New law sets ground rent to zero for prospective homeowners

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Landlords will be banned from charging ground rent to future leaseholders in England and Wales from 30^th June.

Under the Leasehold Reform (Ground Rent) Act, anyone buying a home on a new long lease will be freed from these annual costs which can sometimes add up to hundreds of pounds, yet provide no clear service in return and can be set to escalate regularly, according to the government.

Upcoming changes

It says many landlords have already reduced ground rent to zero for homebuyers starting a new lease with them but that anyone preparing to sign a new lease in the next two months should speak to their landlord to ensure their ground rent rate reflects the upcoming changes.

Leasehold Minister Lord Stephen Greenhalgh adds: “I welcome the move from many landlords who have already set ground rent on their new leases to zero and I urge others to follow suit ahead of this becoming law.”

Online calculator

Measures already announced in 2021 include a new right for leaseholders to extend their leases to 990 years at zero ground rent and an online calculator to help them find out how much it would cost to buy their freehold or extend their lease. In a government crackdown, the Competition Market Authority also secured commitments with major homebuilders to stop them doubling ground charges every year for leaseholders.

Timothy Douglas, policy and campaigns manager for Propertymark, says the unfair and restrictive charges levied on leasehold homeowners have, in some cases, been allowed to become a cash-cow and that abolishing them has been a long time coming. He adds: “These changes only legally restrict ground rents on new leases, so we hope they are a catalyst for further reform by the housebuilding sector itself and the UK government that will release the estimated over one million existing homeowners who remain locked into these agreements.”

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Airbnb backs steps to end ‘no fault’ evictions and speed up register study

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Airbnb has called for an end to Section 21 evictions to stop landlords forcing tenants out of properties and then turning them into short-term holiday lets.

The platform says it backs moves to strengthen protection for renters and is committed to investigating cases where a tenant has been unfairly evicted from their property which is subsequently listed on Airbnb.

Landlords removed

Amanda Cupples, Airbnb’s general manager for Northern Europe, says ending ‘no fault’ evictions would ensure long-term housing is protected for communities and help the website better police the sector. It already removes landlords from its platform if tenants have been unlawfully evicted.

Cupples says the firm was also ready to administer tourist taxes as a way to help local residents better benefit from living in a tourism hotspot and had already collected £3 billion in ‘tourism taxes’ around the world. “Where there is clear support for such a measure to be introduced in the community, Airbnb can share its experience in working with authorities to streamline the process here in the UK too.”

Available properties

The short-term lettings sector has been criticised for contributing to a sharp drop in the number of rental properties available for local people as landlords switch from longer tenancies; Devon has seen a staggering 70% drop in private rented properties over the last two years. Earlier this year, the government announced that from April 2023, second homeowners would have to pay council tax and stop accessing small business rates relief if they can’t prove that their properties are genuine holiday lets.

Airbnb has also called for the government to speed up its timetable for delivering on its commitment to consult on a national register for the sector. She adds: “Since last year, we have led calls on short-term lets rules being introduced and now, alongside communities in some parts of the UK, we are keen to see the government turn talk into action.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Airbnb backs steps to end ‘no fault’ evictions and speed up register study | LandlordZONE.

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How to get the new tax year off to a good start!

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It feels like it’s only been a minute since we were submitting our 20/21 tax returns, but already the new tax year is here! Which not only means there are a couple of new rules and regulations to look out for,  but it’s also time to prepare the 21/22 tax return!

So here’s our breakdown of how to get the new year off to a good start! 

1. File as early as possible

The first thing, and it’s a pretty big one – Just because you don’t have to submit your 2021/22  tax return until the end of January, doesn’t mean that you should forget about it until then! 

Not to call anybody out – we’re all guilty of not necessarily being overly proactive when it comes to our tax returns, and we’re under no illusions that it’s not your favourite task in the world, but the quicker you get on top of your tax return, then the quicker you will be aware of your liability and any plans you may need to put in place around that. Also HMRC’s phone lines get even busier around tax return filing season, so if you have any questions for the revenue, then its best to contact them sooner rather than later!

Filing early is an ever growing trend, with HMRC seeing more than 63,000 people filing their tax 20/21 return on the 6th April 2021, and 934,501 by the 17th May 2021. 

Tax isn’t always bad news either – for those of you lucky enough to receive a tax refund for the year, the earlier you file, then the earlier you will get your refund! 

2. Get a good filing system in place ready for MTD 

We couldn’t really talk about the new tax year without mentioning MTD, could we?! 

Although this isn’t strictly an MTD specific point – a good filing system and method will ensure that when you are putting together your tax return, the process should be relatively pain free. 

And with Making Tax Digital for Income Tax edging ever closer, it really is a good time to consider using a software to keep your records – by starting at the beginning of the tax year, you will have a full years records under your belt by the time it comes to your next tax return – and once MTD becomes a legal requirement, you will already be a digital record keeping pro! 

