Tenant refuses to leave from property I was sold as vacant possession!

admin    Uncategorized     agents

Hello everyone, I’m looking for advice as to what to do in a very difficult situation I’ve landed in.

I bought a property at auction with the seller stating the tenant had been served a section 21 notice and would be gone prior to completion

View Full Article: Tenant refuses to leave from property I was sold as vacant possession!

Landlord to pay tenants £10,000 after losing RRO legal appeal

admin    Uncategorized     agents

A landlord has been hit with a £9,880 rent repayment order after failing to convince a tribunal that his tenants’ application was not legal.

Gopiraj Krishnasamy admitted that he had held a selective licence which limited occupation to five people from one household but hadn’t applied for the necessary additional licence after renting the property in Barking Road, London, to tenants from more than one household.

He told a First Tier Property Tribunal that he ceased to commit an offence on 12th May 2021 when he made a statutory notification to Newham Council, arguing that the three tenants had until 12th May 2022 to submit their application, which wasn’t made until July 2022 and was thereby out of time.

But he had served a Section 21 notice on 9^th May 2021 which meant the property was still an unlicensed HMO.

Proper notification

The tribunal ruled that at the date of service, no Section 21 notice could be given in relation to the property meaning that it was not a proper notification.

Krishnasamy owns and lets out six properties and is a director of a company that owns and lets out one other property which has an HMO licence.

It heard that he uses professional managers and is also a member of a landlord organisation.

The tribunal ruled that the length of the offence was of concern as it stretched over 22 months from August 2019 to July 2021.

Despite this, it considered that the property was in good order and was in a fire-safe condition, so set the RRO at 50% of the £19,760 rent claimed between July 2020 and July 2021, along with fees of £300.

View Full Article: Landlord to pay tenants £10,000 after losing RRO legal appeal

Making Tax Digital for Income Tax on hold, again!

admin    Uncategorized     agents

If you were due to submit a self-assessment tax return and pay your dues by yesterday’s deadline and you missed it you should do so now without delay, otherwise you will face a penalty. Anyone with rental income must submit a self-assessment income tax return, completing the property income section.

Making Tax Digital Delay

HMRC says that after discussions with the various professional bodies involved, software providers and tax accountants it has now confirmed that MTD for Income Tax will be delayed by a further two years, until April 2026.

However, there are still some important changes for all business and landlords, read on…

Making tax digital (MTD) for income tax self-assessment was originally planned to commence in 2018 but Covid and other delays put this deadline back to 2023, and then it became 2024. However, it was announced just before Christmas that the new system of submitting digital information quarterly to HMRC has been delayed yet again!

The start date will now be dependent on the gross business receipts of individuals. The new target is for self-employed business people and landlords, those with gross annual receipts above £50,000 will need to enter the MTD for income tax from 6 April 2026. Those with gross annual receipts between £30,000 and £50,000 will be included from 6 April 2027.

So good news for those small-scale landlords with rental incomes at the lower end of the scale: it looks like the original £10,000 threshold has now been scrapped and raised to those with annual gross receipts above £30,000, it’s under review but it would appear that the government may have finally bowed to pressure and increased the starting threshold from the £10,000 figure, which would have brought into the MTD regime a lot of private landlords.

The changes in brief:

The two-year delay is also accompanied by other changes. The new implementation plan for MTD for income tax after April 2026 is as follows:

– Minimum income reporting threshold increased to £50,000, from the initial threshold of £10,000

– Those with business income above £30,000 will join MTD in April 2027

– Those with income below £30,000 may not be required to enter MTD, though this is to be reviewed.

MTD, the plan

Originally intended to increase efficiency for businesses and HMRC, going digital would mean eventually cutting down on administrative time and cutting out fraud, the scheme was first floated as an idea in 2015.

It requires completing a quarterly return to HMRC rather than the present system of annual reporting for self-assessment tax returns. MTD would represent a major change in the way income tax self reporting is handled in the UK, necessitating the development and use of compatible commercially available software.

