Property expert predicts further house price falls

admin    Uncategorized     agents

Data from Halifax this week shows that the UK’s house prices fell at the sharpest pace in almost two years last month as rising mortgage rates and a gloomy economic outlook took their toll.

The figures show that house prices fell 0.4% in October – the third decline in four months.

View Full Article: Property expert predicts further house price falls

Tenant Welcome Pack – Help relationships get off to a great start

admin    Uncategorized     agents

A tenant welcome pack can help your tenant relationships get off to a great start.

Have you ever had a tenant contact you with unreasonable or minor requests that then escalate into much bigger issues, or just create tension between you?

View Full Article: Tenant Welcome Pack – Help relationships get off to a great start

More than a quarter of landlords want to sell – claim

admin    Uncategorized     agents

More than a quarter of landlords are planning to sell their rental properties because of the current buy to let environment, mortgage brokers say.

The research comes from broker forum, cherryplc.co.uk, which found that 28% of landlord clients are planning to sell properties

View Full Article: More than a quarter of landlords want to sell – claim

Minister reveals more details of looming PRS reforms during scrutiny session

admin    Uncategorized     agents

The government has vowed that the court process for possessions will be efficient and swift when it refines the much-expected PRS reforms.

Giving evidence to the Levelling Up, Housing and Communities committee on its White Paper, newbie Housing Minister Felicity Buchan (pictured) said it was working on proper guidance around dealing with anti-social behaviour that included local authorities and the police.

“We need to be in a position when someone’s committing ASB there’s an efficient way to remove them,” she said.

“We’re working with the judiciary and the Ministry of Justice to introduce reforms to make the possession process as efficient as it can be for landlords while protecting tenants’ rights.”

Housing court dismissed

While dismissing the idea of a housing court, she insisted that mediation would be a sensible route to follow, despite many of the MPs on the committee questioning whether this would be appropriate when dealing with potentially greater numbers of tenants challenging rent rises at tribunals, putting more strain on the courts.

On the proposed property portal, Buchan said there would be a small registration fee, while Charlotte Spencer, DLUHC director PRS and leasehold, revealed that it didn’t expect local authorities to inspect every single property.

“We would probably be relying on a degree of self-certification, then a random sample of inspections,” she said.

Selective armoury

Spencer added that selective licensing would still be needed as part of the tools in local authorities’ armoury but that it was keen to minimise requirements for duplication in the portal.

Committee chairman Clive Betts (pictured) said it was very sceptical that the justice system would deliver on the department’s intentions and challenged the minister over why affordability wasn’t addressed in the White Paper.

He also asked when the Bill was likely to be introduced. Buchan again dodged the question but insisted: “It’s a key priority of government – there’s a desire to get on with it.”

The committee’s report will be published early in the new year.

Watch the session in full.

View Full Article: Minister reveals more details of looming PRS reforms during scrutiny session

Leading landlords warn Government’s over periodic tenancy plans

admin    Uncategorized     agents

Landlords in Cornwall have warned that students will suffer a shrinking pool of accommodation unless the government allows them to have 10 or 12-month tenancy agreements.

In its response to the government’s White Paper on fairer renting, Cornwall Residential Landlords Association says a change to two-month periodic tenancies will leave them uncertain whether tenants will actually vacate.

Chairman Ruth Clarke (pictured) explains that the cost of halls of residence attached to colleges and universities are frequently more than equivalent properties in the private rented sector.

“Making tenancies more difficult may force landlords to leave this specialist market, discriminating against the vulnerable and those from ethnic minorities who may be less likely to be able to afford to continue with their education,” she says.

The group adds that tenants fear the proposed changes will leave them less secure, especially those who have transgressed in the past and have had to leave their home or face the costs of court fees when the landlord obtained a possession order.

Read more about the white paper.

Clarke tells the inquiry that when a landlord can’t obtain possession in time for new students to move into a property at the beginning of the academic year, they could switch to either letting to family groups or holiday lets.

“There is currently not an option for a landlord to revert back to the shared occupation without first obtaining fresh Article 4 planning permission,” she adds.

“We ask that conditions surrounding Article 4 be reviewed and flexibility be built into the planning system.”

Other landlord groups have previously warned that students will pay higher rents as landlords exit the sector if the proposal is introduced. This has already happened in Scotland where similar rules were brought in recently.

