Isle of Wight to slap council tax on holiday homes rented out under 70 days

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The Isle of Wight Council has vowed to charge owners of second homes and empty properties more council tax as soon as it gets the go-ahead from the government.

Its ruling Alliance Administration had suggested putting a 100% tax premium on second homes and empty properties, however councillors agreed to delay a decision on the amount until the council was given more powers.

The government has promised that from next year, councils in England will be able to double the standard council tax rate on any home left empty for longer than a year, rather than the current two years. 

Rented out

In England, second homes will need to be rented out for a minimum of 70 days per year to access small business rate relief, rather than paying council tax from next month. 

At a full council meeting, Conservative leader councillor Joe Robertson (main picture) said that the rationale behind the 100% figure had not been set out and needed to be backed by evidence, analysis and data, reports the Island Echo website.

Cabinet member for strategic finances, councillor Chris Jarman, said it had been included after the council’s finance officer suggested the authority should maximise its revenue at every opportunity, saying that it sent a strong signal to property owners of its intent to bring the charges in at the earliest opportunity, so that they did not risk missing out on a substantial amount of income.

Councillor Julie Jones-Evans questioned why the authority should not make the most out of second homeowners, especially after the authority charged Islanders the most it could in a council tax increase this year.

Read more about Jersey.

View Full Article: Isle of Wight to slap council tax on holiday homes rented out under 70 days

Jersey to charge double council tax on holiday homes rented out under 70 days

admin    Uncategorized     agents

The Isle of Wight Council has vowed to charge owners of second homes and empty properties more council tax as soon as it gets the go-ahead from the government.

Its ruling Alliance Administration had suggested putting a 100% tax premium on second homes and empty properties, however councillors agreed to delay a decision on the amount until the council was given more powers.

The government has promised that from next year, councils in England will be able to double the standard council tax rate on any home left empty for longer than a year, rather than the current two years. 

Rented out

In England, second homes will need to be rented out for a minimum of 70 days per year to access small business rate relief, rather than paying council tax from next month. 

At a full council meeting, Conservative leader councillor Joe Robertson (main picture) said that the rationale behind the 100% figure had not been set out and needed to be backed by evidence, analysis and data, reports the Island Echo website.

Cabinet member for strategic finances, councillor Chris Jarman, said it had been included after the council’s finance officer suggested the authority should maximise its revenue at every opportunity, saying that it sent a strong signal to property owners of its intent to bring the charges in at the earliest opportunity, so that they did not risk missing out on a substantial amount of income.

Councillor Julie Jones-Evans questioned why the authority should not make the most out of second homeowners, especially after the authority charged Islanders the most it could in a council tax increase this year.

Read more about Jersey.

View Full Article: Jersey to charge double council tax on holiday homes rented out under 70 days

Housing market shows signs of ‘green roots’

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As Spring approaches, one organisation says that the housing market is showing signs of ‘green roots’.

The Guild of Property Professionals says that despite the continuing cost-of-living crisis, other economic factors are improving and any possible recession appears to be less severe than was predicted.

View Full Article: Housing market shows signs of ‘green roots’

Landlord’s troubles just go from one crisis the next…

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Home Reit, an investment trust landlord, was set-up to house Britain’s homeless. But the company has found itself running into increasing difficulties, with tenants’ complaints and failed rent payments, a negative short-seller’s report, a financial squeeze with falling stock prices and alleged criminal activities.

Home Reit was established around three years ago as a pioneer London stock exchange listed property fund (investment trust) specialising in providing properties to charities tackling the UK’s homeless problem – people living on Britain’s streets.

With ambitious aims, broadly in-line with Government polity, its stated target was to raise a fund worth £1bn which would provide enough rental housing to take 10,000 people off the streets.

However, so far things have not worked out quite that way. The trust company has lurched from one crisis to the next, with rent arrears and scandal, and it has been the victim of a report questioning the company’s business model. This is a short seller’s report, short sellers make money by betting on falls in a company’s share price.

Stock market listing

Launched on the London Stock Exchange in October 2020, Home Reit managed to raise £240 million in what turned out to be the largest initial public offering of any investment trust in that year. The investment trust company went on to quickly source and invest the proceeds into around 500 multi-occupation properties, all for homeless people around the United Kingdom.

