Chancellor ‘planning tax raid on landlords’ to plug £50bn hole in public finances

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Landlords could be hit with a rise in capital gains tax (CGT) along with cuts in reliefs and allowances as part of the Chancellor’s autumn statement due on November 17th.

According to a report in The Telegraph, Jeremy Hunt and PM Rishi Sunak have agreed that those with the “broadest shoulders” should bear the brunt of efforts to help plug the £50 billion hole in Britain’s public finances.

Treasury sources said sweeping changes to CGT, including to the headline rate, are being considered but cautioned that much can change before the statement. It is understood that reductions in capital gains tax reliefs and allowances are most likely to get the green light.

CGT re-alignment

The idea is not new, as a report from the government’s tax advisers two years ago suggested that it could bring CGT – currently 28% on residential property and 20% on other assets – in line with income tax so that higher-rate taxpayers faced a flat rate of 40 or 45%.

The Office of Tax Simplification also suggested reducing the annual CGT allowance threshold from £12,300 to £5,000 or less. Property experts warned then that this could spark a mass exodus of landlords from the market.

Previous Conservative initiatives include a rumoured plan this summer by former PM Boris Johnson to tempt buy-to-let landlords into selling properties to first-time buyers by charging lower capital gains tax.

There will be no extension of the stamp duty cut adopted by Liz Truss, the source revealed, meaning no extra intervention targeted at propping up property prices, nor is the Treasury working on a new scheme to help people who face mortgage defaults.

View Full Article: Chancellor ‘planning tax raid on landlords’ to plug £50bn hole in public finances

TECH: How Richard Jackson persuaded over 1,200 fellow landlords to ‘go digital’

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For the millions of UK landlords who operate just a handful of rental properties, the take-up of tech to manage their bricks and mortar, financials, tenants and compliance has been slow.

Most get by with a simple spreadsheet, a few Outlook reminders and keeping an eye on their bank account.

But Buckinghamshire landlord Richard Jackson (main image), who has built one of the leading digital management platforms used within the sector, says tech is now becoming a necessity rather than a nice-to-have for landlords of all sizes, but particularly those with medium to large portfolios.

He launched Alphaletz two years ago and the platform now has 1,200 landlords using its service, which can be accessed via a laptop or either Apple or Android smartphone app.

“Our landlords range from a few properties up to the largest, which has just over 100 units on Alphaletz,” he says.

“Quite a few have 70 or 80 properties and it’s also popular with HMO landlords – they might have only ten properties, but each one will house five or six rooms so they’re managing 50 or 60 ‘units’. We also have a few build-to-rent operators using us too.”

Jackson says Alphaletz, which is also used by letting agencies, was born out of his own need. As his portfolio grew, he gathered an increasingly large and disjointed array of tools to run it.

Out of control

“It became apparent that I needed a single system in place because things were getting out of control – I couldn’t remember where everything was and, although doing it that way was OK in the early days, the increasing complexity of being a landlord in the private rented sector demanded something more sophisticated,” he says.

“It became obvious that many landlords like me were cobbling together their own systems – task and financial management widgets, spreadsheets, supplier databases, insurance reminders, all bolted together.

“But they didn’t talk together and could be only run off a home computer and not a smartphone – so you couldn’t update or view data while you were out and about.”

Efficiency is not the only driver of landlords using Alphaletz and platforms like it, though.

Red tape

The increasing red tape that the sector has seen (deposit protection, EPCs, gas safety certificates and electrical checks) and the looming extra regulation within the Renters Reform Bill (landlord registration, periodic tenancies, pets rights and the Decent Homes Standard) all mean landlords will be required to face a lot more compliance responsibilities and, if they trip up, fines.

“On top of all this you have HMRC’s looming Making Tax Digital rules which will require landlords to keep digital tax records of everything pertaining to their properties and submit their tax return quarterly rather than annually, which is going to be a pain in the backside for everybody,” he says.

“I understand that many landlords see tech as an optional extra – but they are going to need some sort of digital platform to help them as a ‘must have’ when all this kicks in.”

Jackson also says that the market is slowly moving towards a more ‘professionalised’, larger-portfolio form.

Punches

“There are still a lot of people with one, two or three properties who have bought them as a pension pot and, consequently, just want them to break even until they retire and, therefore, they’ll remain in the market and roll with the punches,” he says.

“But the ones who will really thrive are the larger portfolio operators. I think the government will eventually incentivise that end of the market, which includes build-to-rent operators too.”

Alphaletz recently became LandlordZONE’s Official Technology Platform Partner.

Find out more about its service.

View Full Article: TECH: How Richard Jackson persuaded over 1,200 fellow landlords to ‘go digital’

Why a rent freeze in England just took a giant step forwards

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Where to begin? With the media buzzwords? With various organisations calling for a rent cap in England? Or the real reason a rent freeze is coming which was revealed on Thursday (which I will come to)?

Leaving aside that there is a perfect storm brewing

View Full Article: Why a rent freeze in England just took a giant step forwards

Seven in 10 landlords have properties with an EPC rating of D or below 

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The scale of the situation for landlords having to improve their rental properties to meet the energy performance certificate (EPC) standard of C has been laid bare in new research.

According to Shawbrook, seven in 10 (71%) landlords in the UK still own rental properties with an EPC rating of D or below.

View Full Article: Seven in 10 landlords have properties with an EPC rating of D or below 

Northern Ireland report rejects rent controls

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The Northern Ireland Assembly has published independent research on what a rent decrease of up to 10% and/or a rent freeze for up to four years will do the private rental sector.

