Are you one of them? Two thirds of landlords fed up with higher taxes and red tape

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Tougher tax rules and red tape have caused two-thirds of landlords to consider investing outside the private rented sector in future.

New research from FJP Investment reveals that the market has lost its appeal for many, with 68% of multiple property owners reporting that buy-to-let investments have become far less attractive during the past five years.

The survey of 1,004 UK landlords and property investors, of which 344 own two or more properties, found that 71% believe they have been unfairly targeted by the government’s tax reforms and new regulations since 2016.

Two thirds (67%) said they would consider other forms of property investment that didn’t incur the same taxation and complexity as buy-to-let and second home purchases.

Two fifths

More than two fifths (44%) of landlords said they plan to sell one or more of their properties in 2021 although the same number intend to buy a house or flat this year.

However, confidence is high in regard to house prices; more than half (55%) believe prices will rise in the next 12 months, while 54% expect prices to increase by more than 10% between now and 2026.

CEO Jamie Johnson (pictured) says that although property investors are confident house prices will rise, the added cost and complexity of investing and letting out multiple properties means many are looking for other forms of bricks and mortar investment.

He adds: “With the stamp duty holiday extended until the end of June and the UK inching towards an end to lockdown, the next few months will be critical for the property market. Time will tell if there is indeed a mass exodus of investors from the buy-to-let sector, but this new research underlines the fact that there is far less appetite to be a landlord.”

Read more about selling buy-to-let properties.

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LATEST: Government’s annual housing benefit bill rises to £30 billion

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The government is expecting to spend and eye-watering £30 billion on housing benefit for tenants this year, DWP minister Will Quince has told parliament.

This figure is £8-10 billion more than the Office for Budget Responsibility forecast would be needed for 2020/21 before the pandemic struck and reflects the huge financial strain the welfare state is under during Covid.

Quince’s answer came in response to questions from several MPs in parliament who are concerned that rent arrears are building to unsustainable levels.

Conservative MP Bob Blackman (pictured) said that: “The evidence produced by the National Residential Landlords Association and a lot of housing charities demonstrates that rent arrears are growing and growing very fast such that they will probably never be repaid.”

Quince, who is the Parliamentary Under-Secretary of State for the DWP, said Ministers were worried by the problem of mounting rent arrears too but said the government’s huge housing bill and other measures demonstrated it was doing all it could to support struggling tenants on benefits.

He also said the £30 billion excluded the £1 billion spent on raising the Local Housing Allowance threshold to the 30^th percentile, and that landlords and tenants are now able to request that rent is paid direct to a landlord online if ‘financial harm’ is likely.

But as LandlordZONE has reported many times in the past, the Alternative Payment Arrangements or APAs Quince refers to are not as easy to arrange as he claims.

Landlords requesting APAs can face a glacially slow and often unstaffed bureaucracy which is too easily outwitted by tenants intent on pocketing housing benefits payment rather than passing them on to landlords.

Read more about rent arrears.

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LATEST: Government spending £84m a day on housing benefit for tenants

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The government is expecting to spend and eye-watering £30 billion on housing benefit for tenants this year, DWP minister Will Quince has told parliament.

This figure is £10 billion more than the Office for Budget Responsibility forecast would be needed for 2020/21 before the pandemic struck and reflects the huge financial strain the welfare state is under during Covid.

Quince’s answer came in response to questions from several MPs in parliament who are concerned that rent arrears are building to unsustainable levels.

Conservative MP Bob Blackman (pictured) said that: “The evidence produced by the National Residential Landlords Association and a lot of housing charities demonstrates that rent arrears are growing and growing very fast such that they will probably never be repaid.”

Quince, who is the Parliamentary Under-Secretary of State for the DWP, said Ministers were worried by the problem of mounting rent arrears too but said the government’s huge housing bill and other measures demonstrated it was doing all it could to support struggling tenants on benefits.

He also said the £30 billion excluded the £1 billion spent on raising the Local Housing Allowance threshold to the 30^th percentile, and that landlords and tenants are now able to request that rent is paid direct to a landlord online if ‘financial harm’ is likely.

But as LandlordZONE has reported many times in the past, the Alternative Payment Arrangements or APAs Quince refers to are not as easy to arrange as he claims.

Landlords requesting APAs can face a glacially slow and often unstaffed bureaucracy which is too easily outwitted by tenants intent on pocketing housing benefits payment rather than passing them on to landlords.

Read more about rent arrears.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Government spending £84m a day on housing benefit for tenants | LandlordZONE.

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All social housing residents should be treated with respect and dignity

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Social housing residents will be helped with improving their living conditions through a new government campaign, ‘Make Things Right’, will help residents raise complaints if they are unhappy with their landlord and struggling to get problems resolved, with clear advice on how to progress issues to the Housing Ombudsman if necessary.

