Tuesday, 30 May 2017

Is the day of the tenant’s deposit about to be over?

By Rayhan Rafiq Omar


It’s without doubt the most painful and stressful part of renting: forking over large amounts of money to keep landlords feeling comfortable.

The tenancy deposit was so abused that it took major legislation and punitive rules about returning deposits in a timely manner.

Legislative guidance is always tricky. Boris Johnson’s ‘London Rental Standard’ didn’t quite hit the mark: https://twitter.com/rentpro/status/867698819856822272

For many tenants, the fact they need to hand over one deposit while a previous landlord still holds their cash is debilitating. We all witness the stress this causes tenants.

To help, a number of solutions have come to market in just the last 12 months.

Some of these solution providers have already faced off with spats on twitter about which method is better: looking at you Curran McKay and Kristjan Byfield.

If you weren’t witness at the time, it’s well worth a read: https://twitter.com/curranmckay/status/815978914912862208

So what can tenants do instead of handing over a deposit?

If you guessed insurance, it’s certainly the most funded option: Curran McKay’s Reposit is backed to the tune of £400k and Jon Notley’s Zero Deposit Scheme has the backing of ZPG.

The product is fairly simple: instead of handing over a six week deposit that you may or may not get back, pay one week’s rent to purchase insurance for your landlord in-lieu of handing over a deposit.

Whether the claims process for these new insurance products are to landlords’ expectations is yet to be tested.

There’s no doubt that – given the choice – many tenants would prefer this option. But one thing is for certain at this point: it won’t be the tenant’s choice.

If a landlord wants a deposit, will a tenant really forgo the property? And what incentive does a landlord have for wanting insurance instead of a deposit?

A smart colleague of mine is often heard saying if the customer experience isn’t ten times better than what people normally do, then people will stick with what they normally do.

Enter Kristjan Byfield of Base Property Specialists and his new product: The Depositary.

The service hasn’t yet launched, but is clearly targeted at helping lettings agents by automating the process of administering deposits.

The Depositary has partnered with TDS, the largest deposit protection scheme, which would make it much easier for a landlord’s agent to adopt the system.

Will this be better for a tenant? If you read the twitter spat, then Byfield certainly believes it’s a win for the tenant with better communication and no need for extra fees.

In a world where legislation in England will soon mirror that of Scotland by banning tenant admin fees, reducing risk and cost will be top of mind for lettings agents.

That could play into the hands of The Depository and prevent the adoption of insurance-based deposit replacement schemes.

But then again, with Zoopla’s backing of Zero Deposit Scheme, that could make offering the choice to tenants an automated option that pays agents a commission for introductions.

Either way, tenants should win with increased choice to suit their concerns. It’s about time Generation Rent benefited from innovation.

You can view the websites of the three schemes mentioned here:





Coming soon. My interview with Martin Skinner

Coming soon, my interview with Martin Skinner, one of the countries top producers of micro luxury apartments.Martin is one of the few people makes me look medium build. :)

Uber announces first involvement with private rental sector

By Graham Norwood

Uber and a Build To Rent developer have announced a PropTech deal which will see the transport company getting involved in the private rental sector for the first time.

Tenants at schemes operated by BTR firm Moda Living will receive up to £100 in Uber credits per month if they agree not to have a car parking space in the building. Using a bespoke app, residents will hire an Uber when they wish.

Moda Living is currently building some 6,000 rental-only homes in major cities across England and Scotland, coinciding with locations where Uber operates.

By partnering with Uber, Moda Living claims it will “create more sustainable developments as city leaders tackle the challenge of building millions of homes while also reducing emissions.”

Moda proposes to have schemes in in London, Edinburgh, Glasgow, Leeds, Liverpool, and Birmingham; its first scheme, Angel Gardens in Manchester, is currently under construction and will house close to 900 residents when it completes in 2019.

Moda Living’s buildings are created only for rent, and include shared areas that - in the firm’s words - “mimic a high-end hotel.”

The company plans to offer tenants a bespoke app to connect with each other, control heating and entertainment, as well as order food and other services, such as booking a ride through Uber. Uber integration will offer Moda Living customers a frictionless city centre renting experience.

“Cars are one of the most expensive assets most people own, but they’re used just five per cent of the time. Our mission is for everybody to have a reliable ride at the touch of a button so they don’t need their own car. These plans for what will be a unique partnership with Moda Living is a big step forward in making that a reality. By getting more people to ditch their own vehicles we can put some of the space wasted on parking to much better use” says Jo Bertram, regional general manager of Uber in the UK.

Johnny Caddick of Moda Living says: “Our apartments are for rent rather than for sale so we need to consider how our customers will live in cities in the future. A partnership with Uber would not only give our customers an affordable ride at the touch of a button - it would also enable us to design better buildings with more space for social interaction.”


Monday, 29 May 2017

First time buyers make up more of the mortgage market for fourth month in a row

Small deposit buyers continued to increase their share of the UK mortgage market in April 2017, the fourth month in a row they have done so, new research shows.

This group of buyer, which included most first time buyers, accounted for 21.5% of the overall market in April, up from 21.4% in the previous month and up from 16.1% in December 2016.

The details from the latest mortgage monitor report from residential chartered surveyors e.surv also shows that the overall mortgage market has grown in the last month, stopping the recent decline.

There were 67,035 loans approved in April, up compared to both last month and the same stage last year and the first monthly rise since November 2016, a rise of 0.3% month on month and up 1.7% year on year.

‘There was even better news for first time buyers and others with small deposits. That is not to say there aren’t significant challenges ahead, but data from the market this month is overwhelmingly positive,’ said Richard Sexton, director of e.surv chartered surveyors.

‘First time buyers are the lifeblood of the property market. Low rates and better availability have helped people buy their first home. Their presence then allows others to move up the ladder and keep the whole market moving,’ he added.

