Why are Ministers using cladding as another stick to beat landlords?

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Landlords have slammed the government’s leasehold reform plans as ‘riddled with confusion and unnecessary delays’ after it was revealed recently that landlords may be excluded from the latest cladding remediation fund.

That is the message NRLA chief Ben Beadle (main pic) is due to tell MPs when he is quizzed by a committee of MPs later today.

Beadle will also say how many landlords were shocked to discover that, while homeowners are to be given £4 billion to pay for cladding remediation on buildings between 11 and 18 metres high, the government has yet to reveal whether this will include landlords.

And yet, in a recent parliamentary answer, Secretary of State Michael Gove revealed that ‘accidental landlords’ who sublet properties because they cannot sell them due to dangerous cladding will be included in the Government’s scheme.

The NRLA is warning that the Government’s plans are not treating all leaseholders equally. In the process they also risk delaying remedial work on dangerous cladding as the Government seeks to understand who may be an accidental or a buy-to-let landlord.

Speaking ahead of his appearance before the Select Committee, Beadle says: “It makes no sense to be treating leaseholders who are landlords so differently to owner-occupiers.

“Both groups have faced the same problems, and both should be treated equally. We are calling on the Government to rectify this injustice as a matter of urgency.”

Case in point

As part of its campaign, the NRLA has highlighted the case of landlord Ian Davies in Cardiff, who for the past six years has rented out a flat on the fifth floor of a six-storey building to bolster his pension.

He recently found out that the building is covered with flammable timber cladding panels and the whole block has compartmentation issues.

As a result, the six-monthly management fee he pays has increased from £700 to £3,000, completely outweighing his rental income, and now he has ‘serious concerns’ about the lack of support for residential landlords along with the rising costs of service charges and waking watch expenses.

Beadle is due to speak at 5pm and will be joined by Liam Spender from UK Cladding Action Group and Andrew Bulmer, CEO at Institute of Residential Property Management.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Why are Ministers using cladding as another stick to beat landlords? | LandlordZONE.

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Happy Tax Day – BUT NOT FOR ALL

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If you are a private (unincorporated) landlord, today is the last day to pay your tax on your rental profits for the 2020/21 tax year without incurring penalties.

Were you shocked at how much tax you paid?

Below is an example of a private rental business owner who consulted us last year.

View Full Article: Happy Tax Day – BUT NOT FOR ALL

LATEST: Luton finally brings in blanket HMO licensing after years of problems

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Luton Council has finally got its act together and revealed blanket HMO licensing for the town after a number of false starts over the last few years.

HMOs of any size will now need a licence under its additional scheme which launches on 1st April, while all privately rented properties in South ward which aren’t HMOs will also need to be licensed under a new selective scheme.

The council has previously been thwarted by landlords and letting agents as well as its own ineptitude. Luton tried to introduce a scheme in 2018 when its previous additional licensing scheme ended, but faced significant local opposition and then went silent about its plans until December 2019 when its executive committee rubber-stamped them.

However, a group of agents, landlords and concerned residents got together and formed Luton Landlords and Letting Agents Ltd, whose solicitor launched a legal challenge, forcing the council to admit errors in its implementation and decision making, and the scheme was put on hold.

Regulated

Councillor Tom Shaw, portfolio holder for housing (pictured), says the new measures will improve a lot of tenants throughout the town, giving them peace of mind that their premises are being regulated.

He adds: “The introduction of these measures raises the game of landlords too as they will need to comply with the law in order to continue renting out their properties.

“Other parts of the country that have introduced this type of selective licensing have experienced improvements in neighbourhoods, which have enhanced the quality of life for all residents and we anticipate the same happening here in Luton.”

The licence fee for an HMO with up to three bedrooms is £488 with an extra charge of £122 for each additional bedroom, while it’s a flat fee of £488 for a selective licence.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Luton finally brings in blanket HMO licensing after years of problems | LandlordZONE.

