What can landlords expect from the government after the election?

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Rental Property:

Housing was a major
election issue this time, given the general acceptance that housing
is facing something of a crisis in the UK. Both of the main parties
had proposals for the private rented sector (PRS) in their election
manifestos, particularly Labour with its proposals to radically shake
up the sector; rent controls, forced sales, capital gains hikes and
ending the shorthold tenancy being the main fears…

Labour had planned
new policies which would have seen a huge expansion of tenants’
rights, including government funded renters’ unions, open-ended
tenancies, removing immigration status checks, and removal of a
landlord’s rights to exclude tenants on housing benefits.

Rent rises would
have been capped in line with inflation, while some cities would have
been given the right to impose further restrictions, as well as
introducing an annual MOT check on all rental properties, coupled
with a national landlord licensing scheme.

Capital Gains Tax
was to be brought in-line with income tax, in most cases from ten per
cent up to 20, 40, 45 and 50%, depending on individual circumstances,
while removing the current £12,000 tax-free allowance. However, a
concession was to be applied for those with long-term lettings.

Landlords therefore
will have breathed a collective sigh of relief last Friday morning
when it became clear that a huge threat had been lifted, though the
Tories still intend to carry out their plans already in train to make
renting more tenant friendly. Indeed, the plan to remove Section 21
is slated to be in the Queens speech this Thursday.

That the
Conservatives plan to scrap no fault evictions is no longer news, but
perhaps less welcome than the suggestion that lifetime deposits
become mandatory.

The Conservative
manifesto confirmed that existing plans to abolish ‘no fault’ Section
21 evictions would be scrapped in England and Wales, bringing the
system in this respect in-line with Scotland, though the introduction
of a Housing Court or Tribunal in operation in Scotland is still in
question, and probably unlikely.

It is more likely
that a beefed-up Section 8 procedure will be introduced with extended
grounds for possession and a “stream-lined” court process, the
details of which are yet to be revealed. Unlike a no fault notice,
Section 8 notices will only operate in circumstances where a breach
of the tenancy rules has occurred, thereby giving landlords the
opportunity to take a tenant to court and argue their case.

The lifetime deposit
system would replace the current system in which tenants are having
to raise a deposit twice when moving: leaving their old deposit under
the landlord’s/agent’s control, while raising another one for the
new tenancy. The whole process involves a substantial amount of
money, especially where rents are high in the capital for example.

The lifetime deposit
suggestion would mean that deposits can be transferred from tenancy
to tenancy, a seemingly ideal solution, but the devil will be in the
detail here; what happens if there’s a deposit dispute – all yet
to be revealed.

In addition to these
two key changes, there was a whole raft of other reforms in train and
due to be implemented next year, most of which it can safely be
assumed, will now go ahead.

• Next April sees the final phase of George Osborne’s 2015 tax changes. Landlords will no longer be able to claim any tax relief on mortgage interest payments, apart from a Tax Credit of 20%.
• Energy efficiency rules that came in last year will be extended to all existing tenancies from April next year. Properties with an EPC rating of F or G will not be able to be rented out from that date onwards.
• Currently homeowners who have previously lived in a property but have since rented it out can claim capital gains tax relief on the sale of the property for up to 18 months after they moved out. From next April this period will be reduced to nine months under changes to the Private Residence Relief. This could have significant implications for many ‘casual’ or ‘accidental’ landlords and is expected to raise an additional £470million for the Treasury over five years. Anyone in this position and wanting to sell must do so before April 2020 to avoid any additional Capital Gains Tax.

David Smith from the
Residential Landlords Association said:

“On the pledge by
the Conservatives to end so called ‘no fault’ repossessions, we
agree that the system needs to be reformed, but this needs to be done
properly.

“Whilst any new
system should protect tenants from the minority of landlords who
abuse the current rights, it is important that good landlords can be
confident that in circumstances such as tenant rent arrears or
anti-social behaviour they can swiftly and easily regain possession
of their property.

“We want to see
comprehensive reform that works for both landlords and tenants.

“This should
include setting up a dedicated housing court offering easy and
inexpensive access to justice for both tenants and landlords.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – What can landlords expect from the government after the election? | LandlordZONE.

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New process agreed for valuation of high-rise buildings

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RICS, the BSA and UK Finance have agreed a new industry-wide process to be used by valuers, lenders, building owners and fire safety experts in the valuation of high-rise properties.

The new External Wall Fire Review process will require a fire safety assessment to be conducted by a suitably qualified and competent professional delivering assurance for lenders

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Nationwide call to use empty homes

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Nationwide Building Society is urging the new Government to resurrect abandoned funding that would bring thousands of empty properties back into use.

