New Year student halls rent strike gathers pace, but will it spill into PRS?

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Thousands of students have threatened a rent strike in the new year in protest at being charged for their empty rooms in halls of residence and a lack of face-to-face teaching.

Strikes on campuses including Oxford, Sussex and Edinburgh are being planned when they return from the Christmas break in what’s been labelled the biggest wave of student renter militancy in more than 40 years.

Nearly 200 students have pledged to withhold their rent in Sussex, while in Cambridge more than 400 students have promised to join a rent strike.

At Bristol University, more than 1,400 students have been demanding rent cuts, more support and no-penalty contract releases.

Strike success

So far, the protests are having an impact; Manchester has now cut rent in its halls by 30% for this term after a mass strike, and Bristol University has announced a similar rebate for seven weeks to account for the staggered return to campus next year.

Rent Strike, a student-led umbrella campaign group, is overseeing the action planned for the new term, backed by the National Union of Students (NUS).

It’s been holding training sessions to encourage protests after research found the average rent for student accommodation formed 73% of student loans in 2018, up from 58% in 2012.

NUS president Larissa Kennedy (pictured) says students have been encouraged to move into halls because universities are heavily dependent on rents and tuition fees, but after finding that almost all teaching has been online so far this year, students feel like they been trapped on campuses so universities can collect rent and fees.

She told The Guardian: “Universities have turned into mega landlords, collecting millions of pounds in rent every year. A massive chunk of the inadequate maintenance support, most students get is funnelled straight into these institutional landlords.”

But will this rent strike spill into the PRS, as it threatened to in April?

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Stamp Duty holiday cliff edge – “I understand concerns”

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Over the past few months, The Guild of Property Professionals along with other industry bodies have been lobbying the Government to extend the Stamp Duty Holiday on behalf of both consumers and the property sector. Along with a letter sent to Government with the backing of several industries bodies and major players in the industry

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EXCLUSIVE: ‘We must take the lead on possessions for the sector to survive’

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While Covid-19 has dominated all our lives since the start of the year the Government is expected to push ahead with its plans for reform the PRS as we enter 2021.  

Plans to abolish Section 21 repossessions – so-called ‘no fault’ evictions’– were announced in December last year as part of the Government’s Renters’ Reform Bill.  

The response to the proposals for the bill can, at best, be described as mixed, with landlords rightly worried about the impact that repealing Section 21 will have on their ability to repossess their rental homes should they need to.  

However, the Government is adamant that this is the direction of travel, and it is now up to us to put forward compelling, evidence-based plans detailing how these changes can work in a way that can benefit landlords and tenants.  #

Legitimate reasons

Essentially this means keeping good tenants in their homes, while retaining the ability to repossess where there is legitimate reason for example anti-social behaviour or non-payment of rent.  

It is with this in mind that we at the NRLA have drawn up our own proposals outlining how the scheme should work, following extensive consultation with our landlord members,  partner organisations and senior members of the judiciary.  

In our submission to Government, we have included a clear and comprehensive list of grounds upon which landlords may legitimately regain possession of their properties. 

These include circumstances in which the landlord or a family member want to move into the property, or they want to sell it or carry out major renovation works.  

They would also be able to repossess where the tenant had built arrears, or was committing antisocial or criminal behaviour, where the terms of the tenancy agreement had been breached or where the tenant has caused damage.  

A full list of all the proposed grounds and their conditions can be found here.

Conciliation service

We also want to see the creation of a new, publicly funded conciliation service, similar to the employment dispute body, ACAS to offer support when problems arise.  

This would seek to resolve disagreements between landlords and tenants without the stress and costs associated with going to court – with legally binding consequences should either party breach any agreement reached.  

Where landlords failed to abide by the terms of the agreement, they would be banned from being able to re-possess the property on the same grounds for six months. Where renters did so, the case would be fast tracked through the courts.  

Throughout the process both parties would be able to access the advice and support they needed to make their case, ensuring it is fair.  

Backlog cleared

There is currently a huge backlog of possession cases and the conciliation service is one way to reduce the pressure by keeping cases out of court where possible.  

While the abolition of Section 21 was the aspect of the Renters’ Reform Bill stealing the headlines, it will also include commitments to strengthen landlords’ rights to repossess, with valid reason, improve access to the database of rogue landlords and agents and improve standards.  