In September 2021 a further £350 million was raised and used to buy another 366 properties. Come 2022 yet another £150 million was raised through investors to purchase a further addition of 216 properties; thus making a portfolio of over 1,000 sheltered accommodation properties, which were let out to 126 charities, housing associations and local authorities.

Tenant complaints

Trouble for the Reit started initially with complaints about living conditions by its tenants and when at the end of 2022 a group of shareholders claimed the company had misled the investment market. They claimed that instead of catering purely for the homeless, the Reit was letting some of the properties to tenants who are not vulnerable and would not be eligible for government assistance – Housing Benefit payments.

The company vigorously denied the allegations but subsequently admitted that it did not have sufficient information to identify how much of its income came from Housing Benefit payments and how much came from other rent payments.

The Trust’s problems got much worse when more of it’s tenants complained about the living conditions in some of the properties, coming up with long lists of complaints ranging from roof leaks to black mould, and withholding rent payments because of this. One charity said it owed almost £1m in rent and predicted the bill would just keep growing as long as the complaints were not dealt with.

A housing charity involved said that the Reit’s model was not working for its tenants. The charity otherwise manages more than 400 homes with in excess of 1,000 beds throughout the UK and stated that, “We’ve got properties that are unfit for people to live in and we’ve had to shut some of them down because they are just not right for anybody, let alone a vulnerable person.”

“We’ve been promised an amount of money that hasn’t been delivered. We pay for refurbishments as best as we can, but we can’t pay for everything. Tenants are living in substandard accommodation,” said the charity.

Both private investors and some leading city institutions such as M&G and Scottish Widows invested client’s funds into Home Reit, largely because the business model has worked in other countries and there was a nice social theme to the model that promised to meet the needs of multiple stakeholders; central government, charities, housing associations, local government and the homeless themselves.

Home Reit has responded to criticism from it’s tenants, telling The Guardian Newspaper that:

“Home Reit is shocked to learn of the state of disrepair at [one particular] …property. When Home Reit acquired the property it was in fair condition although the building survey identified some areas that required addressing as part of the agreed refurbishment, and the company understood there was a plan in place by the tenant with the developer to undertake this.

“Home Reit has been trying to gain access to the property since August 2022 as part of our regular inspections and this has not been given. Now we have been made aware we are trying to find a solution to move the resident out of the property as soon as possible.”

The Short-seller’s report

Adding to Home Reit’s difficulties was the publication of a short-seller report which has attacked the company. But the directors have stated that the report is “inaccurate and misleading” and “based on mistaken assumptions, misinformed comments, and disputable allegations”.

Home Reit’s auditors were reviewing Viceroy Research’s (the reports authors) allegations that many of the tenants Home Reit houses “cannot afford rent, have not been paying rent, are in administration, are run by bad actors, or simply do not provide social housing services”.

Home Reit in turn said it would be publishing “a full and detailed response demonstrating the factual inaccuracies and selective use of information.”

The Viceroy Research’s report alleges that several of the trust’s largest tenants don’t appear to be paying any rent and that many of the charities using the trust’s services don’t have the ability to service the leases on a long-term basis.

The short-seller also claims that many of Home Reit’s properties were bought at an inflated prices thereby artificially inflating its net asset value (NAV) and with it a management fee paid to the fund manager Alvarium.

Directors and shareholders

One non-executive director at Home Reit is Peter Cardwell, talkRadio’s political editor and a former special adviser to Conservative government ministers.

The trust’s shares were suspended at the start of this year after the company missed a deadline to publish its annual accounts, following which its accountants BDO started “enhanced audit procedures” would be undertaken. The directors have also faced legal action from shareholders who were angered after the share price fell by nearly 70 per cent.

The latest news on Home Reit is that Edinburgh-based RM Funds, with the backing of major shareholders, is proposing to try and convince shareholders that it could take over as investment adviser for the sheltered housing group after the previous adviser, Alvarium, cut ties the trust as it became embroiled in the series of escalating crises.

One professional source with inside knowledge of the matter has stated that if the trust’s board does not take up RM’s offer there is a risk of a ‘fire sale’ of Home Reit’s portfolio that would entail the eviction of many vulnerable residents.

As of last week Home Reit said it was seeking to extend its deadline for takeover offers and to consider other submissions for a new investment advisor.

View Full Article: Landlord’s troubles just go from one crisis the next…

LATEST: London landlord duo convicted of £1 million benefits fraud

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A landlord couple have been convicted of a £1 million benefit fraud stretching over 20 years.