If you’re still looking for the right MTD software for you, why dont you check out our MTD ITSA ready package here 

3. Update yourself on new tax rates and rules 

Tax rates and brackets change on a near annual basis, so keeping yourself up to date for the current tax year,  as well as the year you’re filing for can help reduce any surprises when calculating your tax liability. 

The recent spring statement included an increase in the threshold before you are charged national insurance, BUT there will also be an additional 1.25% “Social Care Tax” to keep an eye out for.

Really what we’re trying to get across is that being organised is key – that and having a good software partner to support you through everything! At APARI we aim to support all of our landlord users as much as possible through the transition from Self Assessment to Making Tax Digital for Income Tax. Want to keep up to date with all things Landlords & Tax? Check out our Community here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How to get the new tax year off to a good start! | LandlordZONE.

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Salvation Army labelled rogue landlord after years of neglect

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The Salvation Army has been slammed for allowing some of its private residential tenants to live in substandard accommodation.

Properties in Hadleigh, Essex, were found to be riddled with damp and mould while some had vermin infestations or breached fire-safety regulations, leaving renters exposed to serious hazards for at least seven years.

Unreserved apology

An investigation by the Guardian and ITV News found that the Christian organisation ignored repeated requests to improve conditions from its tenants. It has now issued an unreserved apology and says it has begun surveying the properties and renovating vacant homes as part of an urgent action plan.

Problems were first documented in late 2014, then in 2018 the charity left up to 40 tenants with the impression they were about to be evicted, instead of paying to correct the problems. In 2019, a local environmental health officer at Castle Point council wrote to the Salvation Army and described the charity’s handling of the situation in Hadleigh as a “sordid mess” and served improvement notices on a number of its properties.

Long-standing tenant

Peggy Jane Smith, a Salvation Army tenant in Hadleigh for 38 years, whose property was found to be a fire risk, labelled its behaviour that of a rogue landlord. She said: “It’s very hard to try and tell people that because it’s not what people want to believe, but the unfortunate thing about the Salvation Army is, on the one side they have their spiritual side, but on the other side they’re behaving like hard-nose, unscrupulous, capitalists.”

Anthony Cotterill, the charity’s territorial commander, admitted that the condition of the houses was unacceptable. He added: “It is clear that we let down the tenants of Seaview Terrace and Mount Zion and I am deeply sorry. As well as an unreserved apology, I would like to offer reassurance that for some months now we have been working on an urgent action plan to bring these properties up to the correct standard.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Salvation Army labelled rogue landlord after years of neglect | LandlordZONE.

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Ban on charging ground rent on new leases from 30th June

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The government is to stop future leasehold homeowners from facing annual ground rent costs. Sometimes worth hundreds of pounds a year, these charges provide no clear service in return and can be set to escalate regularly, with a significant financial burden for leaseholders.

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Landlords in limbo as homes shortage makes renters stay put

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Landlords are struggling to get tenants to move out because of a chronic shortage of available properties to rent.

As well as coping with tenants building up rent arrears during the pandemic and the resulting protracted eviction process, landlords around the UK report that some are now ignoring eviction notices and having to be forcibly removed because they can’t find anywhere suitable. Rising house prices – preventing potential home buyers from moving on – and the fact some landlords are selling up have both contributed to the problem.

Landlords in limbo

An article in The Telegraph quotes letting agents and landlords who explain how they’ve even offered to help tenants move or how a refusal to quit has put their property sale at risk, leaving the landlord in limbo.

Portsmouth & District Private Landlords Association chair, Martin Silman, tells LandlordZONE that some members with private sector tenants have been told by their local authority not to move until they absolutely have to do so, after being served a Section 21 by their landlord. He adds: “Sadly this is not uncommon and further evidence of the immense shortage of rental accommodation in the area.”

Chronic shortage

The NRLA has been warning the government for some time about the problems tenants are facing because of a chronic lack of private rented housing to meet demand. “Action is needed to address this, including reversing some of the tax changes on the sector,” a spokesperson says. “This should include scrapping the stamp duty levy on additional properties. It is crazy to be taxing the supply of new homes.”

However, there is less evidence of the phenomenon in other parts of the UK, such as the East Midlands where EMPO’s Giles Inman says it has not heard reports about the issue. He adds: “We are dealing with lots of requests for advice and guidance around the possession process, however the main reasons for possession are around tenant behaviour, rent arrears and landlords selling up.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords in limbo as homes shortage makes renters stay put | LandlordZONE.

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Rent arrears – Benefit Nightmare?

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I have a tenant who was unable to work due to health reasons. His partner left him a couple of years ago and subsequently, I’ve gone out of my way to try to find ways for him to stay in the flat because of his health.

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Gove pledges to improve social housing – and takes a swipe at PRS

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Levelling Up Secretary Michael Gove has vowed to give the “inadequate” social housing sector a boost in an apparent policy U-turn.

After decades of falling investment, government figures show there are more than a million households on the waiting list for a social rented home in England, according to Shelter. Speaking at the charity’s housing conference this week, Gove said the sector was in urgent need of reform. “If we want to have functioning communities, if we want to have our cities and towns having places where keyworkers and individuals who keep our public services going can ensure that they have a decent roof over their heads and raise a family in stability and security, then we need more social homes,” he told delegates.

