Search Results For: buy to rent sector

Second Series of Nightmare Tenants, Slum Landlords to Begin Tomorrow

Published On: March 8, 2016 at 3:41 pm

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Tomorrow night at 9pm, the second series of Nightmare Tenants, Slum Landlords will begin on Channel 5.

The ten-part series explores the dark side the private rental sector and continuing housing crisis. It features leading eviction specialists Landlord Action and the firm’s founder, Paul Shamplina.

Landlord Action believes that the “complexities and sheer amount” of legislation around private rental housing is pushing more and more landlords out of the buy-to-let sector, which is further fuelling the chronic shortage of housing in the UK.

Second Series of Nightmare Tenants, Slum Landlords to Begin Tomorrow

Second Series of Nightmare Tenants, Slum Landlords to Begin Tomorrow

The imbalance between supply and demand is also causing rents to rise, putting a strain on landlord-tenant relationships. Just last month, Countrywide reported that the average rent is now the highest on record.

The second series of the programme will reveal some of the difficulties faced by private landlords and tenants in a market that “needs clear and simplified direction in order to maintain its current level of growth”, according to Landlord Action. It is believed that 30% of all households will live in the private rental sector within 30 years.

The first 60-minute episode of the new series will feature three stories, two of which involve a common landlord issue – rent arrears.

Donovan Nelson, a successful music entrepreneur, has not received rent for seven months from one of his tenants. With costs spiralling out of control, Nelson has called on Landlord Action to help him evict the tenant. However, on the day of the court hearing, Donovan is faced with the news that his tenant is going to fight the eviction, claiming that the hot water is not working.

“This case highlights one of my greatest concerns surrounding last year’s introduction of the retaliation eviction law as part of the Deregulation Act 2015,” says Shamplina. “The new measures protect tenants from being evicted when they raise a complaint about the condition of their home. Unfortunately, some tenants are using this as a loophole to avoid eviction, putting landlords under extreme financial pressure.”

If you are suffering with rent arrears, rent guarantee and legal expenses insurance will ensure that you still get paid and your legal expenses are covered.

Episode one also features a rogue landlord, previously known to the authorities, who is renting a House in Multiple Occupation (HMO) to several tenants in extremely unsanitary conditions, which have caused a rat infestation.

Shamplina comments: “The show is a very real insight into the plights of the buy-to-let world. There are many professional landlords and respectful tenants out there who move from one harmonious tenancy to another, but that is not always the case.

“With increasing amounts of legislation, we’re seeing a rise in the number of landlords and tenants at loggerheads. Designed to offer a balanced view of the market, Landlord Action was thrilled to be invited to take part in the second series and help show landlords and tenants how to protect themselves.”

The first series of Nightmare Tenants, Slum Landlords, which aired in June-July 2015, attracted over 1.5m viewers.

The second series will run for ten weeks, every Wednesday on Channel 5 at 9pm.

Additionally, Shamplina will be co-hosting the new The Property Hour radio show on LBC every Thursday from 9pm-10pm, starting this week.

Landlords’ Challenge of Tax Relief Reduction to Receive Response from HMRC

Published On: March 8, 2016 at 12:38 pm

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Two landlords’ legal challenge of Clause 24 of the Finance (No. 2) Act 2015 will receive a response from HM Revenue & Customs (HMRC) by 16th March 2016.

Under the clause, landlords will not be able to deduct the cost of their buy-to-let mortgage interest as a business expense from their rental income by 2020. This will mean that their rental income will be added to any other income, potentially pushing them into the next tax band.

Therefore, tax will be paid on turnover, not profit, meaning that tax could be due on non-existent income. For some higher-rate taxpayers, mortgage costs above 75% of their rental income will mean they make a loss on their buy-to-let investment.

Landlords' Challenge of Tax Relief Reduction to Receive Response from HMRC

Landlords’ Challenge of Tax Relief Reduction to Receive Response from HMRC

The clause, announced by Chancellor George Osborne in the 2015 Budget, has received criticism from buy-to-let landlords, who have often invested in property to boost their pension pots.

