‘Landlords facing double whammy of higher materials bills and more tenants WFH’

admin    Uncategorized     agents

Tenants are piling pressure on landlords to fix a multitude of minor jobs, with boiler repairs and general wear and tear maintenance on the increase as a result of the trend to work from home.

“In the last few years, we have witnessed people being more cautious and trying to reign in their spending,” director Callum Lee (main picture) at Adam Lee Property Maintenance tells LandlordZONE.

“At the same time, we’ve never been busier as tenants are spending more time working from home and noticing when things go wrong.

“They’re also very quick to point this out to landlords, while pre-Covid, they might not have been so bothered about that wobbly door handle.”

The north-west London-based property maintenance firm deals with everything from same-day small plumbing, heating and electrical jobs to major refurbs and new builds, working with landlords, estate agents and management companies.

Rising costs

“Rising labour and materials costs – sometimes by as much as 40% in the last couple of years – as well as a shortage of skilled labour are hitting home across the maintenance sector, he adds.

“It’s hard to get a workman to drive across London, to pay the congestion charge and parking, and do a small job, but this is what tenants want done.” 

Despite this, many landlords are grateful they’ve got good tenants and are now often more open to agreeing to get work done, says Lee who’s currently dealing with a list of more than 70 maintenance issues pointed out by one very new tenant, of which 75% are “very picky” – but he reckons the landlord will probably agree to fix them all.

However, there will always be those who are reluctant to spend any more than they have to, and insist tradesmen should patch up a shower leak with silicon rather than spend more to investigate the problem.

“Sometimes we’ll get a call a few months later from the landlord saying the leak has come back and our work wasn’t good enough. We have to be diplomatic,” Lee adds ruefully.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Landlords facing double whammy of higher materials bills and more tenants WFH’ | LandlordZONE.

View Full Article: ‘Landlords facing double whammy of higher materials bills and more tenants WFH’

What about landlords’ rights? Association says Scots plans to protect tenants ‘unfair’

admin    Uncategorized     agents

Landlords’ rights will be eroded if the Scottish government goes ahead with plans for PRS reform in its draft rented sector strategy, according to Propertymark.

The association believes the tenant-centred approach of A New Deal for Tenants overlooks the needs and rights of letting agents and landlords, particularly around their ability to seek possession of properties.

The government is currently consulting on proposals which include a system of rent controls, setting up a regulator for the private rented sector, and creating a new housing standard covering all homes.

In its response, Propertymark opposes rent controls and describes a proposal to ban winter evictions as “unnecessary and unworkable”.

It is also against the removal of mandatory grounds for possession and is “deeply concerned” that such a change would make the uncertainties around possessions too risky for landlords and that some will simply quit.

Propertymark adds that without providing incentives to stay, it risks losing investment and properties from a sector that is already struggling to keep up with demand.

As a flavour of how ‘tenant-centre’ the New Deal for Tenants is, throughout it the word ‘tenants’ appears 289 times — nearly twice as many times as ‘landlords’ (165 times).

Daryl McIntosh, policy manager for the UK devolved nations, says that by considering tenants in isolation, policymakers are showing little regard for the legal rights of landlords and their letting agents.

“The Local Government, Housing and Planning Committee has just published its scrutiny of the Coronavirus (Recovery and Reform) (Scotland) Bill in which it too leans favourably towards tenants, despite hearing warnings directly from landlords that permanent changes to the possessions process would place too much financial risk on them and could force more to sell up,” says McIntosh (pictured).

He adds: “The sector is already under huge strain and desperately in need of more investment, not less, so we urge the Scottish government to carefully balance its reforms to ensure any interventions to achieve short-term objectives do not lead to market failure in the long run.”

The comments by Propertymark have not gone down well with local housing rights campaigners. Living Rent, the country’s largest tenants’ union, has slammed the comments and suggested the trade body is trying to shield landlords from the “biggest squeeze in income for generations”.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – What about landlords’ rights? Association says Scots plans to protect tenants ‘unfair’ | LandlordZONE.

