Looming EPC rules to cause mayhem in the rental market, warns senior figure

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A staggering one-third of landlords plan to quit the sector or do nothing to address energy efficiency failings if and when new EPC regulations kick in.

Research carried out on behalf of Paragon Bank reveals that 21% of landlords would not carry out any necessary works to bring their property up to a band C, and would either sell up or not re-let it, while 12% wouldn’t carry out any works, continuing to let their property until 2025 for new tenancies and 2028 for existing tenancies – the dates currently proposed by the government.

It found 33% would do the works at the minimum cost required to comply, and continue to let the property out.

Paragon’s survey of more than 700 landlords also discovered a gulf in the amount that landlords are willing to pay and what it is actually likely to cost.

Just over three-quarters (77%) would spend up to £3,000 to upgrade each property to an EPC band C, while analysis by the specialist mortgage lender reveals that 78% of landlords would need to spend over this amount.

£10,000 per property

The reality is that, taking into account the government’s proposed cap of £10,000 per property, the average cost to upgrade to a C would be £10,560, says Paragon.

Six in 10 landlords said they would use savings to fund the work, followed by 27% who would increase rent. Almost one in five (19%) would rely on government funding.

Read more about the MEES laws.

Richard Rowntree (main image), Paragon’s mortgage boss, says the sector needs some clear guidance from the government to understand the resulting financial support needed.

He adds: “This means that mortgage lenders have an important part to play in supporting landlords. Without this support, and the full backing of politicians, we may see landlords cut their losses and exit the sector altogether.”

Read more about the challenges of the EPC system.

View Full Article: Looming EPC rules to cause mayhem in the rental market, warns senior figure

Portfolio landlords research by Handelsbanken

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Handelsbanken has conducted new research among a small but niche panel of 120 professional landlords managing a total of 829 properties in the UK on their outlook for the industry, the challenges they faced during the pandemic, the impact of new EPC legislation on their portfolio and their succession plans.

View Full Article: Portfolio landlords research by Handelsbanken

Tenants complain but won’t take action?

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Looking through the thousands of posts on this forum, you quickly get the impression that landlords are wicked scoundrels and tenants complain about them constantly.

It’s the same in my world of block management. Long leaseholders complain about high service charges

View Full Article: Tenants complain but won’t take action?

New rent guarantee service ‘first to eliminate rent arrears and voids for landlords’

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A letting agent is guaranteeing landlords that it can pay out their total rent every month, regardless of void periods and late payments.

London and overseas firm Holland Properties’ new service – Holland Assurance – aims to guarantee a consistent income for investors, even if their tenants miss a payment.

Tenants don’t pay the company up front, but as per a normal letting agreement, it explains. For landlords, there’s no need to wait for tenants to pay, as they receive their income regardless of when payment was made, even when tenants are in arrears.

All property breakdowns get combined into one single statement, once a month, on a chosen day. 

The company also guarantees an increase on the rent for the first year based on a landlord’s current rent, while paying out even if the property is empty, depending on the property, area and current rent.

Financial problems

“Landlords can be assured that in case of any financial problems, their rent is protected by tenant referencing,” according to MD Sheldon Cole, who believes that his is the first property firm offering this kind of guarantee.

“It is a bold and dynamic move that pushes boundaries, but we are confident we can deliver,” he says.

“Our total transparency, openness, and honesty, alongside our service standards has always set us apart from our competition and now we can offer an assurance to our clients as well to make their lives easier.”

Holland Properties adds that the launch comes at a time of scrutiny for usual rental guarantee services, which can see agencies sometimes charge tenants an extra fee that the investor doesn’t see. 

Read more about rent guarantee products.

View Full Article: New rent guarantee service ‘first to eliminate rent arrears and voids for landlords’

Payments on Account: What you need to know

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It’s time to make your next tax payment – Don’t miss the deadline!

It seems like summer is finally here – time for barbeques, picnics, beer gardens – and your next Payment on Account!

31st July 2022 stands as the deadline for taxpayers to pay their second payment on account towards their 22/23 tax bill – some of you may have already received letters about it from HMRC.

What is a payment on account?

The Payment on account system was brought in by the revenue as a way of receiving tax payments from tax payers in advance of their tax return submission and the tax year ending.

