Landlord Crusader: In the end, it was the Bank of England that broke the PRS

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As hardworking and worried landlords, we all know the buy-to-let market is facing a potential catastrophe of rising interest rates, tightening lending criteria and falling house prices.

That inevitably means many of us may find ourselves struggling to keep up with mortgage payments

View Full Article: Landlord Crusader: In the end, it was the Bank of England that broke the PRS

BREAKING: Landlords tell housing minister face-to-face that sector needs support

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Landlords in Wales have called for the country’s government to make more effort to encourage private investment in the sector during a face-to-face meeting with housing minister Julie James.

The National Residential Landlords Association (NRLA) has asked her government to exempt landlords from the higher rate stamp duty, overhaul or (it is hoped, reduce) the taxes they already pay, unfreeze LHA benefits rates and make low-interest financial support available to BTL investors via the Bank of Wales.

The recommendations are within a report launched this week by the National Residential Landlords Association (NRLA) called the State of the Welsh Private Sector.

It looks at supply and demand within the sector, the costs of upgrading properties to meet EPC minimum standards, and the effect of the country’s recently-introduce renting laws.

An event to present the report’s findings at the Welsh parliament organised by the NRLA was attended by James and the trade association’s chief executive Ben Beadle, among others.

Extra taxes

The recommendations come as landlords with properties in Wales have, like those in England, faced both extra taxes and new regulation, as well as plans to introduce rent controls – unlike in England.

Landlords in Wales must now comply with tighter operating rules following the introduction of the Renting Homes (Wales) Act including more pro-tenant eviction rules, as well as higher purchase taxes through the country’s Land Transaction Tax (LTT) or stamp duty.

The NRLA is hoping to persuade the Welsh government to take a more balanced approach to private landlords, and the report draws on data from several sources to try to establish what the PRS in Wales looks like now.

The Welsh Government’s response to the report is expected today and LandlordZONE will update this story once it’s received.

To download the full report PDF click here.

Pic credit: NRLA

View Full Article: BREAKING: Landlords tell housing minister face-to-face that sector needs support

LATEST: Section 21 evictions increasing as landlords quit sector, says Citizens Advice

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Nearly half of all Section 21 eviction notices have been prompted by landlords selling their properties, Citizens Advice has revealed.

It also says that it’s seen a ramping up of evictions by landlords using Section 21 notices, handling some 2,000 cases last month.

This is the highest level of activity Citizens Advice has seen during a single month and a 25% increase on the same month last year.

To date, 2023 has been a record year for people coming to the charity for help after being served a Section 21 notice, with a 9% increase in demand for support in the first five months of this year compared to the same period last year.

Ironically, the surge seen by Citizens Advice is likely to be down to the Government’s plans to abolish Section 21 evictions within the Renters Reform Bill going through parliament.

As LandlordZONE has reported before, this has led to some landlords seeking to exit the market before the Bill becomes law and, despite a ‘beefed up’ Section 8 notice process, evictions become lengthier and more expensive.

Despite this, Citizens Advice is worried that the strengthened Section 8 measures could still be used by landlords to “unfairly force tenants out of their homes”, it says.

“New grounds in the Renters Reform Bill will allow landlords to evict tenants just six months into a tenancy if they wish to sell a property or move family in,” it adds.

“Worryingly, the new rules won’t require landlords to give evidence they have followed through on this once a tenant has left.”

Warning

Citizens Advice is also warning landlords may use excessive rent increases as a way of forcing tenants out, and is urging the government to close these loopholes in the Renters Reform Bill “to give tenants the promised greater protection and security”, it says.

The charity is also calling for the length of time new tenants are protected from ‘no fault’ grounds for eviction to be increased from six months to two years, and for steps to be put in place to ensure landlords who claim to need to sell a property can’t rapidly re-let it.

Crisis

Paul Shamplina, founder of Landlord Action, says: “We are in a rental stock crisis and I’ve been calling this looming crisis for months and months, something Citizens Advice are confirming.

“We have seen as 91% increase year-on-year of landlords issuing accelerated proceedings and the number exiting the market is unprecedented. We’ll soon see more doing it as the Renters (Reform) Bill goes through parliament and the abolishment of Section 21 draws nearer.

“But we need to prevent a landlord panic, and it’s important that they can feel reasssured they will be able to repossess their properties where appropriate but, looking at what’s already going on within the County Courts including the ongoing bailiff shortage, that’s already difficult.

“My worry is that good tenants with excellent track records in rent payment will get caught up in this and may become more fearful of eviction, which is not a situation anyone wants.”

