Unusual legal win by landlord shows appealing council fines can be worth it

admin    Uncategorized     agents

Landlords operating good-quality and well managed rented properties and who are of good character should fight unfair council fines for failing to licence properties, an unusual case has shown.

A virtual Tribunal hearing of landlord Chris Knight’s appeal against a £7,500 fine for non-compliance with the London Borough of Hackney’s selective licensing scheme saw judges reduce his fine to £2,400 after he argued that it was ‘too high’ at eight times the licencing scheme’s application fee, and that he operated the property at a loss after no increasing the rent since 2017.

Although the judges disagreed with these arguments, and Knight’s further point that he should have been warned that a fine was pending and that he wasn’t’ told Hackney operated a licencing scheme, he won a substantial reduction.

The saga began in March 2022 when council officers discovered during door-to-door enquiries that his two-bedroom apartment in Stoke Newington, North London (pictured), had not been licenced.

Reduced

Knight was told that a £7,500 fine would be payable but after he made representations, this was reduced to £5,000 as long as he applied for a licence within 28 days, which he did.

But the landlord, who represented himself at the Tribunal, held his nerve and appealed the fine, and the Tribunal has now reduced it.

This includes £1,000 in ‘mitigation’, a £2,000 reduction for the good condition of the property and his ‘good character’, a £1,000 reduction for applying for a licence promptly and a further reduction for his cooperation. If he now pays the fine promptly it will be reduced by 20% further, taking it to £2,400.

Read the judgement in full.

Image: Savills.com
   

View Full Article: Unusual legal win by landlord shows appealing council fines can be worth it

Landlord company registrations rise as many seek to avoid higher tax bills

admin    Uncategorized     agents

Higher taxes and the pandemic have significantly increased the number of landlords starting up limited companies rather than owning and operating properties personally, new research shows.

While some 15,800 landlord companies were launched in 2019, last year that figure was 28,130.

The study, which used Companies House listings and was commissioned by Easy Offices, also shows a significant increase in the number of younger landlords entering the fray via limited companies (107 in 2019 versus 1,178 last year) although the largest group are the over 50s who made up some 40% of last year’s total.

Younger landlords also tend to be urban and concentrated in London, Manchester, Birmingham, Leeds and Leicester. Easy Offices says these findings within the property sector are in line with wider research which suggests the pandemic was a catalyst for young people starting their own businesses.

A 2022 study that looked at some 2.3 million UK businesses across many industries showed the percentage of start-up owners aged under 35 had more than doubled since March 2020, rising from 16.4% to 34%. A similar study found that 11% of BTL properties are now owned through a corporate structure.

But unlike other industries, the jump in the number of limited companies has also been driven by HMRC’s changes to landlord tax via the ‘Section 24’ rules that saw tax relief on mortgage interest payments dramatically reduced for those owning properties personally.

The only way to avoid this punitive ‘tax on income rather than profits’ as it is called is to transfer BTL businesses to a limited company or, as these figures show, when starting up using such structures from the outset.

Bold steps

“This spike of new businesses following the pandemic shows how it drove a large number of people to take bold steps,” says John Williams (pictured), Chief Marketing Officer at Easy Offices.

“We have seen the number of sole traders and small businesses looking for office space leap year on year.

“This trend is based on a lot of more experienced workers leaving behind their white collar jobs with blue chip companies and looking to start their own ventures after the pandemic.

“It is the rise of the midlife entrepreneur, similar to that we saw in the aftermath of the Global Financial Crisis in 2008.”

Landlord firms as defined by Companies House are those who owners identify them as ‘letting and operating own or leased real estate’.

View Full Article: Landlord company registrations rise as many seek to avoid higher tax bills

More growth predicted for the UK’s holiday accommodation sector

admin    Uncategorized     agents

The UK’s holiday accommodation sector is poised for continued growth this year and offers savvy property investors an opportunity, one property development firm says.

Research from Stripe Property Group shows that despite experiencing a setback due to the pandemic in 2021 which saw the market decline by 24%

View Full Article: More growth predicted for the UK’s holiday accommodation sector

Tenants earning £30k are not eligible for affordable rent schemes

admin    Uncategorized     agents

Some London residents earning more than £30,000 are being excluded from so-called affordable rent schemes provided by social housing providers, the BBC reveals.

These schemes are designed to provide housing options below market rates for those with lower incomes.

View Full Article: Tenants earning £30k are not eligible for affordable rent schemes

20 years of property training experience and how you can access it at no cost

admin    Uncategorized     agents

Today I have released episode No200 of the Property Magic Podcast.

In the 200th Anniversary episode, I answer the frequently asked question: “Is now a good time to invest in property?”

I also share the changes I have seen happen over the past 20 years and my prediction for the next 20 years.

View Full Article: 20 years of property training experience and how you can access it at no cost

Free legal help offered to tenants facing eviction

admin    Uncategorized     agents

Tenants facing eviction in England and Wales can now get free legal advice – and access to a lawyer in court – from a new government-backed scheme.

Designed to help tenants avoid losing their home and from going through stressful and expensive court proceedings

View Full Article: Free legal help offered to tenants facing eviction

MARKET: Rents hit historic high of £1,367 a month as void periods plunge

admin    Uncategorized     agents

The average rent for a property in the UK has hit a historic high of £1,367 a month, helping push void periods between tenancies down to their lowest ever, an average of nine days.

These extraordinary figures are within the latest Goodlord renting index, which uses data from tens of thousands of tenancies arranged though its platform each month.

Its average national rent figure of £1,367 is the highest level ever recorded by the Index and is 9.4% higher than the previous record, set in September 2022, of £1,249.