It is calculated using the previous year’s tax liability as the estimate for the next year. When you submit your tax return for the last tax year, you are also required to pay 50% of that liability towards the current tax year’s liability. Then come July 31st, you are required to pay another 50% – so by the January deadline, you just need to pay the difference between the payments already made, and the actual liability.

If we take the following as an example:

Tax year 2019/20 was your first year trading.

31 January 2021 – Tax liability for 19/20 is due PLUS Payment on Account 1 (50% of the 19/20 liability, towards the 20/21 liability)

5th April 2021 – End of 20/21 tax year liability is calculated

31st July 2021 – Payment on Account 2 is due (remaining 50% of the 19/20 tax liability)

 31st January 2022 – Balance of 20/21 tax liability is due PLUS Payment on account 1 for the 21/22 tax year.

It sounds pretty complicated, and to be honest it’s not the easiest system to get your head around! So to help you we have added a section on paying your self assessment tax bill to our Ultimate Guide to Self-Assessment Tax Returns. We have even included an easy to follow “how to” video!

Do I have to make payments on account?

This depends on your liability, and other circumstances. If you have a total liability of less than £1000 (not including tax deducted at source, such as PAYE) then you do not need to make payments on account.

If you know that your liability is going to be lower than the previous year then you can request a reduction in your payment on account from HMRC.

How can this system help me?

Although the tax return isnt due to be submitted and balance paid until 31st January, using the 31st July Payment on account date as an aim for submitting your tax return could be a huge benefit.

If you calculate your tax return in July/August – then you will know the balancing payment and next year’s liability 6 months before you are due to pay. This could be a valuable time to sort cash flow, or request reductions in your payment on account, if needed. It can also give you time to make any tax planning decisions for the current tax year. 

Thousands of taxpayers are already starting to submit their 21/22 tax return – but it doesn’t have to be a complicated process – you can calculate your tax liability for FREE using  APARI Simple Self Assessment.

View Full Article: Payments on Account: What you need to know

LATEST: Portfolio landlords to buy more properties as rental demand soars – claim

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Nearly half of landlords with multiple properties plan to expand their portfolio in the next year, bucking the trend of those reportedly looking to sell up.

New research from Handelsbanken reveals that 49% of professional landlords – those owning at least four properties – intend to buy more, while 8% plan to invest in improving the quality of their portfolio.

Despite fears of an economic downturn and the cost of living crisis, only 7% of landlords expect to sell some or all their portfolio, while a third (35%) are keeping their current properties for the next 12 months.

Handelsbanken’s poll of 120 professional landlords finds that many hope to diversify their assets across different sectors and regions, with London seen as the most attractive place to invest (chosen by 53%), followed by the East of England (40%) and the East Midlands (22%).

When it comes to the type of property they have their sights set on, houses come out top (66%), followed by flats (38%), HMOs (34%) and commercial retail (32%). The survey also found that 86% of landlords expect a rise in demand for residential property, with nearly two-thirds (63%) confident that commercial property demand will also increase.

Buoyant

James Sproule (pictured), UK chief economist at Handelsbanken, says: “Landlords are anticipating that a shortage of rental properties will help keep prices buoyant, particularly as working patterns continue to adjust to the post-pandemic world and people seek to move back to big cities, particularly in popular areas such as London, which is also seen to be better placed to ride out the next series of economic challenges and opportunities.

“Landlords went through a tough period following the COVID-19 pandemic, with residential property transactions falling by more than half and business investment contracting. But the sector has survived and is now looking forward.”

View Full Article: LATEST: Portfolio landlords to buy more properties as rental demand soars – claim

Bank of England Governor prepares us for possibility of 0.5% base rate increase

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Andrew Bailey, Bank of England Governor, gave a speech yesterday at the Mansion House Financial and Professional Services Dinner. Although he did not and could not give an indication of what the Monetary Policy Committee’s decision would be for the next Bank Base Rate vote on the 4th of August

View Full Article: Bank of England Governor prepares us for possibility of 0.5% base rate increase

New podcast from LRG, hosted by radio legend, Ian Collins, discusses what landlords are likely to get caught out on

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Radio host Ian Collins spoke to Michael Cook, Group Managing Director and Mark Giacomin, Policy & Guidance Manager at Leaders Romans Group, and independent property expert, Kate Faulkner, about the tough job landlords have of staying up to date with lettings legislation.