April was the third month in a row that the proportion of loans given to home buyers with large deposits was below the 35% mark. While market share increased slightly month on month, the trend in recent months has been towards small deposit and middle market borrowers.

Large deposit borrowers, defined as those with a deposit of 60% or more, took 34.6% of the market in April, slightly higher than the 34.4% recorded in March but still down on the high of 35.4% recorded in January.

‘There are historically low mortgage rates on offer across the board and this has helped the overall market grow this month. The proportion of borrowers with large deposits has improved compared to March but still remains below the 35% mark,’ Sexton pointed out.

When broken down on a regional basis, Northern Ireland saw more small deposit borrowers than anywhere else during April 2017 with 34.6% of the market. Only two other regions saw more than a quarter of loans go to small deposit borrowers, the North West where 31.6% of all loans went to this segment of the market and Yorkshire at 28.9%.

Northern Ireland, the North West and Yorkshire were the only three regions where there were more small deposit buyers than large deposit ones. In Northern Ireland 28.9% of loans went to large deposit buyers while in Yorkshire it was 25.4% and in the North West 24.3%.

Scotland saw the smallest proportion of loans go to first time buyers and others with small deposits. In total 18.4% of loans went to this part of the market in April, a smaller proportion than anywhere else in the UK. This was well below even London, where 20.2% of all loans went to smaller buyers.

London saw 38% of its mortgage approvals made to borrowers with a large deposit, the highest proportion recorded in this survey, followed closely by Scotland with 37.9%, he South East at 37.3%, the South and South Wales at 37.2% and Eastern England at 35.7%.

‘Northern Ireland is the best place in the UK to get on the ladder if you only have a small deposit saved. However, other regions such as the North West and Yorkshire have provided equally fertile ground for new borrowers so far in 2017,’ Sexton added.


New courses launched to help landlords ‘minimise the risk of a dispute’

By Marc Da Silva

Buy-to-let returns continue to beat all other mainstream investments, including commercial property, UK government bonds and cash, while remaining a highly popular alternative to the volatility investors often risk when investing in the stock market.

But some landlords are putting their property investments - probably their biggest assets - at risk by failing to comply with basic legislation.

“In recent months, our adjudicators have reported seeing an increase in cases where appropriate documents and evidence aren’t available or are incomplete,” said Michael Morgan, director of dispute resolution at the Tenancy Deposit Scheme (TDS).

To help landlords minimise the risk of a dispute arising with tenants, the TDS has announced new dates for its Academy courses, delivering training on disputes and adjudication to property professionals and landlords.

TDS’s popular Foundation Course and Adjudication Workshops, which will be held in major cities across the UK, will provide accredited Continued Professional Development (CPD) certification.

The Foundation Course is a full day training session focussing on the key points of tenancy deposit protection and is designed specifically for landlords, as well as property managers, administrators and inventory suppliers.

The training session will cover a wide range of topics covering legislation, tenancy agreements, check-in and check-out procedures, calculating damage and whether disputes are appropriate or not.

The Adjudication Workshop is a half-day course that teaches landlords how to ‘think like an adjudicator’. It will focus on TDS’s Alternative Dispute Resolution programme, discussing various scenarios and case studies.

Attendees will hopefully leave with a better understanding of what evidence an adjudicator looks for in disputes and provides tips for presenting a case, and resolving disputes.

Morgan added: “We still see cases where tenants raise the same arguments challenging the accuracy of check-in reports – claiming they never got one, never signed it, or that it did not show the property’s condition accurately. These are all issues that can be addressed in advance with good check-in and check-out procedures – and it’s not difficult to document that has happened in the event of a dispute.

“Our CPD courses are designed to help landlords and property managers to minimise the risk of a dispute arising by helping them create well-documented check-in and check-out report, supported by good quality photographs.”

Courses will run throughout the summer and into Autumn, at the dates and cities below:

Foundation courses                                                         Adjudication workshops

Manchester         31st May 2017                                     Birmingham         22nd June 2017

London                 14th June 2017                                     Manchester         19th July 2017

Newcastle            12th July 2017                                       London  13th September 2017

Exeter                    27th September 2017      

Cardiff                    22nd November 2017


Friday, 26 May 2017

London sees one-third drop in homes available to let, reports ARLA

By Graham Norwood

ARLA Propertymark says the number of properties managed per member increased marginally last month, from 183 to 185 - but there was a very different picture in London.

In the capital, the number of properties managed per branch fell by 32 per cent from 148 in March to 101 in April.

ARLA Propertymark says the number of tenants negotiating rent reductions fell last month – 2.8 per cent of agents witnessed tenants successfully negotiating price cuts, whereas in March 3.6 per cent reported this happening.

Some 24 per cent of letting agents saw landlords increasing rents in April.

Meanwhile the number landlords selling their buy to let properties remained the same, with an average of four selling per branch.

In April, tenants stayed in their rental accommodation for an average of 17 months, a decrease from 18 months in March. This is the first time since June 2016 the average length of a tenancy has dropped to a figure this low.

There are 65 prospective tenants registered per branch.

“Although the rental market in London has seen a large drop in the supply of properties to rent, it’s a different picture in the rest of the UK where we have seen little or no change to activity since March. It’s likely we’re seeing the rest of the rental market outside of the capital plateau as a result of the election in June, with renters potentially holding back on their property searches” says David Cox, ARLA Propertymark chief executive.


Major landlord to scrap tenancy deposits

By Marc Da Silva

Rental operator Get Living has announced that it is to abolish tenancy deposits for new residents from July and return existing deposits collectively worth £3m to more than 3,000 existing tenants.

Get Living is behind the country’s largest single-site PRS scheme at the former London 2012 Athletes’ Village, now called East Village, E20, which features 1,439 homes, with a further 4,000 homes in the pipeline across the UK.

Deposits will be returned to all tenants on the condition that they meet various requirements, which include having passed referencing or possessing a guarantor and being up to date with their rental payments.