View Full Article: LATEST: Section 21 evictions increasing as landlords quit sector, says Citizens Advice

Extra costs and red tape hitting landlords hard, mortgage chief warns

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Politicians and lobby groups are likely to continue blaming private landlords for the housing shortage largely created by the hostile regulatory environment imposed by the same politicians who want even more draconian laws, finds a new report.

One of the most bizarre aspects of this increased regulatory burden is that both politicians and lobbyists seem oblivious to the fact that the resulting costs will ultimately fall on tenants, according to the Intermediary Mortgage Lenders Association (IMLA).

Its report reveals that the cumulative effects of regulatory and tax changes affecting landlords’ business models – together with the recent current sharp rises in buy-to-let mortgage rates – risk putting increasing numbers of private landlords out of business.

Bleak

The report points to the fall-out from rent controls in Scotland, where many landlords have expressed a desire to quit, remarking: “While such discriminatory policymaking continues, the outlook for the PRS and the tenants who depend on it to put a roof over their heads will be bleak indeed.”

With two-year fixed-rate BTL mortgage rates above average net yields, producing negative gearing, it explains: “The relatively sudden increase in funding costs is causing a significant proportion of buy-to-let landlords to fail affordability assessments when seeking to refinance loans. 

“Some may seek to exit the market altogether, while others may be obliged to sell some properties and re-balance the debt on their portfolios.”

Kate Davies (main picture), executive director at IMLA, adds that over the next few years we can expect landlord costs to keep on rising.

She says: “The focus now needs to be on prompting increased investment in the sector and supporting landlords, whose operating costs risk becoming unaffordable. “If we don’t get the balance right, the result will be higher rents, and lower availability of properties – both of which are bad news for tenants and landlords.”

View Full Article: Extra costs and red tape hitting landlords hard, mortgage chief warns

Council cracks down on illegal HMOs with surprise inspections

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Two unlicensed HMOs have been discovered during unannounced inspections by a council in the North, which says more ‘surprise visits’ are on the cards.

Officers from Ashfiield’s environmental health residential team discovered six men living in a small flat on Outram Street in Hucknall (main picture) who were being charged more than £1,500 a month by the landlord.

Another HMO in Hucknall had a bypassed electric meter and no fire detection in place. A third property inspected in Sutton was found to be overcrowded with no heating, and damp and mould problems (see pic).

Officers took immediate action to ensure the tenants were safe and are now investigating all the landlords.

Regulations

Councillor Tom Hollis, executive lead for strategic housing and climate change, says the team has information to suggest there are about 80 HMOs in the Nottinghamshire district that might need a licence or which are smaller HMOs not complying with regulations.

“Over the coming months officers will continue with investigations of suspected HMOs as part of our dedication to improve housing and safeguard our most vulnerable residents,” says Hollis.

He adds: “The vast majority of landlords in Ashfield operate responsibly, but there is a small minority that don’t, and this can put their tenants at risk and impact on the wider community.

“Overcrowded properties often house the most vulnerable residents in the community, and we are committed to targeting unscrupulous landlords and improving the lives for private tenants.”

Pics: Ashifeld Council/Google Streetview

View Full Article: Council cracks down on illegal HMOs with surprise inspections

Guaranteed rent firm takes down website after LandlordZONE probe

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A guaranteed rent firm has taken down its website after being exposed for using spurious claims about its connections with reputable bodies.

London-based UK Housing Group Ltd, which boasts of being, ‘the largest social housing agency in London and the Midlands’ featured out-of-date logos on its website and was set to be investigated by Trading Standards.

The firm included logos from the Residential Landlords Association, which become the NRLA more than two years ago, along with the Safeagent accreditation scheme logo, although the body says it is not accredited. UK Housing Group was using two of its logos which are no longer in use, says a spokeswoman.

Ceased

“They are displaying the London Rental Standard logo,” she adds. “This ceased to operate in 2017. There is also a logo for Ombudsman Services Property – this redress scheme used to operate in the PRS…however, they withdrew from the sector in August 2018.”

However, following the LandlordZONE investigation, the website is no longer working. The Safeagent spokeswoman adds: “It was our intention to contact Trading Standards but when we had looked back for a screenshot from their website, it was no longer active.”

LandlordZONE has tried to contact UK Housing Group which, according to Companies House, is now late in filing its annual accounts.

Read more about Trading Standards.

View Full Article: Guaranteed rent firm takes down website after LandlordZONE probe

The North West is England’s leasehold hotspot

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There has been a surge in leasehold property purchases in the North West of England – thanks to affordability and the region’s fast-growing cities, research reveals.

