No let-up in relentless rise in property prices

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According to Rightmove, Britain’s leading property portal, house prices and the demand for homes are at the highest level they have ever been with the national average asking price of newly marketed properties rising this month (September) to an all-time high of £338,462.

The latest available figures from ONS show that UK average house prices increased by 8.0% over the year to July 2021, this was down from 13.1% in June 2021.

The average UK house price in July according to ONS was £256,000, which was then £19,000 higher than the same time last year, following the then record high of £265,000 in June 2021.

Average house prices increased over the year in England to £271,000 (7%), in Wales to £188,000 (11.6%), in Scotland to £177,000 (14.6%) and in Northern Ireland to £153,000 (9.0%).

London continued to be the region with the lowest annual growth (2.2%) for the eighth consecutive month.

July figures an underestimate

However, these figures were thought to be an underestimate at the time and all the evidence points to a continuing rise in prices as demand outstrips supply. As the ONS says, “…because of the impact of the coronavirus (COVID-19) pandemic on both the number and supply of housing transactions, we might see larger revisions to the [July] published House Price Index (HPI) estimates than usual. Fewer transactions were available than expected for the July 2021 estimate. “

July’s house price fall coincided with the start of a tapering to the UK government’s Stamp Duty holiday incentive. Read more about the Stamp Duty Land Tax changes

Competition for homes

Industry experts now say that the competition when moving home has more than doubled since before the pandemic with Wales, the East Midlands and the southwest, southeast and east of England experiencing annual asking price increases of more than 8 per cent.

What the experts think

Tim Bannister, the director of property data at Rightmove, has said:

“The high ratio of buyer demand to properties for sale means that the property market remains stock-starved despite the summer lull lessening overall activity. Competition among potential buyers is now more than double what it was this time in 2019.”

Rightmove says the average asking price for a home has increased by 0.3 per cent, or £1,091, month-on-month in September.

Now buyers are being refused viewings unless their house is under offer and eager buyers who are in a position to move are elbowing-out those who still have their house on the market.

Tim Bannister adds:

“To be in pole-position you need to have greater buying power than the rest of the field. That traditionally would mean deeper pockets to outbid other buyers, but today’s ‘power buyers’ also need to have found a buyer for their own property, or to have no need to sell at all.”

There are signs of some stability re­turning to the sector as the stamp duty incentive recedes and growing affordability and sluggish growth in the economy generally.

Overall the board is set for a stable autumn, and there are hopes that more properties will appear on the market The first two weeks of September saw the number of listings rise by 14 per cent when compared with the closing couple of weeks in August.

Peter Woodthorpe, Director at Readings Property Group in Leicester, had said:

“The main issue is lack of stock. We are also seeing some examples of properties being overpriced, distorting the market by reducing the number of saleable properties further.”

Managing director of Birmingham estate agents Barrows and Forrester, James Forrester has said:

“It’s to be expected that the astronomic rates of house price growth seen since the introduction of the stamp duty holiday will now start to subside as we approach the final deadline,”

“But don’t be fooled into thinking the market will now deflate like a cheap birthday balloon. Buyer demand is extremely high and property prices will remain robust, largely driven by second and third rung buyers upgrading to larger, higher-value homes.”

The rental homes market

It is estimated that the number of homes available for rent in Britain could continue to fall as more landlords leave the market thanks to higher taxes and stricter rules.

According to the Nottingham Building Society nearly one-million landlords, which represents over a third of the total, will be reviewing their property portfolios in the coming year, and the number planning to sell rental homes outnumbers those planning to buy new ones.

Up to 20 per cent could sell some or all of their portfolio, the building society says, while 16 per cent plan to buy more.

This change could move the needle on UK property supply, and therefore house prices, as more homes become available to buy. But, while those homes going to first-time buyers or families would help more people climb onto or up the property ladder, it could also lead to a shortage of property to rent. In some popular parts of the country a lack of rental homes to rent has recently led to renting bidding wars.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – No let-up in relentless rise in property prices | LandlordZONE.

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Just 10% of landlords support arrival of Gove as housing secretary

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Most landlords are not convinced that Michael Gove is the right person to lead the newly named Department for Levelling Up, Housing and Communities, but hope he’ll treat them fairly.

A new survey from online lettings company LettingaProperty.com found that just 10% of landlords agree with his appointment as Housing Minister, compared to 23% who disagree with it and 67% who are ambivalent.

There is also scepticism over whether Gove will prove to be landlord-friendly; of those surveyed, just 11% feel he will, while 36% feel he won’t, and the remaining 52% are unsure.