Emmanuel Bay, 68, and Nancy Bay, 67, of Sudbourne Road, Brixton (pictured), were found guilty of 21 offences between 1999 and 2018 under the Theft Act, Fraud Act and Forgery and Counterfeiting Act.

Their crimes relate to fraudulent Direct Payments claims in the name of Emmanuel, who failed to tell Lambeth Council that he had recovered from a previous illness and continued to claim support.

He also failed to declare the purchase of three properties in Brixton, each of which would have removed his entitlement to support. Nancy Bay bought two properties during the period.

Fraud

Emmanuel Bay received numerous Direct Payments that he was not entitled to along with payments from the Independent Living Fund and Department for Work and Pensions as a result of his fraudulent claims and failure to declare his recovery, adding up to £1 million.

A third co-defendant, Bruno Matudi, 68, of Libra Road, Plaistow, was convicted of two Fraud Act offences during the four-week trial at Inner London Crown Court.

The fraud came to light when council officers from adult social care became suspicious when visiting Bay to conduct a regular review of his claim, and referred the matter to the council’s counter fraud team.

Sentencing will take place on 30th March and Lambeth investigators will now progress action under the Proceeds of Crime Act to recover any losses and proceeds of crime from assets held by the couple.

View Full Article: LATEST: London landlord duo convicted of £1 million benefits fraud

Property Trader of The Year Saif Derzi

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In 2015, Saif Derzi bought his first property, he then went on to buy 2 more properties in 2017 and incorporated his property investment and trading business in 2018. Fast forward 5 years and he has bought and sold over 160 properties within SDGB Properties.

View Full Article: Property Trader of The Year Saif Derzi

Landlords fear the scrapping of s21 – and are selling up

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The potential scrapping of section 21 worries a third of landlords and is a ‘driving force’ behind growing numbers selling up and leaving the private rented sector (PRS), a survey reveals.

The findings from Mortgages for Business highlights that the potential reform of section 21 as part of the Renters Reform Bill could have a devastating impact on the PRS.

View Full Article: Landlords fear the scrapping of s21 – and are selling up

Am I too old to increase my wealth?

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Hello, Any suggestions/advice would be much appreciated. I have a property portfolio with low loan to value ( 20% ) and I am in my 70s and bored!!!

I don’t want to sell up and pay CGT, then IHT.

View Full Article: Am I too old to increase my wealth?

Did you know that Inheritance Tax is an ‘optional’ tax?

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To all Property118 and Alphaletz readers!

Due to the great feedback we’ve had from our last webinar with over 300 registrations, Alphaletz’ Richard Jackson has decided to hold another educational event featuring Mark Alexander.

Title: How can you eliminate Inheritance Tax with the right company structure?

View Full Article: Did you know that Inheritance Tax is an ‘optional’ tax?

Stop trying to win ‘cheap brownie points’ with renters, lender tells Government

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The Government must stop its ongoing and ‘irresponsible’ attempts to curry favour with tenants via its looming reform of the private rented sector, a buy-to-let lender has said.

Mortgages for Business boss Gavin Richardson (main picture) says that this continues, the country will suffer as the private rented sector — with its efficient use of property stock — dries up. 

He also says Government rhetoric on abolishing Section 21 evictions is ‘wrong’ including that their use is linked to a rise in homelessness, something Shelter regularly claims, although he admits they can be used for illegal purposes such as ‘revenge evictions’.

Cheap

“The government needs to stop trying to gain cheap brownie points by taking a pop at the private rented sector and needlessly spooking landlords.  It is the reason the government has lost the confidence of responsible landlords,” he says.

Richardson’s comments follow a poll of landlords by his company that reveals a third of landlords are more worried by Section 21 reforms than the stamp duty surcharge or the loss of tax relief.

The Government has said several times recently that it intends to abolish this kind of eviction route, which in the past many landlords have used to eject tenants who avoid paying the rent or who are involved in anti-social behaviour, with two months’ notice.

“Fears surrounding the scrapping of Section 21 are a driving force behind landlords not remortgaging and selling up instead” adds Richardson.

The NRLA recently said the Government must not proceed with its plans to abolish Section 21 evictions until the problem of anti-social behaviour by tenants is tackled.

View Full Article: Stop trying to win ‘cheap brownie points’ with renters, lender tells Government