The findings from peer-to-peer real estate investment platform, easyMoney, show that nationally

View Full Article: The North West is England’s leasehold hotspot

Business ratepayers will have to report any changes, and annually, under new bill…

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The Non-Domestic Rating Bill going through Parliament (House of Lords) will require business ratepayers to report any changes and also report annually to the Valuation Office Agency (VOA).

These changes to the operation of business rates will apply to all organisations responsible for paying business rates and it is thought that the Valuation Office Agency will provide an online reporting system making the process as quick and simple as possible, though this is just another chore that tenants and landlords will be responsible for.

These changes will come as part of a package of reforms to modernise the business rating system, which will include reducing the time between rating revaluations from five years to three. It is thought that the reason for the necessity of ratepayers to update annually, and for any material changes, is to ensure that future revaluations will be easier for the VOA to perform and more accurate.

The move will be more of a burden for larger organisations with multiple properties, keeping track of up-grades and property maintenance. However, all ratepayers failing to report annually, even when there have been no changes, will be subject to a fine.

Business Rates payable for a property are determined by the Valuation Office Agency, a branch of HM Revenue and Customs HMRC). The rateable value is based on an assessment of the annual rent the property would let for if it were available to let on the open market, at the fixed valuation date.

The rates payable are calculated (see How your property is valued for business rates) by applying a multiplier, before any relief is applied. The multiplier is set each financial year by the government.

In 2022 the multiplier for premises over £51,000 rateable value was 51.2p. Until the revaluation 31 March 2023, the rateable values were based on a valuation date of 1 April 2015 and from April 2023, the rateable values will be based on a valuation date of 1 April 2021.

What are Business Rates?

Non-Domestic Rates, or business rates, are collected by local authorities in the same way that domestic Council Tax is collected and they contribute towards the cost of local services.

Under the business rates retention arrangements introduced from 1st April 2013, local authorities keep a proportion of the business rates paid locally. This provides them with a direct financial incentive to work with local businesses to create a favourable local environment for growth since authorities will benefit from growth in business rates revenues.

Unless the property is exempt from business rates, each non-domestic property has a rateable value which is set by the valuation officers at the Valuation Office Agency (VOA), an agency of Her Majesty’s Revenue and Customs. The office draws up and maintain a full list of all rateable values.

The rateable value of your property is shown on the front of your business rates bill, and there is online account access to report changes. This broadly represents the yearly rent the property could have been let for on the open market on a particular date. For the revaluation that came into effect on 1st April 2017, this date was set as 1st April 2015.

The valuation officer may alter the rateable value if circumstances change and hence the requirement in the new bill to complete a return. The ratepayer and others who have an interest in the property such as the landlord / owner can request a change to the value shown on the list if they believe it is wrong.

You can do this through a reformed online Check, Challenge, Appeal (CCA) process introduced in April 2017. The billing (local) authority will only backdate any business rates rebate to the date from which any change to the list is effective.

Ratepayers and owners can find a business rates valuation for a property by using the online Find a Business Rates Valuation service to find the ‘rateable value’ of a property in England or Wales.

This is the amount set by the VOA and used by the local council to work out the business rates bill for the property. Using this service you are also able to check the rateable value of similar properties and see how the rateable value was calculated.

Appeals

If you disagree with any decision the VOA makes about your business rates you can appeal against it. But you can only appeal under certain circumstances:

• you are responsible for business rates on a property
• a decision the VOA made is wrong
• the amount you are asked to pay is wrong, for example, if you think a relief or discount should be applied.
• the date given on a completion notice is wrong
• rateable value appeals are done online, as above of through the Valuation Office Agency on 03000 501501.

If you disagree with the VOA decision after a review, or you do not hear from them within two months, you can appeal to the Valuation Tribunal Service. You will need to fill in a Valuation Tribunal Service appeal form which you can download or complete online.

The Non-Domestic Rates Bill 2023

The Non-Domestic Rating Bill 2022-23 had its First Reading in the House of Commons on 29 March 2023. Second Reading 24 April 2023 and it is currently passing through the House of Lords. The Bill, and its explanatory notes, can be found on the Parliamentary website above.

