CGT on Primary Residence? – Don’t be too hasty to judge

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A question on Capital Gains for a Primary Residence when I’ve never strictly permanently lived in the property in question…don’t be too hasty to judge, (I hope) there are a few mitigating factors!

My mother sold the family home back in 2008

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Prison terms for tenant harassment

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Illegal Eviction:

Two Sheffield landlords were handed out suspended prison sentences for illegally evicting their tenant, after a judge tells them “landlords are not above the law”,

Mark Cashin and Rory Taylor were told by the judge that some “landlords think they’re above the law, but they’re not”, before he sentenced the two men for the harassment and illegal eviction of their Sheffield tenants.

Mark Cashin was sentence to 18 weeks in prison, suspended for two years, while Rory Taylor was sentenced to 12 weeks in prison, suspended for 12 months, for several property related offences.

The court heard how Cashin and Taylor’s conduct had resulted in harassment followed by the illegal eviction of a man living in their property in Woodstock Road, Netheredge in January 2016.

Cashin of Haddon Road, Bakewell had been a property manager working for Hallam Hills Ltd, and began harassing the tenant. Although the tenant was not in rent arrears, Cashin began threatening him with a series of text messages, and verbally abused him, telling him he would send someone called Jamie Ross round to “deal with him”.

Later, Ross and Taylor, of Far Lane, East Dene, went round to the property on the 3^rd of February, 2016 and kicked down the door, before bagging up all the man’s possessions and throwing them out in the hallway, leaving a “Mickey Mouse” eviction notice drafted by Cashin.

Following this, South Yorkshire Police and Sheffield City Council became involved.

Cashin further admitted to harassing a female tenant in September 2015 at her address in Sheldon Road, Netheredge. She had asked Cashin to replace a broken washing machine at the house in multiple occupation (HMO) she was sharing.

The court heard that Cashin, who has previously been convicted of 54 property offences, had threatened to evict the woman and “throw her clothes out on the street” when she told him that if there was no machine she was going to deduct the cost of using a launderette from her rent payments.

Jamie Ross, of no fixed address, was sentenced to 12 weeks in prison, suspended for 12 months, and a further 120 hours of community for harassment of tenants, during a hearing at Sheffield Magistrates’ Court in September 2016, after admitting to the offence.

(Image shows Sheffield Town Hall)

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Bank hints at interest rate rise in May

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Interest Rates:

At the last Monetary Policy Committee (MPC) meeting on the 22^nd of March the Bank of England committee decided to leave interest rates as they are at 0.5 percent, but it hints at a rise in May, which if it comes would most likely be another quarter percent rise to 0.75 percent.

The Bank appears to be on a path of warning people that there are rises coming, with the Bank governor Mark Carney saying in February that everyone should start preparing for more rapid interest rate increases.

The March decision was not unanimous, with two members in favour of a rise to 0.75 percent right now, which is a departure from the unanimous vote at the February meeting.

Last November the BoE committee raised rates one-quarter percent 0.5 %, the first increase in the Bank Rate for 10 years.

The MPC said at this latest March meeting that with inflation above the Bank’s 2 percent target “ongoing tightening” was likely.

The same week the Office for National Statistics had said that consumer price inflation was 2.7% in February, which is down slightly from the 3 percent figure on the previous month, which itself was the lowest figure since July 2017.

Other experts including Alan Clarke of Scotiabank and Samuel Tombs at Pantheon Macroeconomics are reported as saying they are confident there will be a rise in May, and most likely further rises in the autumn or winter.

The National Institute of Economic and Social Research (NIESR) has called for a 0.25 percentage point rise going forward every six months, which would bring the bank rate to 2% by 2020-21.

The only thing that could change this path is if inflation were to fall quicker than expected and if economic growth remains weak, as too steep a rise would subdue growth and put the dampers on the economy at a crucial time – as we leave Europe.

Official figures released in March show that average earnings rose by 2.6% in the three months to January, which was at the fastest pace since 2015, and the government appeared to relax its austerity clampdown on public sector pay with a one off 6.5% pay increase for selected groups of NHS workers over three years.

This will put further pressure on inflation which could make it harder for the Bank to get it under control, without another rise in interest rates.

[Source: Bank of England]

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Make Energy Improvements Tax Deductible Say Landlords

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MEES:

Energy efficiency improvements undertaken by landlords and recommended on Energy Performance Certificates should be tax deductible the country’s leading landlord organisation argues.

From 1st April, all new tenancies and those being renewed will require properties to have an Energy Performance rating of E or better. From April 2020 the rules will apply to all rental properties.

Whilst the Government has said that landlords unable to access funding to make such improvements can register that their property is unable to meet the new standards, it is proposing that in due course a new £2,500 cap be introduced on the amount a landlord should be expected to pay to make the necessary improvements to their properties.

The Residential Landlords Association is arguing that all improvements a landlord carries out that are recommended on an Energy Performance Certificate should be tax deductible. Currently landlords may make such a deduction for ‘repairs’ but not for ‘improvements’. Such a policy would support landlords in all property types to make ambitious energy efficiency improvements, beyond just those who are required to bring their properties up to the Government’s target.

Linking tax relief to what is recommended on a Certificate would help to prevent abuses.

Recent research by RLA PEARL has found that 61 per cent of landlords would be encouraged to improve the energy efficiency of their properties if there was tax relief to do so.

According to official data, 6.6 per cent of private rented homes in England are rated either F or G for energy efficiency improvements.  This is down from 25.3 per cent a decade earlier.