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EXPERT: What this week’s Court of Appeal win by landlord means in practice

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A landmark Court of Appeal case with potentially calamitous consequences has cleared up uncertainty about who has the authority to sign section eight notices and deposit protection certificates, explains the lawyer representing the winning landlord company.

David Smith (pictured) of legal firm JMW says if the firm had lost the critical case earlier this week, it would have made business largely impractical and led to tenants making huge numbers of deposit claims against their landlord or letting agent.

“Recent possession orders obtained and not enforced could have been appealed, existing possession orders would have collapsed – it would have had a big impact on landlords across the country…with potentially widespread bankruptcies as a result,” says Smith.

Instead, it was a significant victory as Appeal Court judges found in favour of the landlord in Northwood Solihull v Fearn & Ors, which centred on the Solihull branch of letting and estate agency Northwood.

It had served a Section 8 eviction notice on tenants Mr Fearn and Ms Cooke who argued that this, as well as a certificate for their deposit, had not been signed by two authorised signatories or by a company director in the presence of a witness, but by another company employee instead.

Smith says the ruling means that if you’re a corporate landlord or agent acting in a corporate capacity, your employees can continue to sign documents on your behalf.

Tea maker

“As long as the employee has the authority to do so, for example, a property manager – however, if your job is to make tea then you probably don’t.”

He adds that the Court of Appeal has effectively ruled that it’s up to Parliament to protect tenants with laws: “It’s not for lawyers to come up with tricks to make it more difficult for landlords.”

The tenants have now sought permission to appeal to the Supreme Court although Smith doesn’t think the Appeal judges will give permission and expects that a section 21 will be served.

Reaction

Timothy Douglas, (pictured) Head of Policy and Campaigns, at trade body Propertymark says: “The decision by the Court of Appeal brings much needed clarity to a long-disputed area of the law and is a victory for common sense, which agents will welcome.

“The retrospective judgement from the High Court dangled the possibility for ramifications for the sector with a significant number of claims against agents. Due to the potential implications, Propertymark was pleased to contribute to the costs of the appeal by the landlord.

“The judgement does however go much wider and the same rational will surely apply to virtually every notice prepared for a corporate landlord, from Section 21 Notices to rent increase notices and even notices to quit.”

Watch David Smith talking more about the case.

Read the judgement in full.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXPERT: What this week’s Court of Appeal win by landlord means in practice | LandlordZONE.

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RESEARCH: Why landlords are becoming more semi-detached

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Semi-detached houses have overtaken terraced homes as the most popular properties with landlords looking to buy, as tenants search for more space. 

Research firm BVA BDRC’s survey of 800 landlords for Paragon Bank found that of the 14% who are on the acquisition hunt this year, 40% want to buy semi-detached homes – up from 32% at the start of the pandemic.

If found that 39% are after terraced houses, while detached houses have also grown in popularity during the past two years, up from 9% in Q2 2019 to 18% in Q4 2021.

Other property types on landlords’ wish-list include individual flats (17%) and HMOs (16%).

Activity versus size

The survey also found that the likelihood of being active in the property market increases in line with portfolio size; 8% of single property landlords expect to buy during the next year, increasing to 24% among those with a portfolio of 11 or more homes.

Meanwhile, 52% plan to buy a property within a limited company structure.

Richard Rowntree, mortgages MD, says it has seen a trend for larger homes due to the prevalence of home working, along with more families who are selling their home to relocate and renting before they buy.

He adds: “We may also be seeing landlords anticipating the planned changes to energy performance rating of property and targeting homes that are either meeting the planned minimum EPC level C or those that will be easier to upgrade than terraced homes.

“It will be interesting to see whether this trend continues in the coming months.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – RESEARCH: Why landlords are becoming more semi-detached | LandlordZONE.

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Avoid potential problems as a result of pending carbon monoxide safety legislation

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UKALA has cautioned Landlords and letting agents to act now to avoid potential problems following the announcement that the government intends to pass legislation to extend the requirement to install carbon monoxide alarms in all rental properties in England with fixed combustion appliances.