The podcast started with a discussion on why it’s so tough for landlords to keep up with lettings legislation. Michael explained that with around 168 laws covering over 400 individual rules and regulations – with many new ones added each year and existing ones changed – it’s a tough ask for landlords to keep track, especially if they have a full-time job that’s not in the property market.

Michael shared that he’d done a test of his own, first self-managing a property to let, then outsourcing it to an agent. Although he had to pay for the agent’s service, the costs were tax deductible and it wasn’t just the fact that the legislation was taken care of, he was also surprised how much time it saved him. In addition, he’d struggled to increase the rent while he was self-managing, as he’d got on so well with the tenant and didn’t want to cause any problems!

Kate explained that while keeping up with ever complicated legislation across different countries and local authorities in England is tough for landlords, there’s also the threat of increasingly severe penalties if they fall foul of the law.

Local Authorities can fine landlords up to £30,000 without having to go to court and they can dish out these penalties for even accidental admin errors, such as not licensing a House in Multiple Occupation, not giving tenants the correct ‘prescribed information’ at the start of their tenancy or, as Michael pointed out, not protecting deposits properly, which can result in landlords having to return more than three times the deposit amount to the tenant. For the most serious legal breaches, landlords can be issued with a banning order preventing them from letting property and even sent to jail.

The panel agreed that to be successful at buy-to-let, landlords had to find a reliable way to stay on top of the legislation – or outsource the responsibility to a qualified letting agent that’s a member of ARLA Propertymark or RICS. They added that continuing to invest in maintaining and upgrading your buy-to-let is essential if you want it to keep delivering the best returns.

Both Michael and Mark highlighted that one of the key mistakes landlords make is not keeping rents in line with the market. Over time, the rental income is eroded by inflation, reducing its real value and making it hard to keep affording property repairs and renovations. Consistently raising rents a little every year helps ensure your buy-to-let continues to deliver enough income to cover all ongoing costs, plus extra to keep the property in top-notch condition so it appeals to the highest paying tenants.

And this is where they feel the job of a good letting agent comes in. Not only can agents help you find the best buy-to-let for the local area that will achieve your investment objectives, but they know how to keep it legally and safely let and understand the importance of having the means to upgrade the property to retain or improve its value over time.

Listen to episode 1 of The Property Crowd here.

View Full Article: New podcast from LRG, hosted by radio legend, Ian Collins, discusses what landlords are likely to get caught out on

HMOs: Time for the sector to promote its superstars and face down critics

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Many landlords grumble that HMOs get an unfairly hard time from housing campaigners, councils and local press not to mention via social media. But now the sector has a chance to fight back.

The HMO Awards, whose organisers have just published the inaugural list of nominations, aims to present a different view of HMOs by handing out awards to the best operators.

These will now be judged by a panel of experts and well-known figures including Landlord Action founder and TV star Paul Shamplina (pictured), NRLA Chief Executive Ben Beadle and YouTube influencer and landlord Ranjan Bhattacharya.

But its organiser, property management platform COHO, is asking LandlordZONE readers to help out by promoting this initiative either by old-fashioned word of mouth or via social media.

About time

“It’s about time that the HMO specialist sector, which is often forgotten or labelled too niche, pulls together and that those working hard to make great examples are recognised for their dedication to help shape the future landscape for shared living,” says COHO co-founder Helen Turner (pictured)

Hundreds of organisations and individuals have been nominated across 18 different categories from across the country.

Nominees

Those nominated included of HMO investors who have done something amazing with a commercial to HMO conversion or investors who specialise in social housing HMOs, as well as shared living operators, HMO management specialists and service suppliers.

Once the winners have been chosen, an awards ceremony is being held on September 30^th at Stowe House in Buckinghamshire, preceded by a networking event.

You can check out all the nominations here. Apply to buy discounted tickets to the event here.

Vann Vogstad, Founder & CEO of COHO says: “The HMO Awards aim to bring people across the HMO property supply chain who are helping to shape the current and future shared living landscape across the UK together to network, learn, celebrate, and grow”.

View Full Article: HMOs: Time for the sector to promote its superstars and face down critics

Do landlords deserve to lose their Buy to Lets?

