Updated advice for landlords on Right to Rent checks due in New Year

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The government is set to publish advice about how landlords will need to conduct Right to Rent checks after 5^th April.

From that date, Biometric Residence Card (BRC), Biometric Residence Permit (BRP) and Frontier Worker Permit (FWP) holders will only be able to evidence their Right to Rent using the Home Office online service – a physical document will no longer be accepted as valid proof.

Currently, tenants can choose whether to provide hard copy documents or a digital share code, but this will change for these specific groups in April.

The government has already reassured landlords and letting agents that they won’t need to retrospectively check the status of these renters who entered into a tenancy agreement up to and including 5^th April.

Civil penalty

Landlords will have a statutory excuse against any civil penalty if the initial checks were done in line with the guidance that applied at the time the check was made.

Since 2015, landlords have been required to check that all prospective tenants have lawful immigration status in the UK before entering a residential tenancy in England, to avoid a fine.

This new rule aims to reduce the work involved and to minimise the scope for human error or criminal abuse of the system.

To carry out an online Right to Rent check, landlords need the applicant’s date of birth and their share code, which they will have obtained online, or they can arrange for an agent to carry out checks on their behalf if they have an existing written agreement.

The most up-to-date government guide – Right to Rent Checks: A user guide for tenants and landlords – was published in September.

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UK’s leading tech hubs attracting record investment and jobs

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Government research is finding huge growth in venture capital investment and jobs in Britain’s leading tech hub cities, post Brexit.

According to new research, the UK technology sector attracted a record £29.4bn in investment during 2021, with Cambridge, Manchester, Oxford, Edinburgh and Leeds leading the pack.

Private venture capital has been a major source of this new funding, venture capitalists entrusting new companies with their cash, taking stakes in them that has given the sector a huge boost. Now more than double last year’s total of £11.5bn has been invested.

The Unicorns are coming

The number of companies worth $1bn (£750m), known in the industry as “unicorns”, has now increased to 116, a record high for the UK, that’s according to figures published by the government’s Digital Economy Council. This record figure dwarfs the comparable ones for France (31) and Germany (56), according to the DEC.

The drive to boost activity outside the capital and into the regions reflects the Government’s levelling-up agenda and it appears to be paying dividends for those cities with the necessary labour, housing and educational institutions exist.

Cambridge has been declared the leading regional tech city in the UK, just ahead of Manchester and Oxford. Edinburgh, Bristol, Leeds, Cardiff, Newcastle and Belfast also feature in the top 10.

Job creation

Gerard Grech, the chief executive of Tech Nation, a government-backed industry group reported by The Guardian Newspaper has said:

“The UK is very good at rearing and cultivating startups and scale-ups into successful global companies right across the UK. A true network of digital excellence is emerging right across the country through entrepreneurship, driving new job and wealth creation.”

Other research shows that these developments are leading to burgeoning job opportunities. In Manchester for example, tech jobs are said to have increased by 165% while Edinburgh pays the highest tech job salaries outside of London.

Tech job search engine Adzuna’s co-founder, Andrew Hunter, told the Guardian, that while there had been a “surge” in tech hiring across the UK, there is still a major problem in finding skilled staff. “The struggle for businesses across the country is having enough skilled staff to fill these positions to allow them to keep growing.”

Fastest growing

Bristol for example was named one of the fastest-growing tech hubs with firms in the city attracting more than £100m in venture capital funding during 2021. Research for the DEC ranked Bristol in the top five of a ‘Tech Power League’ table of cities, behind Cambridge, Manchester, Oxford and Edinburgh.

The DEC analysis shows that Bristol has over 3,000 tech job opportunities, a rise of more than 50% rise since November 2020, and with some of the highest salary opportunities outside of London. The number of Unicorn companies is expected to double in Bristol over over the next few years from three to six.

Aerospace companies feature on on the list in Bristol as do e-commerce companies like Huboo, and Biotech firms such as Open Bionics and the touchless technology firm Ultraleap all expected to reach the magic valuation in the near future.

Firms in the UK’s regional cities accounted for a larger proportion of the national total, with around £9bn of funding being awarded to start-ups and scale-ups outside of London.

Nigel Toon, co-founder and chief executive at Graphcore, based in Bristol, told Businesslive:

“There is no longer any debate over whether you can build a multi-billion dollar tech business in the UK. The investments made over the past few years into start-ups and scale-ups across the country are producing outstanding results and I look forward to seeing how ecosystems like Bristol’s grow and thrive over many years to come.”

Digital minister Chris Philp says:

“It’s been another record-breaking year for UK tech with innovative British start-ups helping solve some of the world’s biggest challenges.

“Capitalising on this fantastic investment across the country is a crucial part of our mission to level up, so we are supporting businesses with pro-innovation policies and helping people to get the skills they need to thrive in this dynamic industry.”