A desire to be treated fairly topped their list of priorities, followed by a desire to see Gove deal with rogue landlords, while bringing back mortgage interest relief and avoiding red tape were also uppermost in many landlords’ minds.

Jonathan Daines, LettingaProperty.com founder and CEO, says the survey highlights the scale of the new minister’s need to win over hearts and minds.

“Landlords will be watching and waiting to see how well Michael Gove rises to the challenge,” he says.

“Many of those providing much-needed rental homes seem to be reserving their judgement, creating both an opportunity and a challenge for him.”

Adds Daines: “The UK continues to be desperately short of homes, while landlords have been on a tumultuous ride in terms of government-induced financial changes over the past few years.

“Given the impact of those changes, it is perhaps unsurprising that so many landlords are on the fence about whether Gove will be prepared to fight their corner.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Just 10% of landlords support arrival of Gove as housing secretary | LandlordZONE.

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The Telegraph needs help from investors

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Hello, my name’s Melissa Lawford, I’m the property correspondent at The Telegraph. I’m writing an article about how the pandemic has reshaped the market and has created new investment opportunities in different places. I’m keen to talk to landlords who have recently invested or are planning to invest

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Treat us fairly

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Following Michael Gove‘s appointment as Secretary of State for Levelling Up, Housing and Communities the property industry is still considering how warmly to receive the new postholder. A new survey from LettingaProperty.com has revealed precisely what those in the property sector think of the new appointment

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Rent arrears in first Covid wave dwarfed by the second

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The latest research by Barrows and Forrester examines the true impact of the COVID-19 pandemic on landlords due to rent arrears among private rental tenants in England, revealing that the total amount of arrears during the initial wave of the pandemic was dwarfed by arrears during the second.

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PetScore referencing service for landlords officially launches

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A tech professional who is also a landlord has launched what she believes to be the ideal solution to the impasse between landlords who won’t take tenants with pets, and the estimated 7.6 million tenants in the UK who want to live with their cats or dogs.

Natasha Homer-Earley (left), whose family has a rental portfolio in the UK but who also has a tech background, has today officially launched PetsScore, which is a dog and cat referencing service for landlords, tenants and letting agents.

In development for months, it enables tenants to register their pets for free including information about their pet’s microchip number, breed/size/weight, vaccinations, pet insurance, medical treatments, pet training, landlord/letting agent references, exercise levels and pet temperament.

PetScore will charge agents a small fee or subscription to see pet references, but pet owners are also able to share their reference with landlords and other property owners. Homer-Earley says she expected to add an insurance element to the platform at a later date, enabling tenants whose pets don’t pass muster to be insured against any damage.

Pets anywhere

She says her service will also be applicable to the Airbnb/short lets sector and will eventually cover other kinds of pet as demand dictates, and may eventually be integrated into CRM systems. She also has plans to go global, as her platform applies to any rental market where ‘pets in lets’ are a contentious issue.

PetScore has launched in the midst of a hot debate within the privately rented sector about pets. The government recently altered its voluntary model AST contract to require landlords to take pets unless they have good reason not to, while campaigning group AdvoCATS received cross-party support for its attempt to persuade Ministers to alter the Tenant Fees Act to enable pet deposits to be legal.

And MP Andrew Rosindell recently attempted to go even further. His Dogs and Domestic Animals (Accommodation and Protection) Bill hoped to give renters the right to live with their pet, but has so far been thwarted in parliament.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – PetScore referencing service for landlords officially launches | LandlordZONE.

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Cut the rhetoric and focus on policy

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With the ink barely dry on the new SNP and Scottish Greens co-operation agreement, the Scottish Government is keen to forge ahead with its plans to create a “new deal for tenants”.

Ahead of the recent announcement that he would be the new Minister for Tenants’ Rights

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New Income Tax penalty system to go live in 2023

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From 2023 landlords in the UK with an annual income over £10,000 will have to file their tax returns via HMRC’s new Making Tax Digital (MTD) initiative.

Through MTD, landlords will not only submit one annual tax return, but also quarterly submissions of income and expenditure, to give a real time snapshot of their tax position throughout the year.

(Find out more about what’s affecting UK landlords in the Tax World by reading our Ultimate Guide to Landlord Tax Returns!)

And with a change of process also comes a change in the penalty system. HMRC is bringing in a new points-based penalty system to better align with MTD.

According to HMRC the aim of the new penalty system is to be more supportive of those with genuine reasons behind mistakes or late filing, while still fining those who are consistently late.

How has the penalty system changed?

Some could argue that rather than being simpler, it is more complicated. The system measures fines by length of time since late submission, with the penalties accruing once the clock starts ticking.