View Full Article: What about landlords’ rights? Association says Scots plans to protect tenants ‘unfair’

ONS data for cost of living crisis – 34% of renters reporting rent increases

admin    Uncategorized     agents

The Office for National Statistics has released its latest report using data from the Opinions and Lifestyle Survey analysing how different demographics have been affected by an increase in their cost of living from November 2021 to March 2022: Click here

The results show housing costs have also been a growing contributor with 34% of renters reporting their rent had increased in the last six months

View Full Article: ONS data for cost of living crisis – 34% of renters reporting rent increases

‘More government regulation of the PRS won’t work – here’s why’

admin    Uncategorized     agents

It is common to hear from both politicians and campaign groups that the Private Rented Sector (PRS) needs more regulation.

But the question they have not addressed is what the purpose of this regulation will be.

If it’s to drive landlords out of the market, then it will succeed. If it’s to drive bad landlords out of the market, then it will not. That sounds wrongheaded but let me explain.

We have a very unusual market made up of millions of small landlords owning less than three properties who often do not have the capital resources to deal with onerous regulations.

Many of them want to comply with the current rules and most provide homes that range from very good to OK.

But if they are faced with new regulations that they cannot afford to meet then they will leave the market.

The bad landlords who do not comply with the existing rules are unlikely to comply with any new ones.

What is more, if as a result of good landlords leaving the market there is a massive surge in demand the bad ones will see this as an opportunity.

As more tenants are forced to occupy their properties at higher rents because they have nowhere else to go, so bad landlords will prosper.

But surely, you say, the new rules will drive them out of the market?

No – enforcement in practice does not work because it’s incredibly expensive to enforce rules against those who will not comply because, although they are a small percentage of the overall market, it still means policing 100,000s of properties.

What’s our PLAN?

History shows that if you want to create new conditions the carrot is far more effective than the stick.

If the objective of a policy is to create more landlords providing better homes, then we must encourage more landlords into the market who have the resources and scale to create good homes for tenants.

Such landlords will have the capital resources to invest in properties, comply with regulations and provide good homes.

To do that, you need to create a framework that incentivises such landlords to come into the market.

Instead of cutting supply, you will increase it. And if you increase the supply then you give tenants more choice and create the right market, one which will respond positively to regulations.

Surely that should be the objective of policy for all parties and stakeholders be they Conservative, Labour, Generation Rent, Shelter or whoever?

Unfortunately, it does not appear the be. My organisation, PLAN, is trying to win support to rethink the whole strategy for the PRS and appeal to those who agree with this to support us.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘More government regulation of the PRS won’t work – here’s why’ | LandlordZONE.

View Full Article: ‘More government regulation of the PRS won’t work – here’s why’

Land Registry holding up loan?

admin    Uncategorized     agents

I purchased a property six months ago and have a subsequent new loan agreed in principle.

However, I am still waiting for the Land Registry to complete the registration of the title and until the process is completed

View Full Article: Land Registry holding up loan?

Court agrees a vital new ‘green lease’ clause

admin    Uncategorized     agents

A recent court case shows the importance of keeping commercial lease clauses up-to-date with changes in new legislation, in particular there’s one clause that should be inserted into every commercial lease to take account of the new energy efficiency rules.

Under the Landlord and Tenant Act 1954 – the legislation governing commercial tenancies – there is provision for the courts to get involved where the landlord and tenant cannot agree on lease terms at renewal.

This is pertinent when one or other of the parties wish to vary the terms, usually as a result of changes in circumstances or new legislation enacted during the course of the lease term. In these cases the court has the ability to step in and determine the terms if the parties cannot agree.

An important case

In a recent property litigation case involving Clipper Logistics Plc v Scottish Equitable Plc (2022), the landlord (Scottish Equitable) called for three new covenants to be introduced into the lease.