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Four weeks since the ousted Gove released his White Paper for a “fairer private rented sector,” Landlords are taking stock of how best to deal with the upcoming changes they now need to make to their buy-to-let portfolios in a bid to meet the criteria of a “levelled up” housing standard for tenants. It’s come at a difficult time: many of us are mid-incorporation, many of us are facing huge tax bills, many of us knew we’d have to refurb our portfolios but simply can’t take the financial hit of doing it all at once with such little time. Then there’s the very real threat of recession just around the corner.

It’s understandable to see why so many landlords have been left frustrated, angry or worried by the mammoth task ahead and, for a huge proportion of us, it seems the clock has well and truly ended on our portfolios being profitable enough to weather the storm. But what’s the solution? Have landlords been riding off a gravy train of profits for too long at the expense of tenants? Do we deserve to lose our portfolios as we struggle to meet the mounting costs of clinging on? The answer is surely no, but the obvious solution for a vast majority is that it’s time to get out of the landlord business, and if we’re going to get out, we want to pick a moment where we can cash in for the highest possible prices. That time is now. It’s time to “box clever” and sell up before the recession and cost of living hits our prices and sales.

As the CEO of Landlord Sales Agency, I should know. In 2021 I predicted exactly this, and came up with the best solution to help landlords when the moment was required. I created a power team of experts who would be ready to help landlords sell up for the highest possible prices, fast, and like many other savvy landlords right now, I’ve done it for my own portfolio. You cannot escape the fact that now is the highest release of equity you’ll get for another 7 years. Whether you decide to sell part or all of your portfolio, you need to act now and start selling while the window of opportunity to get out is still open and there’s no better company to help you than ours. If you’re clever, you can still win, and we’re here to make sure you win for the highest amount possible.

Unlike other companies, we’ll solve every single one of your problems to ensure you get the smoothest possible sale:

• We have a list of buyers who will buy your properties without having to evict tenants. This dramatically cuts down the time it takes to sell, plus means that you can continue collecting rent all the way up until the actual sale. For those properties that require evictions, we personally help your tenants relocate, or help them financially to find a new place.

• No matter how many houses you have, or in what condition, we’ll take them all off your hands, and get you the highest price for your portfolios in less than 21 days. We sell entire property portfolios, or partial portfolios in bulk in one go.

• We’ve got an extensive list of over 30,000 private buyers and relationships with the top property buying companies. Most of our portfolios sell within a week which is exactly what landlords need right now. We simply don’t have time to waste.

Landlord Sales Agency sell properties either in one go as a full portfolio or as single units, depending on your instruction. Unlike traditional estate agents, or other property buying companies, both methods are extremely fast. We work quickly to collect information about rent, tenant history, running costs and ensure all certificates are in place to guarantee the sale is not delayed. If any certificates are missing, we have a team of engineers, builders and experts who will get all the certificates and paperwork done for you. The stress is completely removed out of the sale, and seller involvement is kept to a minimum so you can relax knowing it’s in swift and extremely capable hands.

Furthermore, at Landlord Sales Agency we take our promise to ‘solve any landlord problem’ so seriously that, as a result of the number of enquiries we’ve received from landlords with cash flow problems, we can also use the equity tied into property to offer an interest free loan of up to £20,000 to be repaid on completion.

We know what it’s like right now to be a landlord who is thinking of selling, and who wants to release cash. We’re so confident in what we do, we can afford to go the extra mile to really help landlords get through, and get the highest possible price for their property portfolio before the market drops. We’ll also ensure we never compromise on the sale price no matter how much work your portfolio needs. We typically achieve 80 – 90% of the market value, and for that we cover all the costs and take away all the hassle that comes with selling the portfolio. We’re completely transparent, so you know exactly what we’re making. You won’t get a higher price for the service, and any company promising you 100% market value is hiding a huge list of costs that are going to come after the sale. That’s not the case with us. It’s what makes us different.

We’re here to help, and we understand that now is the window for landlords to get out. It’s a crucial time, but we’ve been preparing for exactly this, and we’re here to get the job done.

If you want to exit the market before the predicted fall in property prices, talk to us today.

Contact Landlord Sales Agency:

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View Full Article: Do landlords deserve to lose their Buy to Lets?