View Full Article: Avoid potential problems as a result of pending carbon monoxide safety legislation

Housing market leaders vent frustration over stalled leasehold reform

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Leading organisations from the property sector have written to housing secretary Michael Gove imploring him to implement his government’s plans to reform the leasehold system which were announced more than a year ago.

The interest groups represented include conveyancers, deposit protection providers, mortgage lenders, surveyors, estate agents and tech firms.

All are asking Gove to bring into law the measures already announced or supported by the government over the last two to three years, including the Law Commission Reports on leasehold enfranchisement, sorting out ‘right to manage’ and Commonhold, bringing in the much-expected Leasehold Reform Act, preventing leaseholders being ripped off by management firms.

Disappointed

“We are disappointed the government has yet to implement these measures given the exploitation continues and increases with every passing day,” the letter says.

“We would therefore urge you to include the already-announced measures in future legislative plans as soon as possible to avoid further blighting of leasehold and so-called ‘fleecehold’ managed leasehold.”

Beth Rudolf (pictured), Director of Delivery at the Conveyancing Association, says: “We are simply calling on the Government to fulfil its obligations in this area.

“By doing this we can ensure leaseholders can set in motion parts of the property-owning democracy that are simply not open to many of them, such as selling their properties or securing a mortgage.

Time for action

Sean Hooker, (pictured) Head of Redress at the Property Redress Scheme, adds: “This is the time for Government action to restore the confidence of leaseholders, who currently feel like second-class citizens in the property world.”

“The redress schemes deal with the frustrations of leaseholders on a daily basis but are often powerless to help. The balance of power must shift back towards the consumer.

“The measures in the proposals will create a robust framework of rights and remedies and restore balance and fairness to the system that has been eroded as the market has evolved and changed, since the existing laws were introduced.”

Read more about leasehold flats.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Housing market leaders vent frustration over stalled leasehold reform | LandlordZONE.

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Council Bond and DPS now the rent has increased?

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The council is just about to release money held in a deposit Bond which I now have to protect in the DPS scheme. The Bond is held with the Council as such time the tenant pays the total amount of it

View Full Article: Council Bond and DPS now the rent has increased?

Lenders catering for staycation BTL demand

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Consumers looking to take out a holiday let loan to satisfy a rise in demand for UK holidays will find a notable rise in product choice since 2020. According to analysis by Moneyfacts.co.uk, there are now more than 200 deals available in this niche arena

View Full Article: Lenders catering for staycation BTL demand

LATEST: Chancellor under pressure to link stamp duty bills to EPC bands

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An influential energy coalition has called for EPC ratings to be linked to stamp duty in a bid to encourage homeowners and landlords to invest in home insulation and protect against rising bills.

The Energy Efficiency Infrastructure Group, made up of industry, businesses and charities, has written to Chancellor Rishi Sunak urging him to support a new Energy Saving Stamp Duty Incentive.

This aims to encourage people to either buy a more energy-efficient home or incentivise them to make it more energy-efficient afterwards by installing insulation or a heat pump. Households would be charged a lower level of stamp duty for doing so.

Homeowners are being encouraged to get their properties to EPC band C by 2035, while – if the new energy efficiency bill gets the green light – landlords will have to meet the target by December 2025 on new tenancies and on all rented properties by December 2028. There is mounting concern that this could spark many to quit the sector.

The group says that with so many millions of homes to retrofit, its concept of a long-term structural incentive is necessary to engage and prepare the market, and it believes this could prove more effective and simpler than a large-scale, short-term, costly grant programme – while also being revenue-neutral.

Speaking on BBC You and Yours, spokesman David Adams explained: “Stamp duty would be calculated then nudged up and down around a neutral point based on the energy performance of that dwelling, so the better performing the home from an energy perspective, the lower the stamp duty paid.

“If work is undertaken within the first two years, you can get a new EPC and then resubmit that, and you would get a rebate for the difference in stamp duty to what you paid originally and what you would have paid had that work already been undertaken.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Chancellor under pressure to link stamp duty bills to EPC bands | LandlordZONE.

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