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EXCLUSIVE: ‘No hope of deadline extension’ for electrical checks ahead of April 1st cut-off

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Landlords and letting agents are likely to have to meet the new Electrical Safety Standards by 1^st April, despite attempts to push back the deadline.

Rented properties must comply with the regulations by the beginning of next month, requiring landlords to have electrical installations inspected and tested by a qualified and competent person, at least every five years.

In December, Propertymark warned the government that the huge task of ensuring all rented homes would comply in time was unlikely and that an “anticipated and widespread failure in compliance” would follow.

Lockdown blamed

It largely blamed the lockdown – slowing work and causing tenants to be reluctant to admit tradespeople, along with a shortage of qualified electricians. However, the trade body says it has had no indication from the government that the deadline will be extended.

The National Residential Landlords Association says its members have also raised concerns about an inconsistent approach to the regulations being adopted by inspectors.

A spokesman tells LandlordZONE: “We have raised this with the government and are expecting the relevant professional and trade bodies to issue guidance to ensure a more consistent approach.”

It says it’s aware of cases where tenants have refused access to properties for landlords to comply with the regulations. “In such cases, landlords should ensure they record where they have attempted to gain access to the property but been refused it by the tenant.”

Timothy Douglas (pictured), Propertymark’s policy and campaigns manager, agrees that it’s important to document all activity relating to arranging, planning and scheduling work relating to compliance with electrical checks.

He adds: “Creating a paper trail of communication between tenants, landlords and electricians will safeguard agents against any enforcement activity where work could not be carried out during the pandemic.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: ‘No hope of deadline extension’ for electrical checks ahead of April 1st cut-off | LandlordZONE.

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Property values: What does 2021 have in store for landlords?

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Despite a recent slowdown, house prices are predicted to carry on rising throughout 2021, landlords will be relieved to hear.

The latest figures from the Halifax and other expert’s forecasts indicate that house prices are set to remain steady in 2021.

Last week’s budget, with its extension to the stamp duty holiday and other measures to support  mortgage borrowers, means the property market looks set for another mini-boost, at least in the short-term.

The Halifax figures showed a stalling of prices in the first two months of the year, but that was before Rishi Sunak’s budget last week when he delighted those buyers with purchases pending, taking the pressure off from completing before the 31^st of March.

A buyer of a £500,000 property will save £15,000 if the sales goes through before the stamp duty concession ends.

Pause

There was a definite pause in the upward trend in prices in the second half of last year, when prices rose by an average of 5.2% in the year to the end of February.

The Office of Budget Responsibility (OBR) had predicted a fall (mini-crash), a fall off of the stamp duty holiday “cliff-edge”, of 8.3% but this was before the Chancellor announced his extension and his further measures to  taper the end of the holiday.

Russell Galley, Managing Director, Halifax (pictured), says: “Having enjoyed an extremely strong period of activity in the second half of last year, the housing market continued its softer start to 2021, with average prices down very slightly (-0.1%) compared to January.

“However, with annual house price inflation currently at +5.2%, property values remain comfortably higher than 12 months ago, when February was the last full month before lockdown.

“The housing market has been at something of a crossroads at the start of this year, with upcoming events key to determining the path of activity and prices over the next few months. The government’s decision to extend the stamp duty holiday – one of the main drivers of demand from home movers during the pandemic – has removed a great deal of uncertainty for buyers with transactions yet to complete.”

Stabilised market

Forecasts put out by Capital Economics, The OBR and Knight Frank also support the view that the budget measures have stabilised the market in the sort-term with a forecast of an 8.1% rise above a year ago, coming up to the stamp duty holiday deadline, but then easing down again gradually towards the year-end.

With buy-to-let rental property still in high demand – properties selling as soon as they come onto the market in many locations – and a move out of city centres towards urban and rural living, some properties are selling at above average prices.

It seems that property is still a relatively safe and sensible place to have your money, especially when compared to other forms of investment.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Property values: What does 2021 have in store for landlords? | LandlordZONE.

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ARE YOU READY for the biggest opportunity for property investors in 2021?

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Changes are afoot in the world of commercial property, to make it far easier to repurpose commercial buildings for other commercial and residential uses.

These changes will offer tremendous opportunities for property investors who know how to exploit them and use them to their advantage!

The post ARE YOU READY for the biggest opportunity for property investors in 2021? appeared first on Property118.

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Oxford council to vastly enlarge landlord licensing powers at meeting on Wednesday

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The city of dreaming spires is set to introduce a blanket selective licensing scheme following a consultation last year that revealed strong backing for the scheme among tenants and residents. It also plans to renew its existing HMO licensing scheme.

But because of the size of its proposed selective licensing scheme, the council will then have to seek approval from the Secretary of State before going live, most likely in early 2022.

During the council consultation, two thirds of Oxford residents who were canvassed said they’d back greater regulation of the private rental market there via a selective licensing scheme, while 72% supported the additional licensing scheme for HMOs to be renewed.