Following a consultation process the new Bill aims to modernise and make a number of technical changes to the non-domestic rating system, better known as ‘business rates’. The majority of the changes have been the subject of Government commitments from 2021 and 2022. These commitments include:

• The power to introduce ‘improvement relief’ – intended to comprise a twelve-month grace period after a property has been improved, during which any rise in business rate liability consequent to ‘qualifying Improvements’ will not apply;
• Introducing business rate relief for low carbon heat networks;
• Introducing improvement relief and charitable relief for the central rating list;
• Introducing three-yearly business rate revaluations in place of the previous pattern of five-yearly revaluations;
• Removing the legislative requirement for transitional relief schemes to be revenue-neutral;
• Permitting the government to adjust the central rating list by means of a direction instead of requiring secondary legislation;
• Permitting the VOA to disclose analysis of rental information to ratepayers, to enable ratepayers to understand how their rateable value has been calculated;
• Permitting the VOA to disclose valuation information to Northern Ireland rating officials (closing a gap in existing legislative provisions);
• Creating a duty on ratepayers to provide information to the VOA regarding properties in respect of which they are liable for business rates, permitting the VOA to impose financial penalties when a ratepayer provides no information or misleading information, and creating a new criminal offence where false information is provided;
• Providing that property valuations cannot take account of the effects of legislation, advice or guidance between revaluations;
• Adjusting the way in which the small business multiplier and standard multiplier are calculated.

  Most of this Bill applies to England only though some parts will extend to England and Wales. Clause 11 extends also to Northern Ireland. None of the Bill extends to Scotland.

More information about the basic operation of the business rates system can be found in the House of Commons Library briefing paper Business rates.

View Full Article: Business ratepayers will have to report any changes, and annually, under new bill…

Less that 20% of PRS homes within LHA rates reveals shocking research

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Fewer than one in five private rental properties in England were within the Local Housing Allowance (LHA) rates last year, according to new joint research by the Chartered Institute of Housing and Shelter.

The groups say the average renter now faces a £151 monthly shortfall because the allowance fails to cover their costs – with the figure set to rise even further.

The LHA, which is set by the Valuation Office Agency, determines how much housing benefit some tenants receive towards paying their rent, but it has been frozen since 2019.

In every local area, LHA fails to cover the cost of the cheapest 30% of two-bedroom family homes, according to the research, and in some parts of the South West one in 10 or fewer two-bedroom rents are affordable.

The issue is not confined to the south however, as there are low numbers of affordable two-bedroom rents in the north too; just 9% in Leeds, 10% in Bolton and 5% in Tameside.

Huge shortfalls

Charlie Berry (pictured), policy officer at Shelter, says these huge shortfalls leave private renters at high risk of going into rent arrears and push families towards homelessness.

“With fewer and fewer affordable private rentals for people on housing benefit and a severe shortage of social housing, we are sadly left with a homelessness crisis,” she adds.

“The evidence is clear: the government must end the damaging freeze to local housing allowance which is leaving low-income families with nowhere they can afford to call home.”

Earlier this year, the NRLA criticised the government for its complacent attitude to the LHA freeze and its effect on both tenants and landlords, following an admission by Work and Pensions Minister Mims Davies MP that he had made no estimate of the number of people unable to meet their housing costs due to the freeze.

View Full Article: Less that 20% of PRS homes within LHA rates reveals shocking research

Leading property figure calls for ‘tenancy register’ in England and Wales

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The government has missed a trick by not introducing a tenancy register instead of an ‘anti-landlord’ landlord register, one property consultant has claimed.

Blackbird Real Estate founder Richard Berridge says the proposed register fails to see the bigger picture and suggests it should be replaced with something similar to that introduced by the Irish government’s Residential Tenancies (Amendment) Act 2019 which makes registering every private tenancy mandatory.

Updated yearly

As well as recording landlords’ details, this captures essential data about who is renting, how many people, their age, rent paid, tenancy start date, type of home, how many bedrooms and the size. Data must be updated yearly or when there’s a change in the tenancy and is uploaded to a portal.

“Such a register would also level the build-to-rent playing field,” explains Berridge. “It removes the thorny subject of IP, secretive behaviour or commercially sensitive data, and lays bare the performance of each building.

“It could also go some way towards creating a dynamic pricing model.”

The annual cost of registering a tenancy in Ireland is €40 and those landlords who have more than one property can take advantage of a ‘composite registration fee’ of €170 for up to a maximum of ten properties, he says.

Pay to register

“Landlords are going to have to pay to register under the current Renters Reform Bill proposals anyway.” 

Why doesn’t the UK government follow the lead of the Irish? asks Berridge, who insists there is still time to amend proposals.

“Perhaps government’s rather dismal record with anything to do with technology has something to do with it, or perhaps it’s a reluctance to do anything akin to what an EU country does. But unfortunately, I think it’s more to do with their somewhat blinkered view and a landlord hard-line approach.”

Berridge's comment have been made within BTR News.

View Full Article: Leading property figure calls for ‘tenancy register’ in England and Wales