The measure is part of the Government’s plan to turn generation rent into generation buy. Meanwhile, some believe that the Government is favouring large-scale investors over smaller private landlords.

Landlords Steve Bolton and Chris Cooper are leading a legal challenge in an attempt to bring a judicial review of the reduction in mortgage interest tax relief, which will be gradually imposed starting in 2017.

Cooper is a modest investor and part-time landlord, who is boosting his pension through buy-to-let, while Bolton owns around 20 residential and commercial properties, and is also the founder and owner of Platinum Property Partners, a buy-to-let training franchise.

Cherie Blair’s Omnia Strategy has been appointed to represent the landlords.

The application has been filed and signed off by the firm, which gives HMRC and the Treasury until 16th March to respond with an Acknowledgement of Service. This must detail the grounds on which the departments intend to contest the challenge.

The challenge will argue that the Government’s tax change flouts “a long-established principle of taxation that expenses incurred wholly and exclusively for the purposes of the business are deductible when calculating the taxable profits”.

The landlords have set up a crowdfunding page, which had raised just over £50,000 from 740 supporters in January.

A statement from the landlords says: “We expect the Government to respond aggressively. We are hoping for a positive result, but are mindful both that judicial review proceedings are inherently difficult and also that, even if we win, the Government might introduce changes or new measures that are more defensible legally, but still unattractive and problematic for hard-working private landlords.”1

We will keep you updated on the landlords’ case and continue to provide information for landlords on all issues affecting the buy-to-let sector.

1 https://www.facebook.com/clause24/posts/1107773035932366

Eviction orders for tenants fall in Q4 of 2015

Published On: March 8, 2016 at 10:15 am

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The final quarter of 2016 saw 26,676 court orders issued for the eviction of private rental sector tenants.

According to the survey by Your Move and Reeds Rains, the number of orders was down by 0.4% in comparison to quarter three of 2015. Annually, there were 5.3% fewer evictions than the 28,167 recorded in the same three-month period in 2014.

Falls

Data from the report indicates that 32% of private tenants are in serious rent arrears, of more than two months rent. At present there are 82,900 renting households in the serious arrears bracket.

Cases of landlords falling behind with their own finances have also dropped. In the final three months of 2015, there were 5,500 cases of buy-to-let mortgage arrears, a fall from the 3.5% recorded in the previous quarter.

Annually, the total number of buy-to-let mortgages in arrears has fallen by 54% after totalling 11,900 cases in the last quarter of 2014.

Eviction orders for tenants fall in Q4 of 2015

Eviction orders for tenants fall in Q4 of 2015

Growing

Adrian Gill, director of Your Move and Reeds Rains, noted, ‘landlords and the buy-to-let industry have come in for serious criticism over the last year-but the overwhelming evidence points to a vital, growing and successful industry.’[1]

‘Landlords in the UK are providing more homes to let every month, expanding supply for tenants-who avoid any serious problems paying the rent in more than 98 per cent of cases. When late rent does happen, landlords appear to be extremely flexible in the majority of cases and eviction orders and decreasingly necessary. Buy-to-let mortgages are also increasingly reliable for lenders, as landlords are ever less likely to fall into arrears themselves,’ Mr Gill added.[2]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/3/over-26-000-eviction-orders-served-on-private-tenants-in-one-quarter

 

Report Calls for Powers to be Devolved to London to Solve Housing Crisis

Published On: March 7, 2016 at 9:54 am

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Local authorities must be given more powers over house building in London if the capital is to overcome its housing crisis, according to a new report.

The London Housing Commission, lead by Lord Kerslake, states that rogue landlords should be forced to bring their rental properties up to a decent standard or have these homes banned from the market.

The report, released today, puts forward a number of proposals to solve London’s housing crisis.

It claims that all London boroughs should be able to set up their own landlord licensing schemes and use the fees to increase enforcement activity in the private rental sector.

The London Housing Commission insists that London needs a “radical devolution” deal if it is to overcome the severe lack of housing.