Neil Young, CEO of Get Living, said: “We know that the cost of living can be high so, as a responsible landlord with a long-term perspective, it is important for us to be able to identify and address areas where we can alleviate the burden on our residents.

“Scrapping security deposits as a pre-requirement and returning deposits to current residents is yet another step we are taking to show we are firmly on the side of renters.”

Young hopes that deposit-free renting “becomes the norm” to help make the PRS even more attractive for renters.

He added: “We have great relationships with our residents and, given they are taking such good care of our homes, why should we hold six weeks’ rent?”


Thursday, 25 May 2017

UK homeowners face future of shrinking properties as housing prices continue to rise

By Felicity Hannah
The latest property trend gives ‘downsizing’ a whole new meaning, but do we really want to live like this?

Life size: as prices get bigger, square footage is getting smaller... and smaller Getty
Us Brits may occupy some of the smallest spaces in Europe, but even a one-bedroom flat could soon seem spacious compared to what the future may hold for hopeful homebuyers.

One developer is taking the whole issue of limited space in our city centres to a new level with what’s been dubbed the “micro home” – a one-bedroom flat with a sliding wall so the owner can choose between one bedroom or two really tiny ones.

Inspired Homes, the firm working on the concept, pitches it as the solution for cash-strapped first-time buyers who need extra income from renting out a second bedroom, either for the mortgage, or to get them through the month after forking out in an eye-wateringly expensive market.

Designed for life?

We may each own more stuff today than ever before but Martin Skinner, chief executive of Inspired Homes claims these tiny spaces are likely to play a major role in the future of the British housing market.

“High spec, well-designed micro-apartments are growing in demand not just because they are more affordable but also because of the changing way people live,” he says. “For example, with growth of the sharing economy and more possessions like music and film collections stored in the cloud, it is now much easier to live in smaller apartments than it was in the past.”

Living loopholes

Tiny homes have long been touted as a solution to providing more affordable property but historically the government’s nationally described space standard made it difficult for developers to obtain planning permission, even when there was customer demand.

However, these space standards do not apply for office-to-residential conversions, meaning that home-builders have had greater freedom since 2013 when new rules came into force encouraging such developments.

And the housing White Paper published at the start of the year suggested the government plans to review current space standards as part of ensuring consumers are offered a wider and more affordable choice.

Providing greater customer choice is one thing but this could also be seen as the final slide towards a future in which first-time buyers are forced to accept homes so small that they couldn’t swing a kitten, even if they could afford to give up the floor space to a litter tray.

National issue

London and other big cities are of course particularly affected by shrinking home sizes, thanks to the limited space and almost unlimited property values. Buyers may well prefer a micro-home if the other options are limited to paying rising rents to live in someone else’s property or moving out of the city altogether.

But this isn’t just an urban problem. One study carried out by the University of Cambridge recently found that 55% of UK dwellings fall short of the accepted internal space standard.

In fact, the UK has the smallest homes by floor area in Europe; the average newly built home here is just 76 sq m compared to 137 sq m in Denmark.

The Royal Institute of British Architects (RIBA) has warned that more than half of new homes are being built to a scale too small for families to live in, describing them as “tiny, rabbit-hutch new-builds”.

Jane Duncan, president of the institute declared in 2015: “We urgently need new homes, but building small homes or cutting corners when converting office buildings to flats is short-sighted and fails the people these new homes are meant to serve.

The government must take action to ensure a fairer minimum space standard is applied to all new homes across the country.”

Instead of acting to enforce minimum standards as RIBA demanded, it seems the government is willing to consider doing away with them altogether.

Does it matter?

It could be argued that we need to get real. Space, particularly within cities, is at a premium. And, while Halifax figures suggest that the housing market is beginning to cool, supply issues are likely to ensure prices do not fall far.

So maybe new buyers need to accept smaller homes in order to get a foot on the rung of the housing ladder. Some ministers certainly seem to think so.

In October last year the housing minister Gavin Barwell told the Conservative conference that relaxing the rules on the size of new-build flats could help prevent young buyers from being priced out of the market.

“Now look: most people, given the choice, would like to live in a nice big home,” he admitted. “But I think for many young people – if I was 22 today, I would rather have the chance to own that than be priced out.”

However, some academics argue that space is not simply a ‘nice to have’ optional extra, it is fundamental to our wellbeing.

“A lack of space affects quality of life,” concluded the Cambridge report. “As well as simply allowing people to have a comfortable standard of living, additional space can also reduce stress by allowing members of the same household to engage in different activities at the same time, and ease feelings of claustrophobia experienced in small spaces.”
Desperation is never a good look for buyers but the property market is so seriously undersupplied that there’s huge competition for the new homes available.

That doesn’t just drive up prices; it can affect standards as well. Recent months have seen concerns expressed over some of the major builders’ quality and the selling of leaseholds to investment companies that force up ground rents.

The fear now is that adequate space is yet another standard that will fall by the wayside if the UK keeps failing to build the number of homes we need.


Landlords selling up as buy-to-let tax changes begin to hit

By Marc Shoffman


Evidence may be emerging of landlords selling up as their profits dwindle.

In April, the phasing out of relief on mortgage interest was introduced.

A survey by insurer Cover4LetProperty found that 11% of tenants have had to move as their landlord had sold up.

This was the first time this has been quoted in the annual survey as a reason for tenants moving.

Overall, almost half (49%) of 100 tenants surveyed said they have moved in the past five years, with 27% citing the cost or wanting to live in a different area.

The number of tenants complaining about the condition of the property declined from 19% in last year’s survey to 14%.

Another 8% wanted more space, while 5% did so because they were not allowed pets or did not get on with the neighbours.

Just 3% blamed poor relations with their landlord, down 3% from last year.

Richard Burgess, director at Cover4LetProperty, said: “Our survey this time highlighted two standout results for us.