It is also 19% higher than the month before and 10% higher year-on-year.

These figures will prompt campaigning groups to warn the government, as they have before, that the private rented sector is dangerously unbalanced, over-run by a glut of tenants unable to get on the property ladder and dogged by stock levels reduced by more landlords than usual exiting the sector.

Staggering

“This month’s numbers are quite staggering,” says William Reeve, CEO of Goodlord (pictured).

“In July we do usually expect to see an increase in rents and a reduction in voids – and all indicators pointed to a particularly red hot summer for the rental market, if not the weather.

“So while the 10% year-on-year increase is a big shift, the sharp drop in void periods is also particularly surprising. 

“Digging into the data, we can see a large number of multiple occupancy student lets being confirmed during July, which has pushed up average prices in key regions such as the North East and South West.

“Traditionally, rental costs continue to increase until September before cooling off in the autumn, which could mean these aren’t the last records we’ll see broken before the year is out.”

View Full Article: MARKET: Rents hit historic high of £1,367 a month as void periods plunge

OPINION: Is it fair that councils are ‘poacher and gamekeeper’ in housing?

admin    Uncategorized     agents

There is a burning issue within the rented homes market that is grossly unfair on private landlords and that is never discussed by politicians or the trade associations that operate within it.

The issue is that many local councils who regularly take private landlords to court or fine them over their poor property management practices are all too often themselves guilty of similar crimes and misdemeanours.

One obvious and recent example is Camden Council. It has recently been investigated by the Regulator of Social Housing after it was fined £500,000 over a fatal fire at a Hampstead property in November 2017.

The investigation discovered that over 9,000 fire remedial actions are currently overdue, just under 400 of which were deemed “high-risk”.

Also, a third of the fire safety jobs should have been completed within 10 days and the remainder in 30 days.

This is the same council that only a month ago took a landlord operating an HMO within its boundaries to court over fire safety breaches.

The court heard that the landlord, Monsoon Properties Ltd, had admitted violations relating to a range of issues at the flat in London’s Tavistock Place.

Inadequate

This included inadequate fire detection system, obstructions to the means of escape, defective fire doors, defective oven and hob and smashed wall tiles.

Highbury Corner Magistrates Court fined the landlord £10,000 for each breach of regulations, as well as costs of £7,020 and a £12,000 surcharge – or nearly £50,000 in total.

It seems extraordinary that Camden can be both poacher and game-keeper in this way – although it is not alone in this regard.

Nevertheless, Camden is particularly keen on fining rogue landlords, and last year it announced it had secured four banning orders against four after they were found to be letting an unlicensed and unsafe home in Kilburn.

This is course needs to happen – those who ignore their responsibilities or wilfully dodge them when operating PRS properties should be punished.

But when councils like Camden do the same thing, none of the property managers within their housing teams lose their jobs, do they?

Justice imbalance

This disparity in levels of justice for the same crimes cannot go on particularly when private landlords already face several other unfair rules such as being taxed on their turnover, not profits, unlike other businesses.

Landlords of all kinds whether in the public or private domain should operate on the same playing field and face the same consequences for illegal or irresponsible behaviour.

And perhaps more importantly, the organisation that chases down bad landlords locally should not be property managers themselves.

We need an independent national housing ‘police force’ backed up by a specialist property court to solve this situation.

Nigel Lewis is the editor of LandlordZONE>

View Full Article: OPINION: Is it fair that councils are ‘poacher and gamekeeper’ in housing?

LATEST: NW council to double size of selective licencing scheme

admin    Uncategorized     agents

Two selective licencing schemes operated by Wirral Council in and around Birkenhead are to be renewed with a further two schemes about to be launched following a consultation.

The additional areas added by the council mean an almost doubling of the number of streets in the area where landlords will have to licence their rented properties, a council meeting at its town hall (pictured) has decided.

Wirral’s plans, which are now open for consultation, are part of a growing trend for councils to extend existing selective licencing schemes on renewal at the end of their five-year period. This includes in neighbouring Liverpool, where a huge scheme covering some 45,000 properties began last year.

Unusual

But the council is unusual because it is promising to charge a lower licencing fee to landlords for the enlarged set of schemes.

A council spokesperson tells LandlordZONE that: “The exact fee hasn’t been determined yet but the [consultation] information says [that] the council proposes to recover some costs by charging a licensing fee.

“The cost for a licence has reduced since the initial scheme and the council will continue to work hard to streamline costs for future designations and keep the fee as low as possible.”

Selective licencing began in the area during 2015 but the council has been slowly expanding coverage since to include some 3,500 licences.

The areas within the existing schemes to be renewed are Bidstone & St James West and Birkenhead West while the new areas cover Egremont North and Secombe St Paul’s.

Decent homes

Chair of Economy, Regeneration and Housing Committee, Cllr Tony Jones (pictured), said: “Selective Licensing is about making sure people live in decent homes.

“We know that most landlords take their responsibilities seriously, but some others profit from renting out homes which are unacceptable and not fit for purpose – and they are the ones we are determined to target.

“The use of Selective Licensing will help us in tackling rogue landlords and protecting tenants in Wirral.”

Landlords affected by the renewal and extension plans in the area can find out more information on the council’s consultation website.

View Full Article: LATEST: NW council to double size of selective licencing scheme

Call for financial help for landlords to carry out energy improvements

admin    Uncategorized     agents

Rightmove says that just 40% of homes for sale and 50% of homes for rent on its platform currently have an energy performance certificate (EPC) rating of C or above.

The rest have a rating of D or below and this has led the firm to urge more government incentives to encourage landlords and homeowners to invest in green improvements.

View Full Article: Call for financial help for landlords to carry out energy improvements