Report Calls for Powers to be Devolved to London to Solve Housing Crisis

Report Calls for Powers to be Devolved to London to Solve Housing Crisis

In return for greater powers over borrowing, property taxes and the planning system, the Mayor of London and local authorities would have to make a joint commitment to deliver significantly higher numbers of new homes, it says.

The report believes that devolving powers from central government to London boroughs could double the number of new homes built in the capital every year to 50,000.

It adds that London should be able to retain a significant portion of Stamp Duty money to fund house building.

The London Housing Commission would also like to see local authorities able to set Council Tax premiums on empty and second homes.

Lord Kerslake, the Chairman of the London Housing Commission, comments: “London is facing a housing crisis of unprecedented proportions brought about by a chronic under-supply of new housing. It needs urgently to be building far more houses of all types and tenures.

“The only route to building substantially more homes in London is to give the capital’s leaders more direct responsibility over the key levers, such as land use, planning rules, housing standards, property taxes and investment, and holding them accountable for delivery.”1 

The Head of Policy at the Royal Institution of Chartered Surveyors (RICS), Jeremy Blackburn, responds to the report: “There is no doubt that London faces a housing crisis. As we have always said, the solution relied on all parts of the housing sector firing on all cylinders to deliver all kinds of new homes from Government-funded social housing to private new builds.

“Critically, new and replacement social homes must have protection from Right to Buy in London.”

But Blackburn does not support all of the commission’s plans. He has criticised the proposal to allow councils to set up their own landlord licensing schemes.

He explains: “Though we agree with the London Housing Commission that poor quality homes and rogue landlords need to be addressed, the introduction of individual licensing schemes for each borough would place additional regulatory burdens on landlords and local authorities.

“They would also penalise those that are providing a good service, creating a fractured regulatory framework and hindering institutional investment in the private rented sector.”

However, he does praise some elements of the report: “Given the failure of central government to deliver enough genuinely affordable new homes, a move to devolve powers and responsibility to front line local authorities will help solve some of the issues that are currently blocking the supply of homes.”1 

Do you believe that these proposals would help solve the London housing crisis?

1 http://www.cityam.com/236061/london-housing-commission-calls-for-devolution-to-solve-chronic-lack-of-house-building

 

Are Housebuilders Restricting Housing Supply to Boost Profits?

Published On: March 2, 2016 at 3:33 pm

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Housebuilders have been accused of restricting housing supply in order to boost their profits, by keeping house prices artificially high.

Recent data shows that almost half a million homes in England have had planning permission granted, but have not yet been built. The length of time it takes for property developers to complete a home has also risen from 24 months to 32.

The figures have reignited a long-running disagreement between policymakers and housebuilders over who is to blame for the current housing supply shortage.

While rates of planning permission for new homes have jumped by 60% since 2010, there has only been a 48% increase in the amount of new homes being built.

Labour MP Clive Betts, the Chair of the Local Government Select Committee, claims the failure of the big housebuilders to speed up development was designed simply to boost their profits.

He comments: “I think it is clear that the big developers are building at a rate to maximise their profits, rather than addressing the country’s housing need.”

He notes that some developments have had planning permission, but are not due to be completed for another ten years.

“These are private companies who are very simply trying to make money for their shareholders,” he adds. “They are restricting supply and the Government urgently needs to come forward with measures to address this.”1

Ministers are becoming increasingly concerned about the failure of developers to speed up house building. There have been reports that some Conservative Party members believe that some housebuilders are deliberately restricting the supply of new homes to increase their profits.

Are Housebuilders Restricting Housing Supply to Boost Profits?

Are Housebuilders Restricting Housing Supply to Boost Profits?

The Housing Minister, Brandon Lewis, has his own frustrations with property developers.

He told the Local Government Committee: “When you have got housebuilders delivering, on average, 48 homes a year on some [large] sites, that’s not good enough.