“Firstly, that tenants moving due to bad property conditions has decreased, suggesting that let properties are being improved and invested in.

“For the first time, we see that tenants are moving because landlords are selling up.

“While this could be simply due to landlords realising profits in their property, it could also be that increased legislation and fees are making it much more difficult for landlords to make a sustainable profit. Only time will tell if this trend continues.”


Wednesday, 24 May 2017

Social housing is good. But let’s make it beautiful too

By Zoe Williams
The big parties speak only of practicalities. Perhaps they should try focusing on aesthetics for a change

Central Hill in Crystal Palace, London, one of the threatened estates by celebrated council architect Ted Hollamby. Photograph: Simon Elmer/Architects for Social Housing
Ostentatious parsimony was the phrase used by Kate Macintosh, the woman responsible for some of the most ambitious local authority housing of the 1960s and 70s, to describe the spending environment for the social architect. Housing ministers would speak with pride of stripping out unnecessary extravagances, such as balconies and windows.

The philosophy went beyond thrift. In social housing, anything above the bare minimum was lavish, and anything lavish was an insult to the public purse. In the 90s, as PFI contracts took hold, the ostentatious parsimony of the state met the carelessness of the investor. How much does a landlord care about liveability – about grace, light, views and carbon emissions?

The result was not so much universal declining standards – architects, unavoidably, still have talent, energy and ambition – but the dishevelment of public housing. We lost all confidence in our collective ability to create a proud and, in the old-fashioned sense, awesome built environment.

In their manifesto last week, the Tories promised to build a million homes by the end of 2020, 500,000 more by the end of 2022. This is semantically more than Ed Miliband’s promise at the last general election of “up to” a million by 2020, and atmospherically equal to Jeremy Corbyn’s “over a million new homes” by the end of the next parliament. There is almost no detail in Theresa May’s plans as to how the housing is funded, or who it would be for, except that 160,000 homes would be built by the government on its own land. The Tories are clear on what they are against: poor-quality homes, careless developers, high land costs and poor planning. And they raise an idea that they obviously consider meaningful, since it’s capitalised: new Council Housing Deals, to support “ambitious, pro-development local authorities”.

Yet there is no sense that any of those modern ills are within the government’s power to control – no sense of how to enforce better quality, how to make developers care, what to do about land costs, or what better planning looks like (for instance, would it be more centralised or more devolved?). What is an ambitious, pro-development local authority? One whose ambitions are to sell its land to developers for private homes? Or one that is developing its own land for the housing of its own residents? This is more than strategically ambiguous: it is completely opaque. Likewise, those 160,000 homes built by government - in private partnerships? Or are they going to insource construction? And who would those homes be for?

Labour is clearer: at least half its million homes would be built by councils or housing associations to be “genuinely affordable” (this is framed as a break from the current definition of affordability, 80% of local market rent). They’re also explicit on building carbon-neutral housing, and on minimum space requirements.

In short, everybody can see there is a problem. Very few people celebrate the housing solutions of the past: Margaret Thatcher’s council house selloff that delivered social housing into the hands of private landlords and left the government with a colossal housing benefit bill. Scarcely anyone, from any point on the political spectrum, favours a hands-off state approach (except Ukip, whose answer is to let developers build anywhere, on anything – except golf courses).

Yet there is a fundamental implausibility to all these promises: nobody really thinks they themselves will end up living in one of these million, or more than a million, homes. The only people who think they’re a possible candidate for social housing are those who are already on waiting lists, but the number who can’t afford private rent is far greater. Any housing that isn’t specifically ringfenced as social is assumed to end up in the hands of an investor.

The rhetorical fixation on “rabbit hutches” (everyone pledges not to build those) conjures a future in which developers develop faceless, high-density blocks, and a planner goes round with a ruler to check they’re suitable for dwellers larger than a rabbit. When parties promise a million homes, we imagine a million little boxes that we can’t afford, or won’t be for us.

Two years ago I started kicking about at an architectural practice called Studio Egret West. They wanted a book about their philosophy; I wanted to think about something other than politics, which – as improbable as it sounds now – was very boring just before the 2015 election: small, consumer policies from cantankerous men. The architects’ conversations were in fact intensely political: approaching housing aesthetically is just a different kind of politics.

They talked about how putting a million more houses in a country changes that country, and how that needn’t be for the worse. You can densify a city and make it greener, not greyer, with living walls, winter gardens, landscape planning that marries the botany to the building, parks in the sky, and ideas to restore to nature the space that the building appropriated, turning it seamlessly into a vision of sustainability and zero-carbon living. Equality came up as a function of design: how do you create a sense of community in a mixed-income development, except through shared space?

Neighbourliness cannot be handed down by diktat. They described how to meet the constraints of space with more imaginative ways of shaping and using it, and how housing should never be tucked away and separated from the industry and activity that is the pulse of its city. They talked about how to build upwards without devastating the skyline or oppressing the people on the ground.

They described how understanding the history and the narrative of the architecture that came before would imbue new buildings with a sense of modernity through continuity, instead of a jarring newness. They described a future city that could properly house its people without turning them into extras in Bladerunner.

And if you ever said, “this sounds expensive”, they said there is nothing more expensive than something ugly that has to be demolished. Concrete accounts for 5% of all human-generated CO2 emissions. As Macintosh says: “What is barely acceptable to one generation becomes an insult to the next. It is always good economics to provide the best and get it right first time.”

I didn’t write the book, in the end: they wrote it themselves. But I realised what’s missing from this conversation, why the promises never stick. It’s not the detail, the intricate plans on who will build what, who will pay, in what private-public permutation, and who will live in the homes. That’s missing too. But what is missing in the first instance is beauty.


Trade group wants new government to improve slow court process

By Graham Norwood

The Residential Landlords’ Association is demanding that the new government improves the “slow, complex, and underfunded” system which means that it takes an average of 43 weeks for landlords to repossess properties after tenants stop paying rent.