View Full Article: Leading landlords warn Government’s over periodic tenancy plans

Immigrant requirements to rent?

admin    Uncategorized     agents

Hello, Apologies for this rambling query.

Background: My daughter has landed a permanent job at Cambridge University and is about to immigrate to the UK (we are South African). She is a director and shareholder of our small BTL company registered in the UK.

View Full Article: Immigrant requirements to rent?

NEW: More students failing referencing as cost-of-living crisis hits sector

admin    Uncategorized     agents

The number of students who passed referencing dropped from 50% to 40% this autumn and is likely to fall even further, due partly to the growing cost-of-living crisis, according to a leading rent guarantee firm.

As demand for university places and a lack of suitable homes puts the student accommodation sector under intense pressure, it reports that the tsunami of students meant many needed last-minute support to find somewhere to live.

“Given the current economic pressures, a higher number of applicants are failing referencing and require a suitable guarantor to progress their rental arrangements,” says Graham Hayward, chief operating officer of Housing Hand.

He adds that the number of UK students applying for rental guarantors has almost matched the number applying from overseas. However, of those international students, a higher proportion was from outside Europe as the impact of Brexit makes itself felt.

Accommodation providers have stepped up to help students find places, reports Housing Hand, which has seen a 25% rise in custom arrangements across purpose-built student accommodation, build-to-rent homes and HMOs.

Lack of supply

“Many universities are seeking ways to support their students, particularly where a lack of supply in the local accommodation market may exclude many if they were required to pay full accommodation costs up front,” says James Maguire (pictured), its head of sales and business development.

“Additionally, universities are now seeking the inclusion of their own halls of residence in bespoke rental guarantor arrangements with Housing Hand to help level the playing field for those who would otherwise struggle to find an affordable home.”

View Full Article: NEW: More students failing referencing as cost-of-living crisis hits sector

House prices continue to fall as market cools

admin    Uncategorized     agents

The average house price in the UK fell by -0.4% in October – the third price drop in four months, Halifax data reveals.

Prices fell by -0.1% in September and the annual rate of growth has now fallen to +8.3%

View Full Article: House prices continue to fall as market cools

Are you ready for the switch to digital tax submissions?

admin    Uncategorized     agents

The Making Tax Digital initiative (MTD) is a HMRC scheme that aims to modernise income tax accounting and reporting, making the process fully digital. The idea is to improve HMRC’s efficiency and reduce costs to the taxpayer by processing business, property and individual tax affairs on-line.

Under Making Tax Digital Income Tax Self Assessment (MTD-ITSA) landlord taxpayers will be obliged to submit quarterly up-dates instead of just one annual tax return, traditionally due by 31st January following the end of the previous tax year ending 5 April.

In addition to the quarterly returns there’s also required an “end-of-period statement” (EPOS) submitted to HMRC as before by 31 January following the end of the financial year. This will confirm that the data entered in the quarters was accurate, adjusted if necessary.

Other issues such as expenses that landlords can claim and the restriction of mortgage interest, as well as any other taxable income will be taken into account before submitting a “finalisation statement”, a declaration to confirm and take account of any final “updates” needed to calculate an accurate final tax bill.

Extended timescale

In recognition of the challenges faced by many UK businesses, landlords and individuals as the country emerges from the pandemic, the introduction of MTD ITSA has been extended by one year, from it’s planned start in April 2023, to April 2024.

The next phase follows the introduction in April 2019 of MTD for those VAT-registered businesses with taxable turnover above the VAT threshold and also the introduction of MTD for VAT-registered businesses with turnover below the VAT threshold from April 2022.

HMRC says that there is a growing body of evidence from research and insights from taxpayers already operating MTD VAT demonstrating that MTD is securing a range of benefits for those that use it in practice. The users are reporting that the discipline of preparing and submitting returns makes life easier in the long-run, and that MTD has increased their confidence in managing tax their affairs and the use of technology.

Get ready now!

From 6th April 2024 Making Tax Digital will be introduced for all landlords, the self-employed and partnerships whose gross income from those sources combined exceeds £10,000 a year. There are two main requirements for MTD, (1) all transaction records must be kept digitally and (2) an HMRC approved software product must be used to do this so that the quarterly returns can be submitted to HMRC.

There will undoubtedly be greater demands place on the taxpayer under the new regime, but these accounting demands may not be too onerous if regular recordings are made. The spin-offs from this will be that income and expenditures are recorded as they happen obviating the annual scramble to bring to mind events that occurred 12 months ago, and once digitised the software – depending on the product used, whether a general property management suite with tax capabilities or a purposed MTD package -will allow detailed analysis of the profitability of your operations.