“We know they can go further. Housebuilders will talk about saturating the market. But we are aware that in too many places, we are still taking 20 weeks to build a house when we can do it in three or four.”1

Recently, Taylor Wimpey announced a record operating profit margin of more than 20%, as it sold more houses at higher prices. Pre-tax profits at Britain’s biggest housebuilder, Barratt Homes, have also surged by 40% in the past six months, to almost £300m.

It is believed that ministers are considering new measures to speed up the rate of development, amid concerns that they will not hit their target to build 1m new homes by 2020.

New policies could include forcing housebuilders that buy publicly owned land to commit to rapid construction as part of the planning process.

Glenigan, the housing industry analyst, compiled the latest data for the Local Government Association, which was released in January.

It found that 475,647 homes in England that have been granted planning permission were yet to be built in 2014/15.

In 2012/13, the total number of homes given planning permission that were yet to be built was 381,390, and 443,265 in 2013/14.

A spokesperson for the Home Builders Federation, which represents developers, reports that the most recent Government figures show there were 170,690 net additions to housing stock during 2014/15 – a 25% increase on the previous year.

They claim: “The industry has delivered unprecedented increases in supply over the past two years, driven predominantly by the large private sector housebuilders.

“This has been on the back of the pro development policies introduced in recent years and a general increase in demand.”

They blame the planning systems of local and central government for the shortage of housing supply.

“As a priority, it needs to work with local authorities to speed up the planning system and ensure local plans allocate enough sites of different types and sizes that are attractive to a range of companies.”1

The latest property news can be found at LandlordNews.co.uk.

1 http://www.theguardian.com/business/2016/mar/01/developers-restricting-supply-of-new-home-to-boost-profits

Things to do on Your Extra Day in 2016

Published On: February 28, 2016 at 9:19 am

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We have the gift of an extra day to enjoy this year, and as a landlord, there are many things that you may consider doing in these additional 24 hours. So what will you get up to? We have a few options to consider…

The nitty gritty

Not the most exciting of activities for your extra day, but as a landlord, it is vital that you keep on top of all property maintenance and lettings admin. If there are any odd jobs you’ve been putting off, now is the time to do it. Call your tenants and arrange to go round and update their furniture, or organise some routine inspections – you won’t regret getting ahead and keeping everything in order.

What’s going on in the world?

Things to do on Your Extra Day in 2016

Things to do on Your Extra Day in 2016

If you’ve not had the time to sit down and catch up with the goings on of the property world, now is an ideal time. At Landlord News, we bring you all of the latest happenings of the buy-to-let sector, rental market, landlord law and finance world. And if you can’t relax at your computer and browse our website, why not check our mobile or tablet site while you’re on the move?

Tenants, tenants, tenants

With rental demand still soaring, there’s no shortage of tenants looking for properties. But there is a lack of rental homes, so, if you’re going through a void period, use your extra day to search for some nice new tenants. If you haven’t had tenants in a while, it may be that your property needs updating or you’re targeting the wrong type of renter. Find out where you’re going wrong and fix yourself some fresh faces.

Perfect your portfolio 

With the extra 3% Stamp Duty surcharge looming, landlords are rushing into the property market to avoid paying masses of additional tax. But be quick – if you wish to expand your property portfolio, you will need to complete on a purchase before midnight on 31st March. If you are planning another investment, you may want to consider one of these buy-to-let hotspots.

Get to grips with the sector

It’s not just Stamp Duty that landlords are facing this year; there are many forthcoming changes that will affect buy-to-let investors in the future. There are several financial changes that will change your lettings business, so get your head around these and work out how you individually will feel the impact. Our latest news section will keep you updated on all of your responsibilities and provide you with all the advice you need.

What does the future hold?

With so much change set to hit the buy-to-let sector, you may want to consider your long-term plans for your lettings business. Could you start operating as a limited company? Or maybe you will finally start to use a letting agent to manage your properties? You may even decide to protect your rental income by investing in rent guarantee insurance. Just remember to ensure you’re doing what’s best for you.

And finally… 

How’s the perfect way to spend an additional day? With your feet up of course! Don’t forget to take it easy and enjoy yourself on the 29th… You’ll still have another 306 days to take care of everything else.