The association says that it is unacceptable but not entirely surprising that faced with such a long wait some landlords seek to take the law into their own hands and force tenants out.

The RLA has made an improved court system one of its key demands of political parties in the build up to the June 8 General Election.

It says tenants, too, find the court system equally slow and hard to navigate. When faced with landlords who are not fulfilling their repairing obligations it is difficult for tenants to establish what their rights are, to obtain expert evidence to prove the disrepair, and to actually get the money that they are owed, or get an order to make a landlord put their property in repair.

As a result tenants are driven to under-funded and over-pressed local authorities who, the RLA claims, only respond to around half the complaints about property standards made to them.

The RLA says it wants a new, properly funded, housing specialist court modeled on the existing Residential Property Tribunal.

This would have its own experts within the tribunal, removing the need for parties to hire external experts. It would also, again like the current tribunal, visit properties itself in order to assess their condition, minimising the need for witness statements and arguments over the state of a property.

This specialist court could deal with cases on paper where appropriate and also direct parties to mediation to settle their disputes quickly where possible. It would be able to use its specialist knowledge of property and of the law to decide matters without the need for expensive lawyers and long arguments.

This would reduce costs for landlords and tenants, provide better access to justice, and reduce the cost of the process for the parties and for the government, the association claims.

“We know this model works. Scotland has been using a similar specialist tribunal successfully for some time for housing disrepair matters and has now expanded it to cover possession matters as well. Ireland also has a successful specialist housing disrepair tribunal” says a statement on the association’s website.

“We have invested a great deal into the existing Residential Property Tribunal structure but continually limit its operations to matters involving HMO licensing.

The RLA is calling for that tribunal to be able to do much more and to use its substantial expertise to benefit the PRS across a wider range of issues.”


Tuesday, 23 May 2017

Number of UK landlords who believe tax change will affect them rises

More landlords than previously thought now believe that they could be pushed into a higher tax bracket due to changes to mortgage tax relief which is being phased out in the UK.

Some 16% think they will pay more tax, an increase of 7% compared to the fourth quarter of 2016, according to the latest research from the National Landlords Association (NLA).

By the time the changes are fully implemented in 2021 landlords’ mortgage finance costs will count towards their taxable profit. The current average annual mortgage finance costs for a single property landlord is £5,600.

The NLA says that this means that those currently earning just below the upper limit of the basic income tax threshold of £43,500 could be pushed into the higher bracket of 40%, and therefore exposed to significantly more tax liabilities.

Individuals who only let out a single property are by far the most prevalent type of landlord, representing approximately 62% of the UK’s landlord population, around 1.5 million.

The NLA believes that as landlords may end up selling rather than continuing for financial reasons, this could affect 368,000 homes, with young couples and families potentially at the greatest risk if landlords sell.

The NLA also says that any single property landlords forced up a tax bracket would need to increase the rent by more than 11% in order to continue to make a steady yield from the property, which equates to as much as £116 per calendar month more for the average rental property.

‘Single property landlords are responsible for providing a huge proportion of the UK’s private rented homes, and these findings show that, slowly, more and more are waking up to the fact their tax bills could be significantly higher in the coming years,’ said Richard Lambert, NLA chief executive officer.

He explained that 21% of landlords with just one property do not make a profit, and over the next few years those bumped up a tax bracket will find that their ability to continue to provide good quality housing will be seriously affected.

‘More and more families and young couples are making their home in the private rented sector because they cannot either access social housing or afford to buy their own home. Affected landlords will have the choice of either increasing rents or selling up, so either way it’s the people they currently home who look likely to suffer the most as a result of this damaging tax change,’ Lambert added.


TPO appoints new council chair

By Marc Da Silva

When a tenant paid his initial one month’s rent in addition to a tenancy deposit in exchange for the keys to his new rental property last year, he did not expect a few weeks after moving into the flat to be contacted by the landlord wanting to know where his money was.

When it materialised that the letting agent had had not passed on his deposit or initial rent payment to the landlord, the tenant issued a worthwhile compliant to The Property Ombudsman (TPO) which was upheld by the Ombudsman, who ordered the letting agency to pay the money owed to the landlord totalling more than £4,000, together with £250 compensation to the tenant.

But to make matters worse, the London-based company failed to pay the award, despite the fact that TPO members are required to comply with any award and direction given by the Property Ombudsman and accepted by the complainants.

Failure to pay the fine subsequently resulted in the agency’s expulsion from the residential agency ombudsman, which means that the company in question cannot legally trade as a letting agency, because as many of you will undoubtedly know, it is mandatory that all letting agents and property management agents register with one of three government-approved redress schemes, none of which will allow previously expelled agents to join.

Although in most cases disputes are resolved without a formal referral, these government approved schemes, run by The Property Ombudsman (TPO), Ombudsman Services Property and the Property Redress Scheme (PRS), provide fair and reasonable resolutions to disagreements between members of the public, including buy-to-let landlords, and property agents, ensuring that tenants and landlords have a straightforward option to hold their agents to account when required.

To help strengthen its offering, TPO has appointed Baroness Warwick, the current chair of the National Housing Federation, as the scheme’s new council chair, after Lord Best officially stepped down from the role after his eight-year term came to an end.

Baroness Diana Warwick (pictured beside) said: “I am delighted to succeed Lord Best in this important role and hope that the qualities and skills I bring will help to reinforce the commitment to high standards that he has fostered.

“I share the Property Ombudsman Scheme's values of independence and public service and strongly support its purpose in providing free, fair and impartial service to buyers, sellers, tenants and landlords of property in the UK.”

Reflecting on the appointment, the Property Ombudsman, Katrine Sporle, said: “I look forward to working closely with Diana who has spent many years helping the government make and shape laws, and debate public policy matters."

"She will be a great asset to TPO which aims to raise standards in the industry and protect consumers from unfair practices.”


