How we restructured to become debt free and super tax efficient

admin    Uncategorized     agents

On paper, my spouse and I were worth £3,000,000 but the reality was that we had no savings, no money whatsoever to live on after paying our tax bills, and this was despite having rental income of £300,000 a year coming in.

View Full Article: How we restructured to become debt free and super tax efficient

Quitting landlords could fuel further drop in house prices

admin    Uncategorized     agents

Buy-to-let landlords will influence house prices if a large number choose to sell up, according to rating agency Moody’s.

The firm is predicting that prices will fall by 10% in the next two years due to persistently high inflation and the recent spike in lending rates.

Rental income

Landlords can pass on the costs of complying with regulatory requirements to ensure rental income supports mortgage payments, but for an average mortgage, this would mean raising rents by almost 20%, according to Bank of England estimates, says Moody’s. Rents are currently increasing by about 5% while it points to anecdotal evidence that landlords are choosing to sell properties instead, putting additional downward pressure on house prices.

The turbulent mortgage market has seen HSBC announce a removal of all its new business residential and buy-to-let products, with the deals set to be available again on Monday, with potentially higher mortgage rates. Amid fears of a further interest rate rise, it follows a similar announcement made by Nationwide, which raised fixed rates for new borrowing to maintain sustainability. Nearly 10% of mortgages have been taken off the market due to concerns about increasing interest rates, according to Moneyfacts.

Limited edition

Meanwhile, Paragon Bank has launched a range of limited edition buy-to-let mortgages. Nil fee five-year fixed rates are available for those purchasing or re-mortgaging single self-contained properties, with rates starting at 6.35%, or HMOs at 6.60%. Alternatively, landlords can choose a five-year fixed rate with a flat fee of £2,995, with rates starting at 6.05% for SSCs, or 6.30% for HMOs. The five-year fixed-rate deals are available at 65% loan-to-value on loans up to £500,000.

Commercial director Louisa Sedgwick says: “We’ve listened to brokers who have told us that nil and fixed fee options should appeal to landlords wanting higher loan amounts, up to £500,000, alongside the certainty of fixing rates for five years.”

View Full Article: Quitting landlords could fuel further drop in house prices

Holiday home owners top the rental income chart

admin    Uncategorized     agents

The average annual holiday let income exceeded buy-to-let income for the first time in 2020-21, reaching £15,600 compared with £13,400, according to HMRC.

Ten years ago, holiday lets generated about £9,600 a year compared with £12,800 for buy-to-let but the gulf has grown wider, pushing holiday let income up by an average of 63% in the past decade compared with just 5% for buy-to-let.

Available data

A Freedom of Information request by Hamptons reveals that 63,000 individuals (rather than a company) received income from 65,000 furnished holiday let properties in the UK according to the latest available data — up from 46,000 receiving income from 50,000 properties in 2011-12.

It also wanted to test the theory that some longer-term landlords had moved across to the short-let market because it was more lucrative. The results show that while some have, the numbers are still fairly small – just 1.5% of all landlords are also holiday let owners, up from about 1.3%.

However, the figures will no doubt fuel critics’ argument that investing in holiday properties is driving up prices in rural hotspots and creating a chronic shortage of rental properties. Six mostly Labour MPs are sponsoring an Early Day Motion that would establish a Short Term Holiday Let Licensing Scheme across England.

Business rates

For a property to qualify as a self-catered holiday let in England – let for at least 70 nights a year and available for at least 140 — owners can switch from paying council tax to business rates. However, if their annual business rates bill is less than £12,000 and they only rent out one property, they pay no tax.

David Fell, a senior analyst at Hamptons, says the number investing in holiday lets rose dramatically during the pandemic because so many more people were confined to staycations as a result of international travel restrictions. “While Covid undoubtedly distorted the market, the longer term upward trend in revenue predates Covid, and it’s a trend the government has been increasingly worried about,” he adds.

View Full Article: Holiday home owners top the rental income chart

Should Landlords Sell Their Buy-To-Let Properties in 2023?

admin    Uncategorized     agents

The buy-to-let market has long been an attractive investment avenue for those seeking steady income, but the increasing burden on landlords from legislative changes, market conditions and financial burdens are causing many to sell up. We’ll explore some of those factors to help landlords make an informed decision as to whether to sell or retain buy-to-let property.