David Smith, Policy Director for the RLA, said:

“Whilst considerable improvements have been made over the last decade, private rented homes currently falling below the new energy standards are some of the hardest to treat properties of the country’s entire housing stock.

“Given the importance the Government attaches to improving the energy efficiency of rented homes there is a strong case for giving work to upgrade this the same tax treatment as for repairs.”

The Residential Landlords Association: The home for landlords

• The RLA represents the interests of landlords in the private rented sector across England and Wales. We’re home to over 50,000 landlords nationwide, with a combined portfolio of over a quarter of a million properties. A growing community of landlords who trust and rely on us to deliver day-to-day support, expert advice, government campaigning, plus a range of high-quality services relevant to their needs.
• At the RLA, we understand the challenges faced by a landlord – after all, we’ve been fighting their corner for over 20 years.
• We campaign to improve the private rented sector for both landlords and tenants, engaging with policymakers at all levels of Government. Our vision is to make renting better for everyone involved in the private rented sector.
• RLA PEARL’s recent research on taxation of the private rented sector can be accessed here
• The latest English Housing Survey for 2016/17 can be accessed here It finds that across England. 1.8% of private rented properties have an energy rating of G and 4.8% are rated F.  In 2006 the figures were 6.9% and 18.4% respectively.
• The English Housing Survey finds also that 35% of private rented homes were developed before 1919 compared to 20.6% of owner occupied properties and 6.6% of social rented housing.

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Energy efficiency deadline for landlords on Sunday

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EPC Deadline:

The deadline for meeting the new Minimum Energy Efficiency Standards (MEES) falls on Sunday 1^st of April (Easter Sunday), but according to ARLA Propertymark there are still thousands of landlords either not aware of the new rules or haven’t as yet done anything about them.

From next Sunday all rented properties on new lettings (including renewals) will have to comply with the MEES regulations or face a heavy fine.

Every buy-to-let property will have to meet the minimum energy efficiency rating and obtain an energy performance certificate rating of “E” or above, but it is evident that there are still many thousands of landlords with rental properties that fall into the F or G ratings bands.

With Sunday’s deadline looming, some landlords will face fines of up to £4,000 when they come to re-let or renew their tenancies, or otherwise face losses through having their property stood empty while it’s brought up to standard.

Any landlord in this position should be making plans now to bring their rental up to standard, otherwise they could also face difficulties when it comes to mortgage applications and renewals.

The Private Rented Property minimum standard – landlord guidance documents here

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Ground rent school boy error?

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Hi All, Ive made a bit of a school boy error here.

I have a small portfolio, and my last purchase around 4 years ago was a flat in South London had the following clause for the ground rent: Ground Rent £250 Reviewed every 10 years by a factor of 2 or by RPI whichever the greater.

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Eviction – This will make you angry!

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The housing charity “Shelter” have formally admitted that it can take a landlord 8 months (or more) to evict a tenant using a section 21 notice. The admission is in the form of their latest viral video campaign. Despite this

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Highly Commended Buy to Let Mortgage Broker of the Year

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We are delighted to report that another Property118 member Mark Edwards, MD and founder of Mortgages and Insurers Solutions, has led his company to winning the award for “Highly Commended Buy to Let Mortgage Broker of the Year” at the Business Moneyfacts Awards 2018.

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Rogue Landlords renting out Overcrowded and Dangerous Homes targeted

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New Legislation:

The Ministry of Housing, Community and Local Government (MHCLG) is currently putting new regulations before parliament (see link below) with the objective of keeping the pressure on rogue landlords. In a bold move to crack down on overcrowding and dangerous living conditions experienced by a minority of tenants in HMO’s, MHCLG want to make life as difficult as possible for those landlords who will not follow the rules.

Local councils are being encouraged to inspect more and more properties, with new powers to tackle that minority of rogue landlords who rent out overcrowded or dangerous properties. Councils will be able to impose fines of up to £30,000 for non-compliant landlords.

From the 1st October this year the regulations will empower councils to specifying minimum bedroom sizes, and they will be given the necessary powers to quickly enforce those limits, with the now expanded mandatory HMO licensing scheme setting down these and a host of other conditions:

• Floor area of any room HMOs used as sleeping accommodation by one person aged over 10 years is not less than 6.51 square metres;
• Floor area of any room in the HMO used as sleeping accommodation by two persons aged over 10 years is not less than 10.22 square metres;
• Floor area of any room in the HMO used as sleeping accommodation by one person aged under 10 years is not less than 4.64 square metres;
• Any room in the HMO with a floor area of less than 4.64 square metres cannot is not used as sleeping accommodation.

Housing Minister Heather Wheeler has said about the new measures:

“Everyone deserves a decent and safe place to live. But some tenants are being exploited by a minority of unscrupulous landlords who profit from renting out cramped and sometimes squalid or dangerous properties.”

“Today’s measures will mean landlords must provide adequate space for their tenants or face a hefty fine. It is part of a raft of new powers for councils to crack down on rogue landlords and comprehensive action we are taking to improve conditions for private tenants.”

With recent cases of tenants suffering health issues due to accommodation that does not meet relevant size or health & safety standards, local authorities under the proposed legislation would be able to set a deadline of up to 18 months for the situation to be rectified.

The Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018

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Rent Payment in advance – Which tax year?

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If rent is due monthly under the terms of an AST, but the tenant pays 6 months rent in advance then if the time period the advance rent covers straddles a tax year is the full rent recorded in the tax year it is actually received or is it applied pro-rata?

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