With an estimated 226,000 empty properties in England[1], the Society believes the time for action is now.

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New Father of the House and leasehold reform?

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I note since the latest general election that the new Father of the House is Conservative MP Sir Peter Bottomley. One of his main activities has been to push through leasehold reform.

This is particularly in response to “new builds”

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RLA concerns about impact of stamp duty levy included in Commons briefing paper

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A briefing paper on stamp duty reform published today by the House of Commons library includes concerns raised by the RLA relating to the policy. The briefing, which you can read here, discusses the reforms to taxation of sales of residential property that have been made in recent years. The briefing includes a reference to […]

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Top new home builders

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Stone Real Estate collected the latest annual results for 11 of the UK’s biggest housebuilders to see who was top of the pile when it comes to the delivery of homes within the sales market and who has stepped up their game the most compared to the previous year.

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UK regeneration opportunities ranked

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Property Development:

Birmingham
is
the top council
area in
a new ranking of re-development opportunities
for
investment in empty residential and commercial properties.

New
research by UK fibre broadband specialist Glide, based on a series of
FOI requests to local councils, identifies the extent of empty
dwellings and commercial properties in these localities, and for
councils across the UK.

Collectively,
says
Glide, across
both categories of buildings,
in the month of September 2019 there were 617,527 empty properties
across the UK.

Of
those councils which held this
detailed
information, Birmingham has
been ranked by Glide as the
leading council
area offering
the most
potential space, with 8,086 residential properties and 7,622
commercial buildings in the city and its suburbs being empty.

Liverpool
comes second with 15,339 buildings currently unoccupied, while
regions across the north dominate the top five; Manchester, Leeds and
Bradford also ranking highly.

Bradford
has the highest number of commercial properties currently empty, with
7,908 business premises currently unoccupied, which means that 4.5%
of all empty commercial properties in the UK are located in that
council
area.

Birmingham
has the second highest number of empty commercial properties (7,622),
followed by Leeds (4,528) and Liverpool (4,266).

The
FOI requests found that there are a total of 172,217 empty business
units across the UK, which perhaps suggests a huge potential for
investment, particularly in cities and regions that have felt the
harshest effects of recent financial uncertainty.

Whilst
this information points to potential opportunities for investment,
redevelopment and re-purposing in many
cases, especially given the possibility of a post-election boost to
the economy, some locations are still
suffering
severe economic decline.

Nevertheless
opportunities still exist. To take one example, after
the government’s sell
off of county court buildings following moves to modernise
the court system, relying
more on IT to reduce the need for face to face hearings, and to
cut
down the need for travel to the court, many
were sold off at what now look to be bargain basement prices.

Between
2010 and 2017 the Ministry of Justice has sold off £223 million in
court real estate and in London alone £175 million has been raised
by selling these
buildings off, many of which have become hotels.

The
250-year-old
Bow Street Magistrates was
sold
to Qatari investment firm BTC, with planning permission to convert
into a 100 room hotel, and
both
Old Street and Tower Bridge courts are
already
converted into luxury hotels. The
Bloomsbury
and Central London County court have been demolished, to
be replaced with 73 homes, selling at
around £15
million each.

In
fact Bow
Street Magistrates was sold off
in
2008 for £17 million and
was re-sold
on again in 2016 without
the developer doing a thing for
£75 million, a
nice litter earner for them; but one should bear in mind, this was a
risky buy at the height of the great recession.

These are all large scale development but there have been plenty of smaller commercial buildings across the provinces sold for much smaller sums, and representing very lucrative opportunities for investor developers big and small.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – UK regeneration opportunities ranked | LandlordZONE.

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Landlords warned as rogue agents expelled from ombudsman scheme

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Three agents have been expelled from The Property Ombudsman after leaving landlords and tenants thousands of pounds out of pocket. Let365co Ltd (trading as 365 Residential) Soham, Cambs Soham estate and letting agent Let365co Ltd (trading as 365 Residential) has been expelled from The Property Ombudsman (TPO) scheme owing a landlord £1,895. The landlord made […]

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Rightmove predict 2% house price inflation and rising rents for 2020

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With increased political certainty post general election and the potential release of pent up demand, Rightmove are predicting 2% house price inflation for 2020. This is more than double the current annual rate of 0.8%, but it’s still a relatively marginal increase in a price sensitive market.

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Soham, Bristol and East London agents expelled from TPO

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Buyers, sellers, tenants and landlords in Soham, Cambridgeshire, are being warned that a local estate and letting agent Let365co Ltd (trading as 365 Residential) has been expelled from The Property Ombudsman (TPO) scheme owing a landlord £1,895 of a £3800 award made by the Ombudsman.

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