Oxford has an unusual housing market, largely due to the very high concentration of students living in the city, where nearly half of all homes are rented.

Housing hazard

A survey of rented homes last year found that a fifth of its 30,00-odd privately rented homes featured a serious housing hazard, and that one in every ten tenancies had been reported to the council over low standards of housing or property management.

In 2011 Oxford was the first English council to bring in a citywide additional licensing scheme requiring all HMOs to be licensed. The adoption of selective licensing would mark the biggest change to Oxford’s private rented sector since additional HMO licensing.

Oxford council says that, despite Covid, it has worked hard to canvass a wide variety of people involved in the PRS on the proposals. This has included landlords, agents, industry associations, residents and resident’s groups, private tenants, third sector organisations, advice agencies, registered housing providers, councillors, businesses and neighbouring councils.

“We recognise there are strong differences of opinion between landlords and agents on the one hand, and tenants, residents and organisational representatives on the other,” says Councillor Alex Hollingsworth (pictured), cabinet member for planning and housing delivery.

“However there is broad consensus that there are issues in the private rented sector which do need addressing and we believe that licensing is the best way of doing this.”

Read more about Oxford.

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High-profile rogue landlord turned glamour model is banned for five years

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A high profile rogue landlord has become the first in Cornwall to be slapped with a banning order after years of breaching lettings rules.

Julie Stoddern, of North Roskear, Camborne, can’t let a property for five years and has been placed on the national Rogue Landlords Database.

She was convicted in November 2020 relating to the breach of a prohibition order, allowing a property to be overcrowded and failure to hold an HMO licence. She was fined £5,000, with costs of £5,515 and a victim surcharge of £190.

Cornwall Council’s private sector housing team picked up on the offences during the first national lockdown over concerns that the house risked increasing community Covid transmission.

It was Stoddern’s third conviction for housing offences over an eight-year period. Due to the seriousness and repeat nature of the offending, the council applied for a banning order which has now been issued by the First-Tier Tribunal.

Modelling

Stoddern has featured in several newspapers including The Sun after turning to glamour modelling to try and pay off these fines, but says she is focussed on providing homeless and vulnerable people with accommodation. At one point she also launched her own calendar, pictured, above.

But Stuart Kenney (pictured), from the council’s housing team, says: “Prosecution, including fines issued by Truro Magistrates’ Court, have seemingly not deterred repeat offending and the council has exhausted all options available to encourage compliance.

“There have been multiple reports of anti-social behaviour and police attendance to the address over several years, with a demonstrably high community impact linked to the offending. It is hoped that the risk of imprisonment will stop further offending.”

The national Rogue Landlords Database, which currently only has about 50 people (up from 18 a year ago) on it, remains secret as a government consultation that closed in October 2019 into widening tenants’ access appears to have stalled.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – High-profile rogue landlord turned glamour model is banned for five years | LandlordZONE.

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LATEST: RICs’ new cladding guidance is flawed claim campaigners

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New External Wall System (EWS) guidance to help leaseholders sell flats in blocks with external cladding has been criticised by campaigners for ignoring the thousands who will remain trapped in unsafe buildings.

The Royal Institution of Chartered Surveyors’ (RICS) guidance issued today clarifies the checks required by banks and building societies before issuing a mortgage.

There will now be no need for EWS checks on all buildings of four storeys or below, as long as they are not clad in aluminium composite material (ACM), other metal composite materials (MCM) or high-pressure laminate (HPL).

Buildings that are five or six storeys high won’t need to be checked if they do not have ACM, MCM or HPL present, and if the cladding covers less than 25% of the building.

However, the End Our Cladding Scandal (EOCS) campaign says that the need for an EWS1 form is only one part of the national building safety crisis. It believes the wide range of serious, internal and external, safety defects being uncovered in residential buildings of all heights aren’t being considered.

This revised guidance will do nothing to help many leaseholders, says campaigner Tasha Letchford, who adds: “The EWS1 certificate will only identify issues with the external wall and it is now clear that many of the fire safety issues within these buildings are internal. We will continue to call on the government to end this crisis.”

It adds that the RICS’s decision that buildings of any height with HPL cladding will still require an EWS1 form puts into focus the, “unfair and arbitrary decision of the government to force cladding tax loans onto innocent victims in HPL-clad buildings under 18m”.

Housing Secretary Robert Jenrick (pictured) says the new guidance means nearly 500,000 leaseholders will no longer need an EWS1 form. “Backed by nearly £700,000 government funding, over 500 assessors have now started training so that where valuations are needed these can be done more quickly, speeding up the process for homeowners,” says Jenrick. 

The guidance is due to be implemented by 5th April 2021.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: RICs’ new cladding guidance is flawed claim campaigners | LandlordZONE.

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