Digital Economy Council’s Levelling Up Power Tech League 2021

• Cambridge
• Manchester
• Oxford
• Edinburgh
• Bristol
• Leeds
• Birmingham
• Newcastle
• Cardiff
• Belfast

The increasing employment prospects in the leading UK cities is good news for landlords, with growing demand for quality housing and commercial units, offices, warehousing and industrial space.

[Image shows Clifton Suspension Bridge, Bristol]

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – UK’s leading tech hubs attracting record investment and jobs | LandlordZONE.

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LATEST: Scottish Government sets out its controversial rental reform plans

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Scotland has launched plans for an overhaul of its rented sector that include a controversial system of rent controls.

Proposals also include increasing penalties for illegal evictions, restricting evictions during winter, giving tenants greater flexibility to keep pets, introducing a new Housing Standard and PRS regulator and setting minimum standards for energy efficiency.

The government’s new deal for tenants promises to deliver stronger rights and a fairer rented sector that welcomes responsible landlords.

Tenants’ Rights Minister Patrick Harvie (main pic) explains that the proposals will significantly improve the lives of Scotland’s tenants in both private and social housing, giving them more stability, more choice over where they live and how they decorate their homes, and the confidence that their home will be of high quality.

Responsible landlords

“At the same time, it will recognise the interests of good quality, responsible landlords,” says Harvie. “We will be working in partnership with landlords, letting agents, tenants and others to deliver this strategy, and we want to gather the broadest range of views.”

However, David Alexander (pictured), CEO of estate and letting agency DJ Alexander, believes rent controls have never worked anywhere and invariably lead to fewer properties on the market and more housing shortages.

“It is important to remember that landlords and property investors can go elsewhere,” he says.

“If the approach to resolving Scotland’s housing shortage is simply to attack one part of the sector, then there is every likelihood of failure. The alternative to inclusivity could lead to a shortage of housing and a consequent slowing of economic growth.”

The results of a government consultation – which closes on 15^th April – will feed into the final version of the strategy to be published next year, with elements of the proposals put to the Scottish Parliament in a Housing Bill in 2023.

The rent control proposals set out reforms to the existing rent adjudication process, and the government will gather evidence to inform a future consultation specifically on these controls.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Scottish Government sets out its controversial rental reform plans | LandlordZONE.

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A national system of rent controls is a key aim of consultation

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The Scottish Government is consulting on the draft ‘A New Deal for Tenants’  to propose a rented sector strategy looking to improve accessibility, affordability choices and standards across the whole rented sector in Scotland. Click here

It is looking at a phased implementation over the next five years.

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Management Agent Overcharging from 2019?

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Dear All, I own a flat in a block of 6 flats and have been up-to-date with my service charge. Every so often, I get an extra fee called “balancing service charge” after which I had made payment for the annual service charge

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LATEST: Tory tax raid on landlords hitting investment levels hard

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The Government’s raft of tax changes has hit landlords’ investment plans, with 52% deterred from buying more properties, finds a new survey.

An LSE study for the National Residential Landlords Association (NRLA) found that despite the seismic impact of Covid, tax changes had affected their plans more than the pandemic.

Its survey of more than 1,400 private landlords across England discovered increasing regulation and bureaucracy along with the government’s negative messaging about private landlords and their role in the housing market had also played a part.

Landlords felt vilified and under attack from the Government and, the report said, “the emotive tenor of many comments and the near unanimity of views were striking”.

Recent changes have included restricting mortgage interest relief to the basic rate of income tax, a 3% stamp duty levy on the purchase of additional homes and a decision to cut Capital Gains Tax to 18% for everything other than on gains from the sale of residential property.

Greatest effect

Overall, a third of respondents said the reform to mortgage interest relief was the tax change having the greatest effect on their rental business. Of this group, 39% said the change meant that they were not going ahead with planned future purchases while 31% had put plans on hold and 28% were taking steps to leave the sector altogether.

Another 60 former landlords said their main reasons for leaving the sector were rising costs, tax changes and potential regulatory change.

The study’s authors said individually and cumulatively, the recent changes had reduced the incentive to be a landlord in England.

The add: “These indications may herald the start of a contraction of the sector, unless the economic environment changes. Disinvestment will probably be led by those economically motivated landlords most affected by the recent changes.

“This includes highly leveraged individual investors who are higher- and additional-rate taxpayers as they can no longer deduct mortgage interest at their marginal tax rates.”

Read more about stamp duty.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Tory tax raid on landlords hitting investment levels hard | LandlordZONE.

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SO much for a low-tax economy! Poll shows tax rises hitting landlord activity hard

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The Government’s raft of tax changes has hit landlords’ investment plans, with 52% deterred from buying more properties, finds a new survey.

An LSE study for the National Residential Landlords Association (NRLA) found that despite the seismic impact of Covid, tax changes had affected their plans more than the pandemic.

Its survey of more than 1,400 private landlords across England discovered increasing regulation and bureaucracy along with the government’s negative messaging about private landlords and their role in the housing market had also played a part.

Landlords felt vilified and under attack from the Government and, the report said, “the emotive tenor of many comments and the near unanimity of views were striking”.