A Changing Legislative Landscape

In recent years, the regulatory environment surrounding the buy-to-let market has become increasingly stringent. Landlords face several changes:

EPC Target Changes

As part of the UK government’s commitment to achieving net zero emissions by 2050, it has set new Energy Performance Certificate (EPC) targets whereby landlords must upgrade the energy efficiency in their buy-to-let properties. At present, properties need an (EPC) rating of at least ‘E’ to be legally let. But, starting from 2025, properties must attain a minimum EPC rating of ‘C’. This rule change will initially affect new tenancies, encompassing all tenancies from 2028.

The Renters Reform Bill

The Renters Reform Bill represents the most significant potential legislative change in the private rented sector in decades. A government white paper released in June 2022 outlined the contents of the Bill, which is now going through parliament and includes:

• Scrapping of Section 21 evictions
• Introduction of periodic tenancies
• Prohibition of blanket tenant bans
• Creation of a landlord ombudsman and property portal

These changes will inevitably lead to increased costs, reduced profitability, and extra administrative burdens for landlords. So, it’s no surprise then that more landlords are selling their buy to let properties than buying.

Additional Financial Burdens

Although there are benefits of owning a buy-to-let – a steady rental income and property appreciation over time – recent financial fluctuations have meant landlords have had to bear additional burdens that impact their profitability.

Increasing Interest Rates

Rising interest rates, which are predicted to reach upward of 5% by autumn 2023, will consequently affect mortgage rates. This will hit the two thirds of landlords reliant on a mortgage, meaning those landlords planning to refinance their buy-to-let properties in 2023 should expect higher costs.

Rental Market Stability

The stability of the rental market is a significant factor to consider. Shifting economic conditions, namely the cost-of-living crisis, have resulted in financial strain for renters at a time when landlords need to put up rental prices. This can lead to high tenant turnover, which involves additional costs and expensive vacant periods.

Capital Gains Tax

Recent years have witnessed substantial appreciation in the property market, providing landlords with the opportunity for significant gains when selling their buy-to-let properties. But, the decision to sell a buy-to-let may not be as financially rewarding as expected as landlords may be subject to capital gains tax when selling a rental property for a price higher than the initial purchase cost. Changes to the tax-free allowance for capital gains tax were implemented in April 2023, whereby the allowance of £12,300 per person was replaced by a new allowance of £6,000. From April 2024, this allowance will decrease to £3,000, which means that landlords who decide to sell their properties in the new tax year might face higher capital gains tax payments.

When considering whether to sell or hold onto a buy-to-let property, landlords must assess its financial viability and evaluate their own specific circumstances. Factors such as rental income, expenses, mortgage rates, and potential returns should be carefully weighed against increasingly stringent legislative changes. For tips and advice on selling a buy-to-let property, check out www.quickmovenow.com/advice/selling-a-buy-to-let-property

View Full Article: Should Landlords Sell Their Buy-To-Let Properties in 2023?

Landlord Crusader: Why we shouldn’t keep quiet about the Renters Reform Coalition

admin    Uncategorized     agents

I can’t keep quiet! Two stories on the same day on Property118 highlight what is wrong with the private rented sector – and if everyone concerned took a step back to understand the other side’s point of view, it would make everything a lot better.

View Full Article: Landlord Crusader: Why we shouldn’t keep quiet about the Renters Reform Coalition

PRS landlords feel ‘demonised’ by the media

admin    Uncategorized     agents

A staggering 81% of landlords believe that mainstream media coverage of the buy-to-let market is unjust and inaccurate, research has found.

The Landbay quarterly landlord survey reveals that despite the ever-growing demand for rental properties

View Full Article: PRS landlords feel ‘demonised’ by the media

Increasing the rent – how do I go about it?

admin    Uncategorized     agents

With increasing costs, inflation hovering around the 10 per cent mark and mortgage rates approaching 6 per cent there’s lots of talk about increasing rents.

Many landlords are unable to absorb these extra costs without going into losses, so for them there’s little choice, they have to pass on some of these extra costs. For those landlords with deeper pockets, or those with little or no mortgage repayments to make, they can perhaps absorb some or all of the extra costs. But this is not always the best choice to make.