Lifetime deposits

The Government is also looking to introduce lifetime deposits – an idea first mooted by the NRLA – which would allow tenants to ‘move’ their deposit between tenancies, rather than trying to raise a ‘second deposit’ when moving.   

While we are supportive of the idea in principle, we have stressed in our submission it is vital the new system in no way discourages landlords from making valid claims for damage to properties, or leaves them out of pocket when deposits transfer.   

Landlords cannot be expected to give up their right of recourse to a security deposit until such time that they are satisfied there will be no need to make a claim against it.   

Get involved

Now our proposals have been sent to government, the next step is for you to get involved.  

If you support the work we are doing we’d ask you to give your feedback and spread the word via social media.  

We also look to share landlords’ stories to showcase real life examples of the challenges landlords face, so if you have a story to tell, please get in touch.  

It is important Ministers know there is support for this approach on the ground. It is in all our interests to keep tenants in their homes where possible and we need to show we are willing to engage to ensure the reforms are ones that will work for landlords and tenants alike.  

To read the proposals in full click here. 

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Government issues new Covid-19 guidance for landlords and tenants

admin    Uncategorized     agents

The Ministry of Housing, Communities and Local Government’s (MHCLG) has published (27 November 2020) an updated version of its guidance document for agents, landlords and tenants setting out advice and information aimed at the private and social rented sector (PRS).

This guide applies to England only but there are some measures in the guide which also apply in Wales.

This is non-statutory guidance for agents, landlords and tenants in the private and social rented sectors which includes among other issues:

• Measures relating to notices seeking possession as amended by the Coronavirus Act 2020
• Health and safety obligations, repairs and inspections in the context of coronavirus (COVID-19)

The guidance is advisory and informs about recent changes to the law. All of this guidance is subject to frequent updates and should be checked regularly for currency.

National restrictions were in force in England until the beginning of the day on 2 December.

Following the national restrictions, the tiers of local restrictions have returned. See guidance on the local restriction tiers.

See also the guidance issued for Wales, Scotland and Northern Ireland

The guide covers landlord and issues which may arise during the Covid-19 outbreak including:

• What to do about rent arrears
• Advice around carrying out emergency repairs, access
• Information on re-letting, property viewings and moves
• Mortgage payments
• Tenancy Deposits
• Client Money Protection
• HMOs
• Anti-social behaviour
• Dispute resolution and mediation
• Serving notices
• Possession claims and evictions, etc.

The government is urging all agents, landlords and tenants to abide by this latest government guidance on COVID-19.

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Why landlords are an easy target for the taxman

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Anyone with disposable income has a choice whether to spend that money on holidays and luxury goods or to save it. Arguably, there is a middle way: investing in property. The path of a landlord, if done right, can deliver a sustainable income well into your future, making it an attractive retirement plan.

However, far from being an easy way to guarantee income, investing in property is proving costly for many landlords. It seems, perhaps, that landlords have become an easy target in the eyes of the taxman as they have a physical tangible asset. 

Tax changes affecting landlords

Over the past few years, landlords have been hit with a series of tax changes that could seriously diminish their income. Here are the biggest recent changes that affect landlords:

• Purchasing property as an individual vs company – It now makes more sense to buy property via a limited company rather than as an individual due to the tax breaks afforded to companies.
• No more wear and tear allowance ‒ Previously landlords could include reasonable wear-and-tear expenses in their tax allowances for fully furnished rental properties.  This could be anything up to 10% of your net annual rental income. Now landlords can only claim for costs arising from replacing items that HMRC deem to be domestic items that have been subject to wear and tear in their properties. It only applies when the item is unusable and genuinely needs replacing – not just repurposed for some other use. 
• Additional 3% stamp duty on second homes ‒ Building a portfolio of properties just became more expensive as the government clamps down on second homes, introducing an additional 3% stamp duty on top of an already hefty fee.
• Reduction of the full mortgage interest relief ‒ From April 2020, landlords can no longer reduce their tax bill by deducting mortgage expenses from rental income. This has been replaced by a flat tax credit of 20% of mortgage interest payments.
• Potential rise of capital gains tax ‒ While it is unclear what will happen when, it’s expected that Capital Gains Tax will rise in the coming years to bring it into alignment with income tax rates.

And, as if this wasn’t enough, HMRC are introducing a new way of tracking, calculating and submitting tax returns for landlords, known as Making Tax Digital (MTD), potentially causing further pain for Landlords. 