Recent changes have included restricting mortgage interest relief to the basic rate of income tax, a 3% stamp duty levy on the purchase of additional homes and a decision to cut Capital Gains Tax to 18% for everything other than on gains from the sale of residential property.

Greatest effect

Overall, a third of respondents said the reform to mortgage interest relief was the tax change having the greatest effect on their rental business. Of this group, 39% said the change meant that they were not going ahead with planned future purchases while 31% had put plans on hold and 28% were taking steps to leave the sector altogether.

Another 60 former landlords said their main reasons for leaving the sector were rising costs, tax changes and potential regulatory change.

The study’s authors said individually and cumulatively, the recent changes had reduced the incentive to be a landlord in England.

The add: “These indications may herald the start of a contraction of the sector, unless the economic environment changes. Disinvestment will probably be led by those economically motivated landlords most affected by the recent changes.

“This includes highly leveraged individual investors who are higher- and additional-rate taxpayers as they can no longer deduct mortgage interest at their marginal tax rates.”

Read more about stamp duty.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – SO much for a low-tax economy! Poll shows tax rises hitting landlord activity hard | LandlordZONE.

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NRLA commission London School of Economics survey on Landlord tax

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Unsurprisingly, over half of private landlords responding to a new survey say recent tax changes in the rental market have had a negative impact on their investment plans. That’s the finding from a new study by the London School of Economics (LSE) for the National Residential Landlords Association (NRLA).

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Bristol significantly expands HMO and selective licensing schemes

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Bristol has approved plans to extend landlord licensing in Brislington West, Bedminster and Horfield wards in a bid to raise PRS standards.

The scheme includes additional licensing – HMOs with three or more unrelated people sharing facilities – and selective licensing – private rented properties occupied by one or two tenants, or a family, that are not HMOs.

Councillor Tom Renhard (pictured) cabinet member for housing delivery and homes, says it has evidence to prove that licensing schemes are proving successful across the city.

During the five-year scheme in Eastville and St Goerge wards, which ended on 30th June, 3,616 licences were issued and 3,409 inspections carried out, with 88% of properties subsequently improved. 

A 10-week public consultation found that 58% of respondents either agreed or strongly agreed with extending the scheme.

He adds: “We are aware that a significant number of HMOs not covered by mandatory licensing are being poorly managed and maintained in these areas.

“We now have extra powers to take action, and we would encourage all landlords to work with us to help protect vulnerable tenants and make people across the city more comfortable in their homes.”

Bristol City Council charges £1,420 for an HMO licence and £1,000 for an additional licence. All 12 wards in the central area of Bristol (pictured) are covered by an additional licensing scheme.

Despite Bristol council’s commentary earlier this year Clear It Waste named the city as having the second-best landlords in the UK, after Sheffield.

Its points-based index found Bristol had high levels of tenant satisfaction and fewer tenants with landlord issues. However, Verve Research reported that lockdown had seen an abnormally high amount of complaints being made about illegal eviction or complaints relating to evictions during the pandemic, with Bristol’s 135 complaints putting it in second highest place out of 20 cities.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Bristol significantly expands HMO and selective licensing schemes | LandlordZONE.

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Agent admits illegally subletting THREE houses but dodges £136k fine

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A sub-letting HMO managing agent has had a whopping £136,000 fine reduced to £31,500 after a judge ruled Epping Forest District Council had come down on him too harshly.

The First Tier Property Tribunal agreed that Darius Endriukaitis was guilty of failure to licence, failure to comply with HMO management regulations and failure to provide information on fire safety measures to tenants.

But it said the council hadn’t taken any personal factors into account and had calculated each penalty in excess of the statutory maximum.

It heard that Endriukaitis worked with fellow Lithuanian Ceslovas Sasnauskas, the sole director of property management company New Property Move.

In September 2019, Endriukaitis signed an assured shorthold tenancy agreement for 7 Hainault Road, Chigwell, that contained a rule against sub-letting.

A month later he started renting rooms out, with rent paid to New Property Move, and up to nine people later lived in the three-bedroom property.

He did the same at 105 Queens Road, where the four-bedroom property was sublet to about nine people and at 17 Palmerston Road, both in Buckhurst Hill, where the six-bedroom house was sublet to a number of people shortly after the tenancy was signed.

‘Not liable’

Although Endriukaitis admitted he rented out all three properties, intending to use them as HMOs, he said that as an employee of New Property Move he could not be liable for the penalties.

The council argued that the arrangement was a joint business venture between Endriukaitis and his friend Sasnauskas.

The tribunal ruled that Endriukaitis could easily have done some research about HMO regulation and should have known that sub-letting the properties without notifying the agent or owner was dubious conduct.

It was satisfied that his involvement with the tenants was on the basis of a joint business enterprise, however, it challenged the council’s penalty of £136,232, and added that it should also have served notice on Sasnauskas personally rather than just the company, which is being dissolved.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Agent admits illegally subletting THREE houses but dodges £136k fine | LandlordZONE.

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