This article refers to English law. It is not a definitive interpretation of the law. Every case is different, rules change over time and only a court can decide -always seek expert advice before taking action or not.

Two schools of thought

The choice as to whether to increase rents or not during the course of a tenancy comes down to a landlord’s preference:

(1) landlords are often nervous about losing a good tenant if they put the rent up, and some leave the rent fixed, but with inflation so high that no longer seems a good idea. Tenants detest a big jump in rent if it falls too far behind and even though they may have had the advantage of a low rent for years, they always blame the landlord for a big increase.

A recent case reported by the iNewspaper stated:

‘When Zita Zutic Konak’s two-year lease on her north London flat was approaching renewal in March this year, she got a call from her property manager. They told her the rent on the two-bedroom home, which she shared with her husband and three-year old daughter, would be going up from £1,800 to £2,700 – an increase of 50 per cent.’

“I was flabbergasted and just so angry,” she said. “The woman explained to me that this was what other units in the building were going for, but for us, that price was just absolutely not possible.”

Clearly, a 50 per cent rise is stretching a rent rise to the limit and is arguably unreasonable, it’s not surprising the tenant decided to leave.

(2) Some landlords apply a small annual increase. This is far more acceptable and something tenants will more readily accept and even expect it. They get used to an annual increase along with all their other rising costs, and so long as this is not extortionate, it will rarely trigger a move.

Market rent or index linked?

There are broadly two methods of arriving at a fair rent:

(1) is to establish the going market rate for the location and the type of property through comparisons, either by consulting a local letting agent or by keeping an eye on local ads to get an idea what similar rentals are going for. Keeping the rent slightly below the market average will usually prevent your tenant from making a move.

You’ve got to remember that if a tenant moves out you could have a void period, repairs and decorating to carry out, and your time and all the administration work involved in selecting a new tenant, plus setting up a new tenancy, and perhaps a finder’s free from your letting agent to pay. In addition, a new tenant is an unknown quantity when compared to the one you’ve already got.

(2) the second method is to have a clause in your letting agreement fixing the increase to the cost of living index (CPI or RPI). The problem with this method is that market rents don’t usually keep pace with inflation, usually lagging this by some way, so strictly applying this method will take your rent level way above the local market rent.

Increasing the rent

If you decide to increase your rent, first determine the demand for rentals in your location. High demand for properties in an area means it is safer to go for a higher rent without the fear of losing a good tenant. Secondly, try to decide what is a fair increase as explained above. If your rents have fallen a long way behind the market level it may be prudent to increase by a smaller amount each year, rather than trying to catch up all in one go, as in the example cited above.

The rent increase rules

There are certain rules and procedures a landlord or her letting agent must follow when increasing the rent. Section 13 of The Housing Act 1988 provides the legal framework for when and how to increase rent and you have basically three ways to go about this:

1. By speaking to your tenant and negotiating a fair increase which is acceptable to both parties.
2. The increase is set-out in the tenancy agreement which binds both parties to a formula
3. Using a section 13 notice as set out in the Act.

By Negotiation is the best method, so that you can explain to your tenant the rising costs involved, your own circumstances as a landlord. Your tenant may have been living in the property for x number of years so you need to explain that it is only reasonable to expect an increase in the rent to a new level.

You cannot impose a rent increase on your tenant using this method. Arbitrarily telling your tenant that the rent will increase by x amount is not acceptable, the rise must be agreed.

If you can come to an agreement in this way this needs to be evidenced to avoid any further legal action, so have a duplicate form or simple letter to hand setting out the increase and get your tenant to sign, agreeing to the new rent and keeping one copy for yourself.

The second method, is if the increase is set out in your agreement, then both parties are aware of what will happen. Any tenant knows that he cannot remain in the property without paying a higher rent as time goes on.

A typical rent increase clause may read something like:

“The Landlord may increase the Rent after the Expiry of the fixed term of this Agreement, by giving the Tenant at least one months’ notice in writing prior to a Rent Payment Day specifying the amount of the new rent. The Landlord will not increase the Rent during the fixed term of the tenancy.”

Another option is to give your tenant another fixed term by signing a new tenancy agreement at the higher rent. It means that anything stated in the old tenancy no longer applies and the parties can agree a higher or lower rent in the new tenancy.