Friday, 19 May 2017

ARLA Propertymark backs holding deposits to stop ‘time-wasting tenants’

By Marc Shoffman

CREDIT: http://www.house-saver.co.uk/LiveEditor/images/moneyIntoHouse.jpg

A holding deposit capped at two weeks’ rent would help ease the burden on agents of tenants shopping around for multiple properties, ARLA Propertymark claims.

The trade body says there is a concern that the lettings fee ban will result in tenants shopping around with “impunity”, potentially wasting agency time and resources, but David Cox, chief executive of ARLA Propertymark has expressed hope that the Government will avoid this by allowing holding deposits.

He said: “The letting agent fees ban introduced in Scotland in 2012 resulted in tenants putting offers on multiple properties, creating significant additional work for both letting agents and landlords.

“The Department for Communities and Local Government has recognised this burden and therefore in the consultation they propose that agents will be allowed to take holding deposits from tenants which will be refunded to successful applicants and forfeited if tenants withdraw.

“This should overcome the issue of tenants putting down offers on multiple properties with impunity.

“The consultation asks what limits should be imposed on holding deposits and we believe they should be capped at two weeks as that figure will act a deterrent to such action by tenants while still being affordable.”


Letting agents warned: 'Ensure eviction notices are correctly served'

By Graham Norwood

Agents are being warned to ensure they serve eviction notices correctly as the ‘peak eviction’ summer period arrives.

Specialist tenant referencing service Rent4sure says particular attention should be paid to Section 8 and Section 21 notices, which are two of the most frequent and complicated.

A Section 8 notice can be served for a breach of an Assured Shorthold Tenancy agreement and is most commonly used to tackle rent arrears.

“A landlord or their agent should serve a Section 8 notice under grounds 8, 10 and 11 as soon as the tenant defaults on two months of rent arrears,” explains Luke Burton, Rent4sure’s sales and marketing director.

“This differs slightly when the rent is paid weekly, or quarterly and in some instances, you may have to wait for a further period before serving a Section 8 notice under the mandatory ground 8.”

He says that if rent is paid weekly or fortnightly, eight weeks’ rent must be due before a Section 8 notice can be served.

For quarterly rent payments, at least one quarter’s worth of rent must be at least three months in arrears.

“If the rent is paid yearly, at least three months’ rent must be three months in arrears” adds Burton.

A Section 21 notice, meanwhile, should only be served at the end of a fixed term or in line with an agreed break clause within the tenancy agreement. A Section 21 should be served giving the tenant two months’ notice.

“However, if the tenancy commenced prior to October 1 2015 and no new term has been entered into post that date, notice can be served at any time,” says Burton.

He explains that if the tenancy commenced after October 1 2015, agents are not permitted to serve a Section 21 notice until after the first four months of the tenancy have lapsed.

A new government Form 6A – which is only valid for six months from the date of issue - must be used for all tenancies commencing after this date including any renewals.

Rent4sure says it is good practice to serve these notices towards the end of the term to ensure that if possession proceedings become necessary, the notice is still valid.

In the instance that a tenancy began before October 2015 but a renewal has been granted since that date, the Form 6A must still be used.

The rule which states Section 21 notices cannot be served for the first four months of the tenancy only applies from the date of the first agreement.

“However, these will also only be valid for a period of six months from the date they are issued on the tenant,” explains Burton.

“Therefore, it would be good practice to diarise to serve these a few months before the end of the term to ensure the notice remains valid if the tenant fails to vacate and proceedings do become necessary.”


Thursday, 18 May 2017

Where to buy in Hertfordshire:four villages for London commuters, with good schools and 30-minute journeys to the capital

By Ruth Bloomfield
Great transport links, grammar schools and good-value family homes make Hertfordshire a sound lifestyle investment.

The top-performing towns and villages in the lovely county of Hertfordshire share one huge advantage — great transport links. A new study today finds the areas that have seen the greatest price growth over the past five years are those where the commute into London is half an hour — or even less.

The research by Savills analysed the property price performance of every Herts town and village within a maximum 65 minutes’ travelling time of central London, and found many journeys shorter than travelling in from Zones 3 and 4. Leading the pack is Chorleywood, a slightly suburban sort of village just beyond the M25, at the tip of the Chiltern Hills.


Average home prices in Chorleywood have increased by 53 per cent in the last five years to £749,806. The village is just on the Tube network, with rush-hour Metropolitan line trains to Marylebone taking 31 minutes. An annual travel card costs £2,616 — comparatively modest by commuter standards. There are several good primary schools, along with the Ofsted “outstanding” St Clement Danes School for seniors.

Adam Salem, manager of Hetheringtons estate agents, says Chorleywood is not a chocolate-box village, “but it does have a real sense of community. People get involved in the schools, in the summer fête. And the country pubs are lovely. The Gate is the locals’ favourite.”

Buyers should expect to pay from £900,000 for a four-bedroom post-war house, or about £550,000 for a two-bedroom Victorian cottage, Salem says. “We have just sold to a family who got £700,000 for their London flat and were able to buy a big a four-bedroom house at just over £1 million.”


The market town of Tring is another strong performer. Average property prices have expanded 52 per cent in the last five years, to £481,851. Trains from Tring to Euston take 37 minutes, and an average season ticket costs £4,060.

£600,000: a four-bedroom cottage in Henry Street, Tring, with a private rear garden. Brown & Merry (01442 738 033)/
This affluent town has a predictably strong crop of primary schools and popular Tring School, for seniors. Parents with brainy offspring are within catchment for the grammar schools of Aylesbury, and would-be stars of stage and screen could audition for the independent Tring Park School for the Performing Arts.

Caroline Murgatroyd, director of Hunters estate agents, says families can enjoy the many lovely acres of the National Trust-run Ashridge Estate, teeming with bluebells at this time of year. She finds the typical Londoners arriving in the town are “couples with kids about to start school” who often lived in north London. “Tring is like a mini Crouch End,” she explains.