The system would provide an estimated tax calculation based on the information provided to HMRC, to help taxpayers budget for tax. At the end of the year, any additional or non-business information can be added and a finalised tax calculation made. MTD therefore replaces the annual Self-Assessment tax return as we know it.

Benefits of digital

Business and landlord taxpayers are therefore being advised that switching to a digital system using appropriate and compatible software, regardless of your level of gross income, is still a good idea.

The new business Tax Year Basis to go ahead

Change is still coming for all businesses and landlords because although the start of MTD for income tax has been delayed until 2026 at the earliest, the start date of the new regime for taxing the profits of unincorporated businesses on a Tax Year Basis is not being delayed. This transition is to take with effect from the tax year to 5 April 2024.

This will be a major change for those smaller unincorporated businesses that prepare their accounts to any date other than the normal tax year, 5 April or 31 March. From 6 April 2024 all such businesses will have to calculate their taxable profits from 6 April to 5 April each year, regardless of their normal accounting year end date.

For example, for a sole trader or partnership making up its accounts to 31 December each year, their 2024/25 profits would have to be calculated as 9/12ths of their profits for the year ended 31 December 2024 plus 3/12ths of their profits for the year ended 31 December 2025.

This will mean doing an estimate of profits for the later period (3/12ths) with a subsequent amendment once the actual final figures are available. It is for this reason many businesses would benefit from changing their accounting date and also going digital.

There’s a change in the way that profits are to be taxed for the 2023/24 tax year. The upcoming tax year will be a “transitional year” with some complicated HMRC rules for calculating business profits. For many businesses the change could result in a higher tax bill initially, affecting short term cash flow.

So, although MTD for income tax will apply only to the self-employed and landlords initially, the tax year basis changes will soon apply to all unincorporated businesses, including partnerships and LLPs, and those with profits of less than £50,000.

Speak to your accountant in good time.

View Full Article: Making Tax Digital for Income Tax on hold, again!

House prices continue to fall – Nationwide

admin    Uncategorized     agents

House prices have now fallen for the fifth consecutive month, Nationwide says.

Its latest house price index reveals that in January, the average house price fell 0.6% from December to £258,297.

And annual house price growth continues to slow –

View Full Article: House prices continue to fall – Nationwide

Manchester Council are profiteering at 200% Council Tax charge

admin    Uncategorized     agents

Well, it seems the war on landlords continues and all morality from the Government and city councils is lost. Please see the link to the latest consultation on Council Tax for Manchester.

As per usual for the Government and city councils

View Full Article: Manchester Council are profiteering at 200% Council Tax charge

Who are the best UK Property Educators?

admin    Uncategorized     agents

I don’t have a lot of money but I am passionate about property investment, development, flipping etc. and want to learn the following wealth-building techniques from the best of the best:-

1. How to source and package viable property projects with a view to selling those deals on to other investors
2. How to put joint venture deals together
3. How to attract investors
4. How to identify viable residential to commercial development opportunities
5. How to make the most of networking events
6. Affiliate marketing opportunities associated with property networking

Some people have told me that I’m wasting my time

View Full Article: Who are the best UK Property Educators?

Rising number of tenants forced to leave Scottish private rental sector

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The number of households becoming homeless from private rented tenancies in Scotland is now higher than it was pre-pandemic, according to new government data.

It reveals that homelessness from a private rented tenancy accounted for 19% of homeless households between April and September 2022, an increase from 14% the previous year and from 17% in 2019. The main reason was being asked to leave (down from 27% to 25%) but there was a notable increase in ‘other action by landlord resulting in the termination of tenancy’, which surpassed pre-pandemic levels (up from 6% to 11%).

Rent arrears

The Scottish government says that the slight increase in ‘termination of tenancy/mortgage due to rent arrears/default on payments’ (up from 1% to 2%) was likely a result of the end of the ban on evictions, home repossessions and mortgage deferrals in September 2021.