Some of the landlord’s proposed changes were agreed upon between the landlord and tenant before this court trial, but there were other proposed changes which could not be agreed and were left to be determined by the County Court.

The desired changes by the landlord came about due to the impact of more recent environmental legislation, more specifically MEES and the property’s EPC rating. The landlord was obviously concerned that any detrimental changes to this rating, brought about by the actions or inaction of the tenant, could have consequences for itself.

Therefore the landlord wanted to have three new clauses inserted into the lease, these being:

1 – a Prohibition Clause to prevent alterations the tenant made to the property resulting in the property’s Energy Performance Certificate (EPC) grade falling below band E and thus rendering the property ‘sub-standard’

2 – an Indemnity Clause against the cost of a new EPC certificate in the event that such alterations were made to the property

3 – a Reinstatement Clause requiring the tenant to maintain the current EPC rating throughout their tenancy, and to do this by implementing remedial works if necessary.

The determination

It was determined that the onus was on the party requesting the changes (the landlord) to persuade the Court that the proposed changes were fair and reasonable.

The question was, would updating the lease with these clauses on renewal be reasonable to take account of legislative updates (e.g. changes to the energy performance of the building) – would it amount to reasonable modernisation of the lease?

The pandemic related events of the past two years have seen changes in commercial lease drafting evolve very quickly because of the many issues arising. As a result, the courts now are having to consider whether to approve lease terms that were not even on the radar before March 2020.

In Clipper Logistics the Court noted that most of the obligations relating to the energy performance regulations rest with the landlord rather than the tenant. The court considered that when the three clauses were all taken together, the proposed covenants would unfairly and unreasonably shift the burden of complying with these duties from the landlord onto the tenant.

The Court argued that the proposed Prohibition Clause was not necessary as the existing lease already contained terms preventing the tenant from making alterations to the property. Further it ruled that the Indemnity Clause was too burdensome for the tenant to adhere to.

However, the Court held that the requirement in the Reinstatement Clause for the tenant to return the property with the same EPC rating as when the tenant took over the lease was fair and reasonable and should be implemented in this case.

The Reinstatement Clause therefore is an important one having the effect of protecting landlords against any potential action or inaction by the tenant which might render the property as ‘sub-standard’ with regard to the EPC rating.

A clause requiring the tenant to “return the premises to the Landlord with the same EPC rating as it has as the date of this Lease” was therefore considered a fair and reasonable addition to protect the landlord from inaction by the tenant over a 10 year term.

Lease terms in Future

Given the proliferation of new environmental issues affecting property, it is likely there will be more ‘green lease’ terms to be introduced in both new leases and on lease renewals. Increasingly, ambitious reforms aimed at the UK’s net zero targets will likely necessitate this.

This court judgment indicates that courts do have some awareness and indeed some sympathy for the vulnerability of landlords, with the onus being on them to reach certain regulatory standards when the building is outside of their control, i.e., tenanted.

The existing Minimum Energy Efficiency Standards (MEES) regulations are exacting, but the court considered that adding more obligations on tenants to attempt to reduce the landlord’s liability under the legislation would not be fair or reasonable in the context of lease renewals.

In the Clipper Logistics case, the court took into account the existing lease clauses which offered a good degree of protection to the landlord. But the case also shows that a landlord cannot assume that it will be able to include clauses to protect its own position in relation to MEES without careful consideration.

An important consideration with any new lease contract: the parties can agree to the inclusion of any clauses they like, but if the courts won’t enforce them, they are effectively useless.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Court agrees a vital new ‘green lease’ clause | LandlordZONE.

View Full Article: Court agrees a vital new ‘green lease’ clause

New law sets ground rent to zero for prospective homeowners

admin    Uncategorized     agents

Landlords will be banned from charging ground rent to future leaseholders in England and Wales from 30^th June.