The extension gives plenty of time to prepare but by getting your affairs in order now, the transition from your paper based or already digital accounting system will be so much easier. You need to search out the best accounting software to meet your own needs from the extensive list of HMRC approved products, some of which are free while others are incorporated into mainline accounting and property management packages.

Many accounting packages are now “cloud based”. Sage, Quickbooks and Xero as well as some others work in this way. It means that all your accounting data once entered can be accessed from anywhere on most devices. The then means that your accountant will instantly be in a position to work on your accounts. Here is a complete list of HMRC approved MTD ITSA software

Who will MTD apply to?

The new MTD Self Assessment Income Tax requirements apply to all landlords with a combined property and/or business income of £10,000 or more per year. Gone will be the current process of completing and annual Self Assessment tax return from 6 April 2024. All those landlords and business owners with a combined business and/or property income between £1,000 and £10,000 per year will for now continue file annual tax returns through current Self Assessment process.

The new MTD rules will require landlords to:

– keep accounting records in digital form ready for submission to HMRC using approved software

– record all property and/or business income and expenses, capital and repairs / maintenance costs.

– submit quarterly returns for your property and/or business income and expenses to HMRC

– submit an “end of period statement” (EOPS) and a “final declaration” to HMRC

Here are some key dates to bear in mind:

The are deadlines for submitting quarterly returns after the start date of 6th April each year from April 2024:

– 5th August

– 5th November

– 5th February

– 5th May

After the final quarterly submission and at the end of the tax year the landlord will be required to submit:

– the end of period statement (EOPS) for each source of property or business income

– a final declaration which in effect is the replacement for the traditional annual Self Assessment tax return.

When submitting these final statements (due 31 January each year) for each source of income it gives you the opportunity to make adjustments noting details of any relevant other income sources and tax reliefs you may have received during the tax year.

As landlords you might think you’ve enough to worry about right now with a cost of living crisis, mortgage rate hikes, new regulations due out soon and looming EPC rating uplifts, but don’t leave planning for MTD to the last minute. It’s a great idea to start to digitalise your accounts now using one of the approved packages to that you have a year to get familiar with it, for when the time comes to submit your quarterly returns.

Useful sources:

Extension of Making Tax Digital for Income Tax Self-Assessment to Businesses and Landlords

Updated 2 February 2022

Sign up as an individual for Making Tax Digital for Income Tax

Income Tax (Making Tax Digital) end-to-end service guide

View Full Article: Are you ready for the switch to digital tax submissions?

REFORMS: ‘Rethink your plans on Section 21 evictions’ landlord tells MPs

admin    Uncategorized     agents

Successful landlord and property developer Kathy Miller has urged the government to rethink its plans to abolish Section 21 or face a big rise in court cases and spiralling bills for unpaid rent and property damage.

A Wiltshire landlord for more than 20 years, Miller (pictured) has submitted evidence of her personal experience renting out family homes – some of them to tenants with pets or on Universal Credit – along with 233 other individuals and organisations as part of the LUHC committee’s inquiry into reforming the PRS.

She believes the government’s White Paper proposals won’t result in a fairer private rented sector but instead will decimate it by removing the means to evict bad tenants.

Trash my house

“During Covid I had a tenant completely trash my house which cost £30,000 to put right, along with rent arrears of £7,500,” Miller tells the committee. “I couldn’t evict for 10 months despite being down for emergency eviction by the courts. I had to stand by helpless as my house was destroyed.”

Section 21 is mainly used for problem tenants – without it, there will be a massive increase in Section 8 evictions, she says. “The courts need to record why tenants are being evicted and make the statistics available.”

Proposals to give tenants the right to have a pet will also make evicting tenants with destructive animals even harder, adds Miller. “A pet policy can be cancelled in 14 days and in many cases the insurance won’t pay out. It leaves landlords with a garden full of waste, doors damaged by cats using them as scratching posts, fleas hatching six months later, and urine-soaked carpets. How do you evict these tenants without Section 21?”

The committee’s final examination of witnesses takes place on Monday.

Read Kathy’s evidence in full.

Pic credit: Wiltshire Times.

View Full Article: REFORMS: ‘Rethink your plans on Section 21 evictions’ landlord tells MPs