The figures show that homelessness applications, open applications, and households in temporary accommodation have all increased. There were 28,944 open homelessness applications in September 2022, an increase of 11% from 2021 and the highest since records began in 2002. There were 19,066 homelessness applications recorded from April to September, an increase of 6%.

Supply issues

The government says the increases were partly the result of the backlog of cases built up during Covid and the ongoing cost and supply issues for materials and lack of tradespeople required to provide settled accommodation. Its Cost of Living (Tenant Protection) (Scotland) Act introduced last October to protect residential tenants from increases in rent and from eviction won’t have impacted the data, which only covers up to 30th September.

Earlier this month, The Scottish Association of Landlords, Scottish Land and Estates and Propertymark announced they were seeking a judicial review of the legislation after hearing that rent controls for the PRS would continue, but would be removed for the social rented sector from 1st March.

View Full Article: Rising number of tenants forced to leave Scottish private rental sector

Peterborough looks to repeat success of former licensing scheme

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Peterborough councillors have agreed to push forward with a new selective licensing scheme covering 40% of all private rental properties.

The scheme now needs the go-ahead from the full council next month and if agreed, would go to the Secretary of State for approval.

Its original scheme ran from December 2016 in 22 different areas of the city and according to the council, resulted in several improvements, including 284 properties where serious hazards have been corrected and a reduction in anti-social behaviour.

High deprivation

It reports that about 9,000 more properties in the PRS across 24 areas now fit the criteria for selective licensing, which include high anti-social behaviour and crime, poor property conditions and high deprivation.

Councillors have also agreed to analyse the potential for an additional licensing scheme covering three- and four-bedroom rental properties with shared amenities. It estimates there are up to 2,000 small HMOs in the city and says the introduction of additional licensing would also help regulate properties not covered by selective licensing.

Big success

Councillor Marco Cereste, cabinet member for climate change, planning, housing and transport, believes selective licensing has been a big success, with an improvement in the quality of private rental accommodation and a reduction in anti-social behaviour.

He adds: “As a result, we have seen widespread demand for selective licensing to be introduced across Peterborough, but we can only apply for a scheme in areas which meet certain criteria. We believe the revised scheme covers as many properties as possible.”

View Full Article: Peterborough looks to repeat success of former licensing scheme

Capital gains for landlords as tenants flock back to London

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Landlords with properties in central London saw the highest levels of tenant demand across England and Wales in the last quarter of 2022.

After falling out of favour during the Covid pandemic, the appeal of centrally located properties in the capital is growing, according to Paragon Bank research, which found that 94% of landlords with investments in central London reported strong levels of tenant demand. In the second quarter of 2020, just 12% of these landlords saw increased demand during the previous three months but this figure was up to 90% by the end of last year.

Landlord survey

The survey of more than 750 landlords shows that the overall proportion of landlords reporting increased demand during the previous three months has remained at the record high level seen in Q3 2022.

Other popular regions include the East of England and Wales, both with 92% strong demand, followed by the North East of England where 90% of landlords report that demand is strong.

Current boom

Richard Rowntree, MD for mortgages at Paragon Bank, says while the trend towards home working and an increased desire for access to green space was more evident among owner occupiers and probably overstated in its effect on the rental market, it is interesting to see the current boom in Central London.

“We see that the overall record high level of increased tenant demand reported in Q3 2022 continued into the final quarter of last year,” he adds. “This is unsurprising given the pressure on household finances and the relative affordability of rented homes, reinforcing the need for an environment that encourages investment in the private rented sector.”

View Full Article: Capital gains for landlords as tenants flock back to London

How long will the housing market slump last?

admin    Uncategorized     agents

Falling house prices will only last a couple of months, according to a new report.

The findings from GetAgent reveal that while 155,000 home sellers could be hit by a price drop, the organisation says that price depreciation will only last a matter of months before the market rebounds.

View Full Article: How long will the housing market slump last?