Under the Leasehold Reform (Ground Rent) Act, anyone buying a home on a new long lease will be freed from these annual costs which can sometimes add up to hundreds of pounds, yet provide no clear service in return and can be set to escalate regularly, according to the government.

Upcoming changes

It says many landlords have already reduced ground rent to zero for homebuyers starting a new lease with them but that anyone preparing to sign a new lease in the next two months should speak to their landlord to ensure their ground rent rate reflects the upcoming changes.

Leasehold Minister Lord Stephen Greenhalgh adds: “I welcome the move from many landlords who have already set ground rent on their new leases to zero and I urge others to follow suit ahead of this becoming law.”

Online calculator

Measures already announced in 2021 include a new right for leaseholders to extend their leases to 990 years at zero ground rent and an online calculator to help them find out how much it would cost to buy their freehold or extend their lease. In a government crackdown, the Competition Market Authority also secured commitments with major homebuilders to stop them doubling ground charges every year for leaseholders.

Timothy Douglas, policy and campaigns manager for Propertymark, says the unfair and restrictive charges levied on leasehold homeowners have, in some cases, been allowed to become a cash-cow and that abolishing them has been a long time coming. He adds: “These changes only legally restrict ground rents on new leases, so we hope they are a catalyst for further reform by the housebuilding sector itself and the UK government that will release the estimated over one million existing homeowners who remain locked into these agreements.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – New law sets ground rent to zero for prospective homeowners | LandlordZONE.

View Full Article: New law sets ground rent to zero for prospective homeowners

Airbnb backs steps to end ‘no fault’ evictions and speed up register study

admin    Uncategorized     agents

Airbnb has called for an end to Section 21 evictions to stop landlords forcing tenants out of properties and then turning them into short-term holiday lets.

The platform says it backs moves to strengthen protection for renters and is committed to investigating cases where a tenant has been unfairly evicted from their property which is subsequently listed on Airbnb.

Landlords removed

Amanda Cupples, Airbnb’s general manager for Northern Europe, says ending ‘no fault’ evictions would ensure long-term housing is protected for communities and help the website better police the sector. It already removes landlords from its platform if tenants have been unlawfully evicted.

Cupples says the firm was also ready to administer tourist taxes as a way to help local residents better benefit from living in a tourism hotspot and had already collected £3 billion in ‘tourism taxes’ around the world. “Where there is clear support for such a measure to be introduced in the community, Airbnb can share its experience in working with authorities to streamline the process here in the UK too.”

Available properties

The short-term lettings sector has been criticised for contributing to a sharp drop in the number of rental properties available for local people as landlords switch from longer tenancies; Devon has seen a staggering 70% drop in private rented properties over the last two years. Earlier this year, the government announced that from April 2023, second homeowners would have to pay council tax and stop accessing small business rates relief if they can’t prove that their properties are genuine holiday lets.

Airbnb has also called for the government to speed up its timetable for delivering on its commitment to consult on a national register for the sector. She adds: “Since last year, we have led calls on short-term lets rules being introduced and now, alongside communities in some parts of the UK, we are keen to see the government turn talk into action.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Airbnb backs steps to end ‘no fault’ evictions and speed up register study | LandlordZONE.

View Full Article: Airbnb backs steps to end ‘no fault’ evictions and speed up register study

How to get the new tax year off to a good start!

admin    Uncategorized     agents

It feels like it’s only been a minute since we were submitting our 20/21 tax returns, but already the new tax year is here! Which not only means there are a couple of new rules and regulations to look out for,  but it’s also time to prepare the 21/22 tax return!

So here’s our breakdown of how to get the new year off to a good start! 

1. File as early as possible

The first thing, and it’s a pretty big one – Just because you don’t have to submit your 2021/22  tax return until the end of January, doesn’t mean that you should forget about it until then! 