PRS criticised

However, in the same speech, Gove also levelled criticism at the PRS, lending weight to the homeless charity’s line that it is now ‘broken’. He said: “The quality of the private rented sector, the circumstances in which people find themselves, the inadequacy of so many of those homes, the fragility and vulnerability that so many people find in their daily lives…is insupportable and indefensible.” 

Gove added: “But the cost even for those who are in the care and in the hands of good landlords, compared either to what they would be paying if they had a mortgage or what they’d be paying if they were in social housing, is again indefensible in many cases.” 

Decent homes

Former Prime Minister Theresa May added that problems were caused because not enough homes were built over many decades. She said: “For too long, my party has been seen in many peoples’ eyes as the party only of homeownership. Indeed, dare I say it, our policies have too often made it seem that way. But we are the party of decent homes for all, be they people who want to rent their home or to own their own home.” 

Other speakers at the event included social housing campaigner Kwajo Tweneboa and the Bishop of Barking Lynne Cullens.

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Levelling up Bill targets vacant shop landlords…

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The new levelling up Bill will force landlords into letting auctions

Announcing another 68 local authorities that will receive support from the High Streets Task Force, including Southend-on-Sea, Somerset West and Taunton, Rossendale and Dudley, the Government spells out its commitment in its new Levelling Up and Regeneration Bill.

The locations have been allocated using the Indices of Multiple Deprivation (IMD), together with other measures of retail exposure. Delivery of funds and support to these local authorities is to be staggered, starting from this summer, until the end of the programme in 2024.

In addition, new powers are to be introduced as part of the Bill, which will be announced in the Queen’s Speech next month. The Government has said it will give more powers to local authorities to enable them to make high streets and town centres “the thriving hearts of communities again.”

“We will incentivise landlords to fill vacant units by giving local authorities the power to require landlords to rent out vacant properties to prospective tenants. This will tackle both supply and demand side issues to avoid high levels of high street vacancies and blight, and in turn increase the attractiveness and vitality of our high streets,” says the Government’s white paper.

This, the Government says, builds on the High Street Task Force’s wider offer to all communities, which includes online resources and training modules, webinars and access to data dashboards.

New life on the high street

Vacant shops are to be “reborn” under plan which aims to “breathe life into high streets” by forcing landlords to let out retail units that have been vacant for six months

In other words, retail landlords in the chosen locations could be forced to rent out shops that have been vacant for 6 months or more. If the owner can’t let the shop, then councils will be empowered to hold letting auctions.

The plan is to help remove boarded-up shop properties that blight these once thriving town centres, and return them to their former glory by allowing community groups and small businesses to take over.

Conversions and re-purposing

The High Streets Strategy, through changes to the planning laws, has been making it easier to convert empty shops into new uses like high street homes; granting automatic rights for pubs, restaurants and cafes to allow takeaway and al fresco dining; and make high streets safer and cleaner, with a focus on tackling litter, gum staining and graffiti.

The UK Government has been providing £1.7bn of temporary business rates relief in 2022-23 for up to 400,000 retail, hospitality and leisure properties to support the high street until the next revaluation. With the announcement of a freeze in the business rates multiplier worth £4.6bn over the next five years, all ratepayers in England will see a tax cut.

High street vacancies

With one in seven shops vacant on the UK’s high streets, the number of empty shops has soared since the pandemic. Many of these were shuttered during the lockdowns and failed to get back on their feet as the shift towards online shopping has accelerated.

The large fashion retailer chains have been among the hardest hit, with the likes of Debenhams, Dorothy Perkins and Topshop, along with many high street banks, contributing to the vacancies.

Last year more than 8,700 chain stores closed on Britain’s high streets, in shopping centres and on retail parks in the first six months. During this phase of the pandemic there was an average of nearly 50 outlets a day closing down.

But despite some high-profile retail failures, the number of closures has actually stabilised since then and the outlooks appears brighter as the effects of the pandemic recede.

Government support

Lisa Hooker, consumer markets lead at PwC says she believes continued government support, combined with resilient consumer spending, has helped many operators weather the storm and survive the pandemic.

Under the Government’s plans, local authorities will be given the new powers to to force landlords to rent out their vacant commercial property on high streets through a Compulsory Rental Auction. After a short grace period given to landlords to let their shop, the local authority will instigate an auction, inviting bids from interested parties.

Government ministers see this as a means of rapidly reducing the number of boarded-up shops while creating new opportunities for local small businesses and community groups. This, they argue will have a snowball effect, helping increase footfall and spending in these blighted town centres.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Levelling up Bill targets vacant shop landlords… | LandlordZONE.

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A familiar story I believe?

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I have issued a S21 to a tenant. I need to sell the house (they have never been a great tenant!). The council and Shelter have apparently advised the tenant to stay put – a familiar story I believe?

The tenant says the council has said some social housing is being built and she will get one

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