As part of the MTD regulations, taxpayers will need to submit their annual tax return along with four quarterly submissions using recognised MTD software. If you outsource everything to an accountant, it’s inevitable that your costs will go up as you will need to submit five returns a year. 

Get started with a free MTD account from APARI.

How can landlords rise above all these changes and still come out on top?

Despite the situation looking pretty gloomy for landlords, not to mention the challenges brought about by the coronavirus, there is light at the end of the tunnel.

By preparing now for future tax changes, while rapidly adapting to the recent changes, landlords can develop a long-term financial plan that will help balance the books.

Here’s a few ideas of what can landlords do to help themselves:

• Keep good/efficient digital records ‒ With the new MTD regulations, tax records need to be kept constantly up-to-date. While this can be difficult to achieve, it is even more difficult to pull all your records together five times a year for your accountant to process. However, tax software designed to meet the needs of MTD, such as the free version of APARI, is now available, so you can register and get used to the process well in advance. What’s more, APARI has been engaging with HMRC to provide landlords with software which is easy to use and reduces the cost of using an accountant.

• Prepare for longer-term tax planning – Where an accountant may be able to add value is in your long-term tax planning. With all the changes to the tax system that have recently happened or are planned for the near future, ensuring that you don’t overpay is going to become difficult. Your accountant should be able to help you formulate a long-term tax plan to ensure that you never overpay.
• Plan for capital gains, inheritance and income taxes ‒ Part of your long-term tax planning needs to consider potential changes to the tax rate for things like capital gains, income and inheritance. While the situation is still evolving in response to the coronavirus lockdown, you can get regular updates as part of the APARI community or through your accountant.
• Expect the government to introduce the payment of quarterly bills ‒ The APARI tax experts expect, from their conversations with HMRC, that the result of the new MTD regulations will be that landlords are expected to pay their tax bills quarterly. By getting ahead of the new MTD regulations, you can avoid being stung for two tax bills in one year, ensuring you have enough saved for your quarterly bills, if introduced.

To help minimise future pain, landlords should start their long-term financial planning now. Part of this plan will need to involve keeping good, digital records using MTD-eligible tax software to minimise accountant fees. By starting with MTD software now, you’ll be well-practiced and prepared for the tax changes. You can then engage your accountant in more value-added advice and long-term planning to avoid becoming an easy target for the taxman.

Get started with a free MTD account from APARI.

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Government Announces that XMAS Comes Early For Property Investors & Developers

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Property investors and developers have been waiting for the Government to announce the NEW Permitted Development Rights for repurposing commercial buildings for residential use. IT’S HERE!

The Government have issued a consultation document and are looking to bring in these new permitted development rights early next year.

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Leasehold reform campaigner resigns after ‘unfair’ bullying accusation

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Colleagues of Martin Boyd (picture above, inset), who’s resigned as chair of the Leasehold Knowledge Partnership (LKP) after clashing with the Leasehold Advisory Service, have urged MPs to support him.

They say Boyd, who has been with the campaigning group for 12 years, felt compelled to step down after failing to get the backing of the Ministry of Housing, Communities and Local Government when the chair of the Leasehold Advisory Service, Wanda Goldwag, reportedly attacked him for tweeting criticisms of the Government quango.

The incident happened in 2019 at a meeting hosted by MP Sir Peter Bottomley (pictured above, left) and resulted in Boyd being accused of bullying LEASE staff – a claim he denies – and banned from its offices.

Along with campaigners including LKP patron Bottomley, Boyd has been instrumental in pushing for leasehold reform.

Social media

There’s now been an outpouring of support for the campaigner on social media, with Justin Madders MP, Labour MP for Ellesmere Port and Neston, tweeting: “You and LKP have done an amazing job in exposing the unfairness of leasehold and it’s now high on the political agenda at last, but we still have a long way to go and we need you with us in that fight.”

LKP colleague Sebastian O’Kelly (pictured above, right), who is a former Daily Mail journalist, is calling on more MPs to take up the issue.

He says: “Why should leaseholders be deprived of the services – freely given over many years – of Martin Boyd because of a series of ill-disciplined and wrong accusations by someone on the public payroll?

“If he is wrongly accused of bulling LEASE staff, they need to support him. Cladding leaseholders in particular owe Martin Boyd a debt of gratitude: it was solely thanks to him that their issues were first raised in Westminster.”

Visit the Leasehold Knowledge Partnership.