They could buy a four-bedroom detached house from about £600,000 or a period Victorian villa of a similar size for between £750,000 and £800,000.


Just south of Hatfield, Welham Green has equalled Tring’s price performance, with prices also up 52 per cent to an average £325,937. Its nearest primary school is North Mymms which “needs improvement”. There are other options in neighbouring Brookmans Park, while Hatfield is a good choice for senior school pupils. Trains to King’s Cross take 37 minutes, and an annual season ticket is £2,368.

£650,000: a three-bedroom cottage in Walton Street, St Albans, part of the Bernard's Heath conservation area, Hamptons (01727 629 096).

Perhaps Hertfordshire’s best-known commuter destination, St Albans has also performed well with price rises of 49 per cent to an average £565,239. This lovely cathedral city, with its boutiques, restaurants and bars, great schools and buzzing town centre, is ever-popular thanks to its 19-minute rush-hour commute to St Pancras International. Season tickets are priced from £3,380.


The Landlord Law Conference takes place tomorrow

By Marc Da Silva

Despite recent tax changes, buy-to-let property remains an attractive investment at a time of low interest rates and volatile stock markets, but some investors fail to recognise that becoming a landlord comes with added responsibilities, which are constantly changing.

Failure to comply with the rules can result in prosecutions, fines and the inability to evict non paying tenants, and that is where the Landlord Law Conference could potentially help you.

The conference, which will take place at the Sprowston Manor Hotel on the outskirts of Norwich tomorrow, will feature a number of legal talks from specialist lawyers and trainers, as well as an exhibitors area, with specialist companies there to talk to and advise you, including Anthony Gold solicitors, the Property Redress Scheme, Aston Shaw Accountants and the Residential Landlords Association, among others.

The day should prove to be a good opportunity to network with other buy-to-let landlords and property professionals.

To attend the event, you will have to buy a ticket, at a cost of £204. To do so, click here.


Wednesday, 17 May 2017

Spring selling season fails to materialise as house price growth stalls

By Isabelle Fraser

The annual rate of growth was 4.1pc in March, down 1.5pc from February CREDIT: PA

House prices slowed in March, according to official figures, as an increasing squeeze on consumers weighs on housing market activity.

The annual rate of growth was 4.1pc, down from 5.6pc in February, as the market stagnates due to a lack of supply.

Between those two months, the average house price across the country fell 0.6pc; this slump affected everywhere in the country except Wales and the West Midlands. In London, house prices fell 1.5pc in March alone.

House price growth around the country

Howard Archer at IHS Markit said that it added "to a mounting collection of weaker data and surveys which point to the housing market being increasingly affected by the deepening squeeze on consumers and their concerns over the outlook".

He said that these pressures would continue to intensify over the coming months and forecast house price will rise by just 2pc in 2017. Mr Archer added: "There is a very real and mounting possibility that it could come in lower than that."

The Royal Institution of Chartered Surveyors found that in March the market was "subdued", and the traditionally strong spring selling season faltered as new buyer enquiries and agreed sales remained broadly unchanged since the start of the year.

It comes as the Bank of England reported that mortgage approvals for house purchases dipped to a six-month low in March. The average price of a home in the UK is now £215,848.

Jonathan Hopper, managing director of Garrington Property Finders, said: “These official figures suggest the slowdown is sharper and started earlier than first thought.

“April’s surprise election announcement applied a dab to the property market's brakes, but this data confirms it had already dropped down a gear in March.

“While the speed and severity of the fall in annual price growth – down to its lowest level for more than three years – will alarm some sellers, such national averages mask the wildly different conditions at opposite ends of the market."


Sales volumes hit four-year low, as regional transactions plummet by up to 26% in England

By Marc Shoffman


Sales volumes declined across all regions of England at the start of the year, the latest official figures suggest.

Data for transactions in January – the latest month for which transactional data is available and revealed in the ONS and Land Registry House Price Index – show sales volumes down by up to a quarter across English regions.

The figures show that volumes fell by the most in London, down 26% year-on-year to 5,958, followed by the east of England and south-east which both saw 21% declines.

The north-east had the smallest drop, down just 8% on January 2016.

Overall, transactions fell 16.6% annually in January to 50,790 in England.

They were down 2% in Scotland to 6,239 and down 2.3% in Wales to 2,762.

Northern Ireland only provides quarterly data, but transactions were down 28.5% in the first three months of the year to 4,379.

Transactions across the UK were at 64,170 in January. This is down from 75,961 last year.

Of course this could all be clouded by last year’s Stamp Duty rush, but the numbers are also below a month before when sales volumes were at 82,351.

Even if you look further back to January 2015, the Land Registry recorded 71,703 transactions and 80,763 in January 2014.

You have to go back to January 2013 for when volumes were last lower for the month, at 52,550.

The data also shows that annual house price growth slowed to 4.1% in March, down from 5.6% in the year to February. Prices also fell 0.6% on a monthly basis to £215,848.

Commenting on the figures, Jonathan Hopper, managing director of Garrington Property Finders, said: “While the speed and severity of the fall in annual price growth – down to its lowest level for more than three years – will alarm some sellers, such national averages mask the wildly different conditions at opposite ends of the market.

“Properties in some regions continue to see double-digit price reductions, while at certain price points in the most in-demand areas, gazumping is back with a vengeance.

“Nevertheless the broader trend is undeniable. East Anglia’s gravity defying, double-digit rates of price inflation are a thing of the past and it has been forced to share its ‘fastest growing region’ crown with the east midlands.

“Even London finds itself in a position it is unaccustomed to – close to the bottom of the pile.

“The chronic shortage of supply is still propping up prices in many areas and mitigating the slowdown. But this snapshot of a slowing market – taken before the election announcement – confirms what many in the industry had feared. For the housing market, the snap election has come at just the wrong time – injecting an unwelcome dose of uncertainty into an already fragile market.