If there is a rent increase clause in the tenancy involving the cost of living index, and it takes the rent out-of-line with the market, there is no reason why the landlord or agent cannot negotiate a surrender and re-grant of the tenancy at any time.

An important point to note about rent increase clauses is that when the tenancy becomes a periodic one, any increase clause does not survive the transition into a statutory periodic tenancy. If you have a rent increase clause in your fixed term tenancy, as soon as the tenancy goes beyond the fixed term you will no longer have the right to use the built-in clause.

Using the Section 13 Notice

Section 13 of the Housing Act 1988 is a statutory mechanism in the Act that enables the rent to be increased for any type of assured tenancy. There are a number of specific rules to comply with:

The section 13 notice applies only in periodic tenancies, it cannot be used during a fixed term tenancy. If the fixed term is very long, because of this it is important to include some kind of rent increase mechanism in the tenancy agreement, most standard agreements will include one of these. If this is absent, unless the tenant voluntarily agrees to an increase, it will not be possible to increase the rent during the whole fixed term.

A section 13 notice cannot be used where there is a contractual periodic tenancy that contains a rent review clause. However, where a fixed term tenancy becomes a statutory periodic tenancy a rent review clause will no longer apply. To increase the rent the landlord or agent must then use the section 13 procedure or obtain the tenant’s agreement.

A section 13 notice is a prescribed form, that means the wording must comply with the Act as it dictates what wording needs to be on the notice (there is a free Form 4 notice online – see below) and what it must look like. When a section 13 notice is served the notes explain to the tenant how to fill in the form and it also explains to the tenant how to go about appealing the rent increase.

Once served, a section 13 notice cannot be used a second time until after 12 months. The first time can be served immediately after the fixed term. So with a six month tenancy, you can serve a section 13 notice at the start of a statutory periodic tenancy. But if the tenancy is a periodic one from the outset, the 12 month limit applies from the start of the periodic tenancy.

The Section 13 Notice – prescribed form

The landlord serves a notice of increase of rent in the prescribed form (Form 4). This includes information for the tenant advising them of their right to refer the increase to a https://www.gov.uk/courts-tribunals/first-tier-tribunal-property-chamber.

Once the notice has been served with the proposed increase in rent it cannot take effect earlier than a minimum period set out in the Act: for a year’s fixed term that is six months, less than a month, it is one month and for a tenancy of a month or more (but less than a year), it is one period of the tenancy. The increased rent will apply from the expiry of the notice period, unless either the tenant refers the notice of increase to the tribunal or landlord and tenant agree to a different rent.

When the increase is referred to the First-tier Tribunal it must be done before the notice period expires on a prescribed form. The tribunal will determine a market rent for the property, a rent that could reasonably be expected to be obtained in the open market for a similar property let on similar terms.

The new prescribed rent will apply from the date specified in the landlord’s notice of the increase, however, the tribunal has the power to apply the rent from a later date if this would otherwise cause the tenant undue hardship.

Landlords have been increasing rents

The Office for National Statistics’ data shows that average PRS rent increased on average by around 4.8 per cent in the year to April 2023, with a rise of 5 per cent in London. However, this is the average, so some tenants are experiencing increases far higher than this depending on supply and demand in the area.

If you want to keep your rents in line with your costs it is generally good, in a situation where inflation is at a high level, to try keep your rents at or near the market level, otherwise they will fall too far behind and that makes it even more difficult to recover lost ground.

The Renters (Reform) Bill

The Bill has yet to become law, but there will be changes. The new Act will remove the fixed term tenancy. It will end the use of rent review clauses and only allow rents to increase once per year. Rent increases will be through one mechanism, replacing the existing section 13 process under the Act, and landlords will have to give 2 months’ notice of any rent change. That’s how things stand at this time unless there are changes as the Bill passes thorough Parliament.

The Renters’ (Reform) Bill white paper said it plans to end the use of rent review clauses, “preventing tenants being locked into automatic rent increases that are vague or may not reflect changes in the market price” and it goes on the say that “any attempts to evict tenants through unjustifiable rent increases are unacceptable”.

In cases where increases are disproportionate, the Government says it will “make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal” and it will “prevent the Tribunal increasing rent beyond the amount landlords initially asked for when they proposed a rent increase”.