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WARNING! Benefits expert reveals £19,000 risk of not archiving emails

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The UK’s leading housing benefits consultant has warned landlords to keep copies of any correspondence with the DWP and local authorities for as long as possible to avoid potential court action and fines later on.

Bill Irvine (pictured) has made the comments after a recent case. He helped a landlord client in London avoid council tax and Housing Benefit repayments of £25,000, only for the local authority to issue debt collection notices totalling £19,000 months later.

The landlord in question, who wishes to remain anonymous, had rented out a property above a shop to his local council, who then sub-let the property to two sisters.

The council paid the housing benefit for both women direct to the landlord, while the duo also received a substantial council tax rebate due to their perilous financial position.

But it was discovered that the women had illegally sub-let an attic room to a third tenant, until that point without the landlord or council realising.

Incredibly, on discovery of the illegal sub-let in 2012, the council then asked the landlord to repay the full council tax and housing benefit payments totalling £25,000.

£19,000 demand

After a lengthy series of interactions with the council, Irvine had the payment request quashed. But recently the council then returned with a demand for £19,000.

“My client was understandably worried when he received this demand. I was less so, because I knew, the council didn’t have a leg to stand on, having effectively conceded both appeals; notified the Tribunal Service and Valuation Appeal Tribunal to this effect; and quashed the overpayments,” Irvine tells LandlordZONE.

“Fortunately, both my client and I were able to produce this evidence. Consequently, a simple email to the Debt Recovery Team, including the 2013 thread of exchanges, resulted in a quick and contrite response.”

But Irvine warns other landlords that, without the email trail he and his client had to hand, it would not have been as easy to fend the council off.

“So, if you ever encounter problems like those alluded to above, make sure you keep copies, just in case something similar occurs,” says Irvine.

Need Bill’s help?  bill@ucadvice.co.uk or 07733 080 389.

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How’s that fair? Holiday lets enjoy VAT break for another three months while landlords get nothing

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Holiday lets owners including Airbnb operators have been handed another tax break while traditional landlords continue to be overlooked by the Government.

Ministers have extended a reduction in VAT on holiday homes until 31^st March 2021 in response to the impact of the pandemic, but has yet to offer any financial support for landlords.

The temporary change – from the standard 20% to the reduced rate of 5% – was first introduced on 15th July in the Chancellor’s economic update and was due to last until 12th January 2021, at a cost of £4 billion.

Now it’s announced that the benefit will last until the spring.

The cut was made in response to the pandemic to support businesses severely affected by forced closures and social distancing measures.

VAT savings

The Government says: “It is important to note that it is not mandatory to pass on the effective ‘VAT saving’ to customers.

“This is entirely a commercial decision for business operators, and whether or not prices and rates are to be adjusted is for each business to decide, taking into account their own trading terms and conditions.”

The UK has one of the highest VAT rates on the tourism and entertainments sectors; most other European countries have previously taken advantage of EU rules which allow reduced VAT rates.

Read more stories about VAT and landlords.

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BREAKING: Scotland reveals six-week festive evictions ban

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The enforcement of possession orders in Scotland is to banned over Christmas, its government has announced this morning.
Bailiffs are to be prevented from enforcing evictions from 11^th December until 22^nd January.

The new regulations, which will be introduced in the Scottish parliament imminently, are designed to offer tenants protection from eviction during the festive break, reduce the burden on local authorities to find accommodation for those who are evicted and stop the spread of Covid.

The only exception to the new eviction ban will be tenants involves in serious anti-social and criminal behaviour, and domestic violence.

Scotland’s Housing Minister Kevin Stewart (pictured, below) says: “We took early action to, in effect, halt eviction action until March 2021 due to the pandemic.

“We have supported tenants throughout this difficult period through a number of actions including increasing our Discretionary Housing Fund from £11 million to £19 million to provide additional housing support and shortly we will introduce our Tenant Hardship Loan Fund.

“We are now taking this additional, temporary step after carefully assessing the unique housing situation created by the pandemic.

“A temporary ban on carrying out evictions will give additional peace of mind to tenants over Christmas and into the new year.

“It will also prevent additional burdens being placed on health and housing services, during a time where they are already working hard due to the impact of the pandemic.

“It will allow tenants who are facing eviction, and may decide to take the opportunity to form extended bubbles over the festive period in line with relaxed guidance, time to effectively self-isolate afterwards should they come into contact with a positive person.”

Read more about evictions.

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