as they encouraged more landlords to turn to full management and take over the properties of competitors who hadn’t survived the economic downturn.

Their biggest concerns for landlords in the year ahead were the impact of incoming legislation (80%), diminishing yields (44%) and issues with damp, condensation, and mould (35%).

Landlords’ biggest opportunity was seen as the potential for increasing yields (57%) – but only certain investors.

Rising costs

Those with buy-to-let financing and fixed-terms coming to an end this year would see their costs increase significantly due to rising interest rates, but those without mortgages on their let property should see yields rise as house prices drop and rents rise.

This would herald a chance for further portfolio investment.

Agents’ fears for tenants include rising utility costs (78%), closely followed by a lack of available properties (74%) and rising rents (68%).

CEO Nathan Emerson (pictured) says: “Demand for rental property has grown by 57% since 2018, when Propertymark records began. At the same time, there was no growth in the size of the private rented sector to house these tenants.”

View Full Article: Letting agents report ‘perfect storm’ facing them and their landlords

House prices to fall by 10 per cent this year says bank boss…

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Speaking at Davos, the Swiss ski resort where the World Economic Forum holds its annual meeting, Lloyd’s bank CEO Charlie Nunn said that the UK house price fall will be limited.

His views are bolstered by recent numbers on the progress of the UK economy which managed a second month of growth for the final quarter in November 2022. The latest figures are a mild indication that the economy may have dodged a bullet, suggesting a recession could be avoided, challenging some economists to reconsider their previous forecasts for the year ahead.

Economic output in the UK rose by 0.1 per cent in November. This followed a 0.5 per cent gain in October, a trend that makes a final quarter economic contraction unlikely. This, positive news comes in the face of average household energy bills having risen by over than 25 per cent to £2,500 since September.

Mr Nunn said that he expects UK house prices to fall 8-10% this year. His views run counter to the Bank of England’s previous forecasts of the coming longest recession on record.

Mini budget shock

The U.K. property sector came to a shuddering halt following the Truss/Kwarteng “mini budget” last September and has been sluggish since, as the Bank of England continued to aggressively hike interest rates to attack the double-digit inflation figures.

As delegates from across the world and many economic sectors converged for several days of talks and meetings to address urgent global issues, Mr Nunn gave reassurance to the UK property sector that a price drop may be limited.

The pressure that British housing felt as the impact of former prime minister Liz Truss’ disastrous “mini-budget” resulted in 40% of all mortgage products on offer in the UK being withdrawn due to concerns over the rapidly rising interest rates.

Since then the Bank of England has continued to chase up interest rates in a priority policy to drive down inflation – from 0.1 per cent early last year to 3.5 per cent in December – and more hikes on the way after predicting that the country was entering its longest recession on record.

Inflation was recorded at 10.7% last November, and the Bank has hiked rates on nine consecutive policy meetings occasions to lift its main rate from 0.1% to 3.5%. Now more increases are expected over the coming months in 2023.

More evidence of stability

A new report this week from Rightmove would suggest that prices may well be stabilising as it states that asking prices for UK homes were rising slightly in January, that’s the first positive sign of a floor for the first time in two months.

Lloyds CEO Mr Nuun said:

“Our base case for 2023 is we will have a recession — a mild recession — GDP of about -0.1% this year, unemployment staying strong and that’s more because of the constraints on the supply side, interest rates about 4% and a recovery coming into 2023.

“The other challenge a lot of our customers are focused on is house prices and we do see house prices softening about 8-10% this year.”

Living standards under pressure

The Office for Budget Responsibility (OBR) the independent government agency has forecast that UK households face their biggest fall in living standards on record.

This one statistic has major implications for renters when it comes to the pressure they are under to maintain rent payments.

But as the Mr Nunn, who is head of the largest retail and commercial financial services group in the UK., said, as he sees it, there’s two different stories here!

“First of all, there is a relatively small but really important group of customers with mortgages… who are going to struggle to make ends meet in the cost of living. That’s about 1% of customers we can see in the U. and we really need to focus on supporting them,” he goes on…

“We’re seeing a much larger set of customers having to adapt their spending and adapt to both higher costs of living and higher mortgage spend, but there still is real resilience in businesses, in households and in individuals at the higher income levels in the UK and strong spending we’re seeing going through.”

UK economy – a near miss with recession?

If Mr Nunn’s forecasts are correct, and not everyone would agree, but if correct the outlook for property prices could be brighter than generally thought.

The November growth figure of a 0.2% expansion in the services sector is encouraging but manufacturing saw negative production growth in the same month, partially offset by a positive contribution from mining and quarrying, that’s according to Office for National Statistics figures.

But plenty of headwinds still remain. The previous consensus in the financial markets that GDP would fall by around -0.3% for November, placing the economy on course for entry into a recession during the final quarter, shows the unpredictability of these times.

View Full Article: House prices to fall by 10 per cent this year says bank boss…

How to sell your property at full price in a falling market

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If you are looking to SELL some of your properties this year, or if you are looking to BUY property this year, then you need to watch this brand new video.

As you know many landlords are looking to exit the property market and sell some

View Full Article: How to sell your property at full price in a falling market

More people than ever before are looking to rent a home

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Propertymark has revealed its concerns and opportunities for landlords, buyers, tenants, sellers and investors in 2023.

And its annual report highlights that more people than ever before are looking for a home in the private rented sector.

There’s also a prediction of a return to a buyer’s market by the end of the year.

View Full Article: More people than ever before are looking to rent a home

HMRC defends mortgage tax relief cuts as ‘fair’ in petition response

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A petition urging the reversal of the controversial Section 24 tax changes for landlords has received a written response from the government after reaching some 28,000 signatures.

Simon Foster’s e-petition now needs to reach 100,000 signatures to win a debate in parliament. The Midlands-based property investor wants the government to reinstate the ability of landlords to set the full amount of mortgage interest against rental income before tax is calculated. Announced by George Osborne in 2015, the tax relief was replaced by a basic rate reduction from their income tax liability for their finance costs of 20%.

Foster explains that as a small, well-established private landlord, he is now struggling to make any money from letting properties. “Unless the ability to offset mortgage interest against rental income is reinstated, I will – like many – be forced to sell my properties,” he adds. “This could reduce the number of properties available on the private rental market.”

HM Treasury response

HM Treasury has now added its response to his points. It says: “The Government recognises that the private rented sector plays an important role in the UK housing market and economy.

“However, the Government also has a responsibility to make sure that the income tax system is fair. Under the old system, residential landlords got relief on their finance costs (including mortgage interest payments) at their marginal rate of income tax, which meant that higher rate taxpayers got a more generous tax relief than those on lower incomes.

“To address this, and make sure that all residential landlords are treated the same by the income tax system, the Government phased in a set of reforms to restrict finance cost relief to the equivalent of the basic rate of income tax.

“The reforms mean that all residential landlords will now receive the same amount of relief. It also reduces the disparity in income tax treatment between homeowners and landlords.

“To be clear, these reforms do not mean that tax relief on mortgage interest has been abolished. Landlords are still able to claim an income tax reduction equivalent to basic rate tax relief on the finance costs of their rental property. Residential landlords also continue to be able to claim relief at their marginal rate of income tax on the day-to-day costs incurred in letting out a property, such as letting agent fees and replacing furniture.”

Readers can sign the petition here.

View Full Article: HMRC defends mortgage tax relief cuts as ‘fair’ in petition response