Under the Private Tenancies Act (Northern Ireland) 2022

View Full Article: Northern Ireland report rejects rent controls

LATEST: Under-Secretary faces critical MPs frustrated by delays to renting reform

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Frustrated MPs have rounded on the government for again failing to confirm when it will timetable the long-awaited Renters Reform Bill.

During a Commons debate DLUHC Under Secretary Felicity Buchan (main picture) who appeared to be reading a pre-prepared script in the absence of any ministers able to speak during the debate, told them the Government was determined to deliver a new deal but only reiterated that it would “publish next steps in due course”.

But she reassured good landlords that the new system would continue to be a stable market for them to invest and remain in.

“No one will win if our reforms don’t support landlords as well as tenants,” said Buchan.

“This government is committed to reforming the PRS in a fair and balanced way – strengthening and clarifying landlords’ rights when seeking possession.”

Urgent

MPs across the House agreed on the need for urgent legislation. An exasperated shadow minister Matthew Pennycook said all 12 proposals in the white paper should be translated into legislation as a matter of urgency. “Problems have become acute,” he told MPs.

“Rents are surging. We could have fast-tracked legislation this winter – instead we just have a vague promise to introduce the bill in the next two years.”

Lloyd Russell-Moyle MP said although he welcomed the abolition of Section 21, it must not allow the next crisis to be the use of Section 8.

Loophole

“If we abolish Section 21 but allow landlords to increase rents uncontrollably, we would have a loophole you can drive a lorry through.”

The Brighton MP suggested one way to address the issue of student landlords dealing with proposed periodic tenancies would be to place a duty on universities to house all their students.

“They could engage in tenancies with the PRS which would be permanent, and universities could license those rooms out to students to give the PRS security and students the wraparound support they need.”

He also called on mortgage providers to give landlords buy-to-let mortgages when buying a property with a sitting tenant, to prevent the loss of private rented homes.

Watch the debate in full.

View Full Article: LATEST: Under-Secretary faces critical MPs frustrated by delays to renting reform

The Bank of England base rate rise – industry reacts

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Reaction from the worlds of property and finance was swift after the Bank of England announced that its base rate would increase to 3%.

That means lending for landlords looking for a new mortgage deal just got more expensive.

View Full Article: The Bank of England base rate rise – industry reacts

Councils warn how asylum seeker policies are ‘breaking’ private rented sector

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Council leaders in Kent and Medway have written to Home Secretary Suella Braverman (main pic, inset) warning that her asylum-seeker policies are pushing private and social housing sectors to breaking point.

Fourteen councils have signed the joint letter which demands that pressure be eased in the county where almost 20,000 households are on the waiting list for social housing, with limited availability of private rented sector and temporary accommodation, which also suffers from pockets of severe deprivation and low average earnings.

“Maidstone’s ability to access the private rented sector has been further severely curtailed by an increase in the number of placements from other local authority areas, and various services commissioned by Probation and the Home Office to provide housing for asylum seekers and ex-offenders from out of area,” the letter, which LandlordZONE has seen, explains.

“Maidstone has over 400 Ukrainian households many of which will need rehousing soon. [Its] experience is not unusual; it is mirrored 13 times across Kent and Medway’s housing authorities. Kent’s housing sector cannot absorb further asylum placements on top of these existing burdens over and above local demand.”

Entry point

The Home Office wants to allocate an additional 1,300 adults to accommodate in Kent by December 2023 – despite the county historically taking the strain of asylum-seeking adults and children due to it being the country’s primary entry point.

The letter goes on: “Kent and Medway make up just 3% of our country’s geographic space, and yet we are a victim of our geographic position. It is time to utilise the remaining 97% of the country to relieve the burden on Kent.”

Private contractor Serco is currently advertising for more landlords to take in asylum seekers in the Northwest, Midlands and East of England, by offering to organise a five-year lease with no void periods, regular rent payments without arrears, free repairs and maintenance, full HMO and property management costs.

View Full Article: Councils warn how asylum seeker policies are ‘breaking’ private rented sector

LATEST: Tenant campaign group mobilises for London rent freeze

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Campaign group the London Renters Union has stepped up its attempt to freeze rents in the capital, while blaming “out of control” landlords for recent rises.

A public meeting on 15th November labelled ‘Building the movement for a rent freeze’ aims to lead discussions on how to “unite and build the struggle”, ahead of its day of action as part of the #RentFreezeNow campaign, on 3^rd December.

The union cites the success of Living Rent campaigners in Scotland who it says helped prompt the country’s Cost of Living (Tenant Protection) Scotland Bill, which has frozen rents until at least next March.

London mayor Sadiq Khan recently repeated his call for the power to freeze rents and introduce rent controls, claiming that the move would save families about £3,000 during the next two years.

Rent rises

However, London Renters Union believes more than one million renters every month are having their rent put up and that its members are facing annual rent increases of at least £5,000.

“We’re living in a cost of living crisis, and rents are rising faster than ever but the government has done absolutely nothing to protect renters,” it explains.

“Rent increases are forcing us out of our communities and leaving us without enough for food and other essentials. Estate agents and landlords are out of control – and while they get richer, we get poorer.”

It adds: “We can only win a rent freeze by uniting our struggles, getting organised and making the connections between the fight for affordable housing and wider struggles against exploitation and oppression.”

View Full Article: LATEST: Tenant campaign group mobilises for London rent freeze

Bank Base Rate increased as predicted to 3%

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In an outbreak of predictability, when we all know the Base Rate is heading towards 4% to keep up with the Dollar and the Fed, The Monetary Policy Committee (MPC) voted 7-2 for an increase of 0.75% to a total 3%.

View Full Article: Bank Base Rate increased as predicted to 3%