View Full Article: Increasing the rent – how do I go about it?

TOM’S GUIDES: Increasing the rent – how do I go about it?

admin    Uncategorized     agents

With increasing costs, inflation hovering around the 10 per cent mark and mortgage rates approaching 6 per cent there’s lots of talk about increasing rents.

Many landlords are unable to absorb these extra costs without going into losses, so for them there’s little choice, they have to pass on some of these extra costs. For those landlords with deeper pockets, or those with little or no mortgage repayments to make, they can perhaps absorb some or all of the extra costs. But this is not always the best choice to make.

This article refers to English law. It is not a definitive interpretation of the law. Every case is different, rules change over time and only a court can decide -always seek expert advice before taking action or not.

Two schools of thought

The choice as to whether to increase rents or not during the course of a tenancy comes down to a landlord’s preference:

(1) landlords are often nervous about losing a good tenant if they put the rent up, and some leave the rent fixed, but with inflation so high that no longer seems a good idea. Tenants detest a big jump in rent if it falls too far behind and even though they may have had the advantage of a low rent for years, they always blame the landlord for a big increase.

A recent case reported by the iNewspaper stated:

‘When Zita Zutic Konak’s two-year lease on her north London flat was approaching renewal in March this year, she got a call from her property manager. They told her the rent on the two-bedroom home, which she shared with her husband and three-year old daughter, would be going up from £1,800 to £2,700 – an increase of 50 per cent.’

“I was flabbergasted and just so angry,” she said. “The woman explained to me that this was what other units in the building were going for, but for us, that price was just absolutely not possible.”

Clearly, a 50 per cent rise is stretching a rent rise to the limit and is arguably unreasonable, it’s not surprising the tenant decided to leave.

(2) Some landlords apply a small annual increase. This is far more acceptable and something tenants will more readily accept and even expect it. They get used to an annual increase along with all their other rising costs, and so long as this is not extortionate, it will rarely trigger a move.

Market rent or index linked?

There are broadly two methods of arriving at a fair rent:

(1) is to establish the going market rate for the location and the type of property through comparisons, either by consulting a local letting agent or by keeping an eye on local ads to get an idea what similar rentals are going for. Keeping the rent slightly below the market average will usually prevent your tenant from making a move.

You’ve got to remember that if a tenant moves out you could have a void period, repairs and decorating to carry out, and your time and all the administration work involved in selecting a new tenant, plus setting up a new tenancy, and perhaps a finder’s free from your letting agent to pay. In addition, a new tenant is an unknown quantity when compared to the one you’ve already got.

(2) the second method is to have a clause in your letting agreement fixing the increase to the cost of living index (CPI or RPI). The problem with this method is that market rents don’t usually keep pace with inflation, usually lagging this by some way, so strictly applying this method will take your rent level way above the local market rent.

Increasing the rent

If you decide to increase your rent, first determine the demand for rentals in your location. High demand for properties in an area means it is safer to go for a higher rent without the fear of losing a good tenant. Secondly, try to decide what is a fair increase as explained above. If your rents have fallen a long way behind the market level it may be prudent to increase by a smaller amount each year, rather than trying to catch up all in one go, as in the example cited above.

The rent increase rules

There are certain rules and procedures a landlord or her letting agent must follow when increasing the rent. Section 13 of The Housing Act 1988 provides the legal framework for when and how to increase rent and you have basically three ways to go about this:

1. By speaking to your tenant and negotiating a fair increase which is acceptable to both parties.
2. The increase is set-out in the tenancy agreement which binds both parties to a formula
3. Using a section 13 notice as set out in the Act.

By Negotiation is the best method, so that you can explain to your tenant the rising costs involved, your own circumstances as a landlord. Your tenant may have been living in the property for x number of years so you need to explain that it is only reasonable to expect an increase in the rent to a new level.

You cannot impose a rent increase on your tenant using this method. Arbitrarily telling your tenant that the rent will increase by x amount is not acceptable, the rise must be agreed.

If you can come to an agreement in this way this needs to be evidenced to avoid any further legal action, so have a duplicate form or simple letter to hand setting out the increase and get your tenant to sign, agreeing to the new rent and keeping one copy for yourself.