The new system works in a similar way to the UK driving licence. You receive points on your record if you have a late submission – and once you pass a certain point “threshold” then you receive a penalty.

Here’s how it works

When a taxpayer misses a submission deadline they incur a point – these points build up to penalty thresholds, with each submission obligation (i.e. quarterly or annually) having a different threshold. Once this point threshold is reached, then a fixed penalty amount of £200 will be issued for every missed submission.

The Penalty thresholds are as follows;

If the penalty threshold isn’t passed, then the points will be cleared after two years.

But if the points threshold is passed, then all the points gained will be wiped only AFTER they have met a period of compliance as set by HMRC (Annual submissions 24 months, Quarterly submissions 12 months) AND submitted all the submissions due from the previous two years.

For late payment, penalties are issued by length of time passed from the due date – however HMRC have said that they will take a ‘lighter’ approach for the first year of implementation, and a way of easing taxpayers into the system.

The basic structure surrounding penalties for late payment is;

But don’t worry – This will not come into effect until 2023, and HMRC will be releasing more information in the lead up to the new system going live.

Want to stay up to date with all things Landlord & Tax? Sign up to the APARI community here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – New Income Tax penalty system to go live in 2023 | LandlordZONE.

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Guest blog: Landlords and tenants face cliff edge as furlough ends

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The end of furlough combined with cuts to vital benefits, will leave private landlords and their tenants on a cliff edge.

Renters are already struggling, with the number in arrears tripling from 3% at the end of 2019 to 9% by the end of 2020.

Now, with the Bank of England warning renters are more likely than any other group to have lost their jobs or been furloughed, we are urging the Government not to turn its back on those facing mounting rent debts through no fault of their own.

The NRLA believes tenants already struggling to cope could be pushed to the brink when furlough draws to a close at the end of September, as Universal Credit payments are cut by £20 a week and housing benefit remains frozen.

Threat to the economy

In a new report we examine what we believe is a failure to address the rent debt crisis building in the private rented sector (PRS) despite the best efforts of landlords and look at the potential solutions.

We know that the majority of tenants want to pay their rent, with 82% of those in debt paying their rent on time and in full prior to the pandemic.

We also know, from our own research, that many of our members have gone above and beyond to help support tenants to remain in their homes during the pandemic.

However, with a high proportion of landlords reliant on rent payments as their own and sometimes only source of income, there is a limit to how long this can continue.

The Government has admitted many landlords “are highly vulnerable to rent arrears”, and we argue landlords cannot be expected simply to continue to absorb these debts.

The figures speak for themselves, with data from MHCLG’s English Private Landlord Survey showing:

• 94% of private landlords rent property out as an individual
• 45% of private landlords rent out just one property
• 44% of private landlords became one to contribute to a pension

And it isn’t just us.

The Bank of England has also flagged the rent debt crisis as a major risk. It said Covid-related arrears could be a threat to the country’s economic recovery and has raised concerns about the impact rent-related debt will have on tenants’ credit scores and their ability to remain in their homes.

What needs to change?

To counter this the NRLA is calling on the Chancellor to develop an interest free, Government guaranteed hardship loan to support the majority of tenants with Covid-related rent debts who are not eligible for benefit support.

This scheme would help these tenants to pay off their rent debts and would follow the introduction of similar schemes in Scotland and Wales.

We are also one of 100 industry organisations to sign a letter calling on the Government to scrap plans to cut Universal Credit payments to avoid potentially devastating consequences for tenants across the country.

Doing nothing is not an option

If ministers continue to ignore the plight of private landlords and tenants the consequences could be both serious and expensive for Government, which will be left footing the bill for rehousing those who can no-longer pay their rent or make up arrears.

The knock-on effect for these tenants is far reaching. They could not only lose their home, but struggle to privately rent a home in future – or get a mortgage – due to the damage to their credit score.

 There is also the immeasurable harm to mental and physical health, and the pressure that places on already stretched health services.

By ending furlough and cutting benefits in quick succession, and without the introduction of a targeted package to tackle Covid-related rent debt, the Government is worsening an already critical situation.

Without transitional support the Chancellor will be turning his back on those renters and landlords that are in such desperate need of his help.

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HELP we have 3 personal BTLs with 3 different lenders and want to incorporate?

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Hi there all, We have three BTLs with three individual mortgage providers which are Virgin Money, Santander and Halifax in personal names obviously section 24 and the tax implications are an issue.

We are looking for some guidance on whether we will have to refinance all the properties to be able to move them into a limited company because they are with different providers or do most mortgage providers allow you to transfer the mortgage/asset into a limited company.

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