Not to call anybody out – we’re all guilty of not necessarily being overly proactive when it comes to our tax returns, and we’re under no illusions that it’s not your favourite task in the world, but the quicker you get on top of your tax return, then the quicker you will be aware of your liability and any plans you may need to put in place around that. Also HMRC’s phone lines get even busier around tax return filing season, so if you have any questions for the revenue, then its best to contact them sooner rather than later!

Filing early is an ever growing trend, with HMRC seeing more than 63,000 people filing their tax 20/21 return on the 6th April 2021, and 934,501 by the 17th May 2021. 

Tax isn’t always bad news either – for those of you lucky enough to receive a tax refund for the year, the earlier you file, then the earlier you will get your refund! 

2. Get a good filing system in place ready for MTD 

We couldn’t really talk about the new tax year without mentioning MTD, could we?! 

Although this isn’t strictly an MTD specific point – a good filing system and method will ensure that when you are putting together your tax return, the process should be relatively pain free. 

And with Making Tax Digital for Income Tax edging ever closer, it really is a good time to consider using a software to keep your records – by starting at the beginning of the tax year, you will have a full years records under your belt by the time it comes to your next tax return – and once MTD becomes a legal requirement, you will already be a digital record keeping pro! 

If you’re still looking for the right MTD software for you, why dont you check out our MTD ITSA ready package here 

3. Update yourself on new tax rates and rules 

Tax rates and brackets change on a near annual basis, so keeping yourself up to date for the current tax year,  as well as the year you’re filing for can help reduce any surprises when calculating your tax liability. 

The recent spring statement included an increase in the threshold before you are charged national insurance, BUT there will also be an additional 1.25% “Social Care Tax” to keep an eye out for.

Really what we’re trying to get across is that being organised is key – that and having a good software partner to support you through everything! At APARI we aim to support all of our landlord users as much as possible through the transition from Self Assessment to Making Tax Digital for Income Tax. Want to keep up to date with all things Landlords & Tax? Check out our Community here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – How to get the new tax year off to a good start! | LandlordZONE.

View Full Article: How to get the new tax year off to a good start!

Salvation Army labelled rogue landlord after years of neglect

admin    Uncategorized     agents

The Salvation Army has been slammed for allowing some of its private residential tenants to live in substandard accommodation.

Properties in Hadleigh, Essex, were found to be riddled with damp and mould while some had vermin infestations or breached fire-safety regulations, leaving renters exposed to serious hazards for at least seven years.

Unreserved apology

An investigation by the Guardian and ITV News found that the Christian organisation ignored repeated requests to improve conditions from its tenants. It has now issued an unreserved apology and says it has begun surveying the properties and renovating vacant homes as part of an urgent action plan.

Problems were first documented in late 2014, then in 2018 the charity left up to 40 tenants with the impression they were about to be evicted, instead of paying to correct the problems. In 2019, a local environmental health officer at Castle Point council wrote to the Salvation Army and described the charity’s handling of the situation in Hadleigh as a “sordid mess” and served improvement notices on a number of its properties.

Long-standing tenant

Peggy Jane Smith, a Salvation Army tenant in Hadleigh for 38 years, whose property was found to be a fire risk, labelled its behaviour that of a rogue landlord. She said: “It’s very hard to try and tell people that because it’s not what people want to believe, but the unfortunate thing about the Salvation Army is, on the one side they have their spiritual side, but on the other side they’re behaving like hard-nose, unscrupulous, capitalists.”

Anthony Cotterill, the charity’s territorial commander, admitted that the condition of the houses was unacceptable. He added: “It is clear that we let down the tenants of Seaview Terrace and Mount Zion and I am deeply sorry. As well as an unreserved apology, I would like to offer reassurance that for some months now we have been working on an urgent action plan to bring these properties up to the correct standard.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Salvation Army labelled rogue landlord after years of neglect | LandlordZONE.

View Full Article: Salvation Army labelled rogue landlord after years of neglect