The second method, is if the increase is set out in your agreement, then both parties are aware of what will happen. Any tenant knows that he cannot remain in the property without paying a higher rent as time goes on.

A typical rent increase clause may read something like:

“The Landlord may increase the Rent after the Expiry of the fixed term of this Agreement, by giving the Tenant at least one months’ notice in writing prior to a Rent Payment Day specifying the amount of the new rent. The Landlord will not increase the Rent during the fixed term of the tenancy.”

Another option is to give your tenant another fixed term by signing a new tenancy agreement at the higher rent. It means that anything stated in the old tenancy no longer applies and the parties can agree a higher or lower rent in the new tenancy.

If there is a rent increase clause in the tenancy involving the cost of living index, and it takes the rent out-of-line with the market, there is no reason why the landlord or agent cannot negotiate a surrender and re-grant of the tenancy at any time.

An important point to note about rent increase clauses is that when the tenancy becomes a periodic one, any increase clause does not survive the transition into a statutory periodic tenancy. If you have a rent increase clause in your fixed term tenancy, as soon as the tenancy goes beyond the fixed term you will no longer have the right to use the built-in clause.

Using the Section 13 Notice

Section 13 of the Housing Act 1988 is a statutory mechanism in the Act that enables the rent to be increased for any type of assured tenancy. There are a number of specific rules to comply with:

The section 13 notice applies only in periodic tenancies, it cannot be used during a fixed term tenancy. If the fixed term is very long, because of this it is important to include some kind of rent increase mechanism in the tenancy agreement, most standard agreements will include one of these. If this is absent, unless the tenant voluntarily agrees to an increase, it will not be possible to increase the rent during the whole fixed term.

A section 13 notice cannot be used where there is a contractual periodic tenancy that contains a rent review clause. However, where a fixed term tenancy becomes a statutory periodic tenancy a rent review clause will no longer apply. To increase the rent the landlord or agent must then use the section 13 procedure or obtain the tenant’s agreement.

A section 13 notice is a prescribed form, that means the wording must comply with the Act as it dictates what wording needs to be on the notice (there is a free Form 4 notice online – see below) and what it must look like. When a section 13 notice is served the notes explain to the tenant how to fill in the form and it also explains to the tenant how to go about appealing the rent increase.

Once served, a section 13 notice cannot be used a second time until after 12 months. The first time can be served immediately after the fixed term. So with a six month tenancy, you can serve a section 13 notice at the start of a statutory periodic tenancy. But if the tenancy is a periodic one from the outset, the 12 month limit applies from the start of the periodic tenancy.

The Section 13 Notice – prescribed form

The landlord serves a notice of increase of rent in the prescribed form (Form 4). This includes information for the tenant advising them of their right to refer the increase to a https://www.gov.uk/courts-tribunals/first-tier-tribunal-property-chamber.

Once the notice has been served with the proposed increase in rent it cannot take effect earlier than a minimum period set out in the Act: for a year’s fixed term that is six months, less than a month, it is one month and for a tenancy of a month or more (but less than a year), it is one period of the tenancy. The increased rent will apply from the expiry of the notice period, unless either the tenant refers the notice of increase to the tribunal or landlord and tenant agree to a different rent.

When the increase is referred to the First-tier Tribunal it must be done before the notice period expires on a prescribed form. The tribunal will determine a market rent for the property, a rent that could reasonably be expected to be obtained in the open market for a similar property let on similar terms.

The new prescribed rent will apply from the date specified in the landlord’s notice of the increase, however, the tribunal has the power to apply the rent from a later date if this would otherwise cause the tenant undue hardship.

Landlords have been increasing rents

The Office for National Statistics’ data shows that average PRS rent increased on average by around 4.8 per cent in the year to April 2023, with a rise of 5 per cent in London. However, this is the average, so some tenants are experiencing increases far higher than this depending on supply and demand in the area.

If you want to keep your rents in line with your costs it is generally good, in a situation where inflation is at a high level, to try keep your rents at or near the market level, otherwise they will fall too far behind and that makes it even more difficult to recover lost ground.

The Renters (Reform) Bill

The Bill has yet to become law, but there will be changes. The new Act will remove the fixed term tenancy. It will end the use of rent review clauses and only allow rents to increase once per year. Rent increases will be through one mechanism, replacing the existing section 13 process under the Act, and landlords will have to give 2 months’ notice of any rent change. That’s how things stand at this time unless there are changes as the Bill passes thorough Parliament.

The Renters’ (Reform) Bill white paper said it plans to end the use of rent review clauses, “preventing tenants being locked into automatic rent increases that are vague or may not reflect changes in the market price” and it goes on the say that “any attempts to evict tenants through unjustifiable rent increases are unacceptable”.

In cases where increases are disproportionate, the Government says it will “make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal” and it will “prevent the Tribunal increasing rent beyond the amount landlords initially asked for when they proposed a rent increase”.

View Full Article: TOM’S GUIDES: Increasing the rent – how do I go about it?

Mixed messages make proposal timeline animal crackers

admin    Uncategorized     agents

Confusion surrounds the government’s plans to introduce ‘pets in lets’ measures, with conflicting messages coming from the DLUHC.

It has confirmed that the new system within the Renters (Reform) Bill, ensuring landlords do not unreasonably withhold consent when a tenant requests a pet in their home, will first apply to new tenancies and then later to any remaining existing tenancies. However, LandlordZONE has seen a recent email response from a DLUHC policy representative to a member of the animal rights/owners campaigning community revealing that measures will only apply initially to existing tenancies, with new tenancies exempted until landlords get used to the new rules.

Continued choice

The email explained: “The right to request a pet that landlords cannot unreasonably refuse will apply within tenancies – it will be an implied term of all assured tenancies (other than those which are exempted). Landlords will continue to have the choice about who they rent their property to at the outset of the tenancy.

“Although landlords will not need to provide a reason if they choose not to let to prospective tenants who own a pet, strengthening the rights of existing tenants to request a pet should lead to an increase in the number of ‘pet friendly’ properties. As landlords gain confidence in renting properties with pets and will not be able to unreasonable refuse a request once a tenancy has started, we hope they will be more open to considering prospective tenants with pets at the outset.”

Smooth transition

The DLUHC now tells LandlordZONE: “We will allow time for a smooth transition to the new tenancy system and ensure that all parties have sufficient notice of the changes. The new system will first apply to new tenancies and then later to any remaining existing tenancies.

“The new tenancy system, including the abolition of section 21 and move to periodic tenancies, will be implemented in two stages, thus giving landlords and tenants alike sufficient notice to implement the necessary changes.”

View Full Article: Mixed messages make proposal timeline animal crackers

Surveyors countrywide sympathise with landlords’ dilemma

admin    Uncategorized     agents

Almost two-thirds of surveyors have witnessed rising numbers of buy-to-let landlords looking to sell their properties.

The Royal Institute of Chartered Surveyors (RICS) reports that a similar number have seen a drop in the level of interest from new UK-based investors over the past six months. The body warns that along with higher mortgage rates, the Renters Reform Bill is pushing more landlords to quit the sector.

Eroded confidence

In its UK Residential Property Monitor for May, members across the country declare widespread sympathy for landlords and frustration at government policy. “Fear and lack of leadership from this government has further eroded confidence in the viability of this sector,” says Jason Coombes, at Cottons Chartered Surveyors in Birmingham. “Whilst we try to calm landlord clients, social and mainstream media fuel the panic caused by wave after wave of destructive legislation.”

“Government has been turning the screw on the PRS for years and recent media whispers of crisis are too little too late,” believes Neil Foster, at Hadrian Property Partners in Hexham. “It is a long road back from here to any chance of equilibrium between rental stock and demand.”

Landlords blamed

Stock levels continue to shrink as landlords dispose of their BTL investments, according to William Delaney, at Coopers of London Limited. “The dysfunctional court process in possession cases, egregious tax and compliance measures, and interest rates, are all taking their toll. No doubt landlords will then be blamed for soaring rents and lack of supply.”

It’s no better in Scotland, says Grant Robertson, at Allied Surveyors Scotland in Glasgow. “Rent freezes affect affordability and instead of flats changing tenants around the uni term, many are being offered to sale. The shortfall in student accommodation in Glasgow now looks apocalyptical through the summer for the start of term.”

View Full Article: Surveyors countrywide sympathise with landlords’ dilemma