“Nevertheless the lull could be short-lived. If the election delivers a clear result that puts Brexit firmly back on track, the property market could receive a huge boost, freeing up more supply and with greater levels of clarity spurring discretionary buyers into action.”


Tuesday, 16 May 2017

Letting agents and landlords could be operating illegally after law change

By Conor Shilling

Agents and landlords with properties in Wales have been reminded they could be breaking the law if they're not signed up to the Rent Smart Wales scheme.

Enforcement powers for the licensing scheme - which was introduced in 2016 - are now active, meaning non-compliant agents and landlords could be prosecuted.

Those operating in the Welsh private rented sector are required to register with the Rent Smart Wales scheme. On top of this, self-managing landlords and agents are required to obtain a licence, complete a training course and pass a 'fit and proper' persons test.

Sanctions for non-compliance include prosecution, fixed penalty notices, rent repayment orders and the inability to serve a valid Section 21 eviction notice.

The licensing scheme has now added a searchable register to its website, and is encouraging tenants and the wider public to check whether landlords and agents are registered.

Registration can be completed online and a Rent Smart Wales licence and registration lasts for five years.

“I would urge any landlords or agents with properties in Wales and who have not yet registered or become licensed, to contact us immediately to avoid legal action," says Bethan Jones, operational manager of Rent Smart Wales.

"We are still keen to assist those who willingly want to comply."

She says that she is still of the firm belief that the licensing scheme will improve the PRS for agents, landlords and tenants.

The scheme has not been without its controversy and it was estimated in November that only around 65% of landlords and agents working in Wales had met the deadline for licence registrations.


UK home lenders urged to use digital process to speed up mortgage applications

Home lenders in the UK are being urged to move into the 21st century and end the practice of insisting on original copies of bills and statements and instead accept digital versions.

The current mortgage application process is described as old fashioned and outdated as well as being a barrier to people getting on the property ladder.

Those applying for a mortgage needs to provide proof of identity in the form of bank statements and utility bills but research has found that the majority now use paperless accounts, especially younger people buying their first home.

Some 69% of consumers receive paperless bank statements while 46% receive paperless credit card statements, according to the research from data intelligence specialists GBG .

The younger generation are most likely to opt in for paperless bank statements, with 75% of 18 to 24 year olds saying they receive digital versions of their bank statements, compared to 59% of those aged over 55 years old.

The research also found that 42% of UK consumers do not hold paper copies of their utilities bills for their current address, with 33% signing up to paperless utility bill statements which they receive via email or access online.

The firm believes that if an individual does not have suitable documentation to prove their identity, an application can be significantly delayed as they wait for paper copies from their bank or utility company. Such delays in mortgage applications can consequently result in frustration, or even a property purchase falling through where the seller loses patience. What’s more, if an individual cannot obtain the original documents, a lender may well turn the application down.

‘As incidents of fraud continue to rise, the pressure for banks and lenders to prove someone’s identity has never been more critical. These paper first procedures had to be put in place to sort the good from the bad. However, it’s clear these old-fashioned measures haven’t caught up with what’s actually happening in the real world,’ said Nick Brown, group managing director at GBG .

‘And as more customers opt to receive paperless statements and access their documents online, these traditional processes could hinder a legitimate individual’s chance of getting on the property ladder,’ he added.

Those who move home several times can also find it hard to get a successful mortgage application if a lender wants proof of address for previous properties as the research also found that 45% have moved address once or twice times in the last three years and 34% do not hold proof of address documents such as utility bills or council tax statements for each of their previous addresses.

Those aged between 18 and 24 were most likely to move frequently, often as a result of moving from their family home, to student accommodation, to their first home as a graduate and 18% has moved three to four times in the last three years and 70% moved at least once.

Yet 39% do not hold proof of address documents for each of their previous addresses. Failing to provide this documentation could, again, result in an application being turned down by a lender.

The research also asked home owners about their mortgage application experience and 36% found it stressful while 33% said it was a complicated process and 27% found it too long and drawn out. The research also revealed that it took the average UK home owner just over three hours to source all the paper documentation required for their application.

One recent buyer described the mortgage application process as archaic. ‘I have paperless billing with my bank and utility providers, so getting paper copies of bills to prove my identity and address was a massive hassle and took a lot of time,’ said Juliette Keyte of South East London.

‘Buying a house was a hugely stressful experience, and having to prove who I was umpteen times to various different parties exacerbated that. I’m surprised the process hasn’t changed to meet the needs of the modern home buyer,’ she added.

These long, complicated processes are impacting the number of successful mortgage applications. Just last month, it was reported that mortgage approvals by banks had fallen to the lowest figure since November 2016. Furthermore, the average time taken to secure a loan has risen from around 37 days to 53 days as applicants undergo greater questioning on their income, affordability as well as thorough identity checks.

‘In this digital age, processes should be becoming simpler rather than more complex. Today, we can verify the identity of over four billion people in the world in a matter of seconds, so why should people have to face weeks or months of form frustrations to try and get the service they require?’ Brown pointed out.

‘As the world continues to digitise, banks and lenders need to bring processes into the 21st century and keep up with consumers’ expectations. The digital age creates the need to allow legitimate customers to on-board with ease and speed, whilst stopping fraudsters. Using identity data intelligently allows businesses to make better decisions quicker, and ultimately make processes slicker and more accurate,’ he added.


Monday, 15 May 2017

Foxtons meets to put its house in order

By Simon Goodley

The swish estate agency has a list of tricky issues to negotiate at its annual meeting - not least its falling share price. Oh, and a stagnant property market
Foxtons: 400 followers on Twitter. Photograph: Dominic Lipinski/PA
Social media frequently appears to be a modern popularity contest, but at least that gives us an indication of the reputations of some of our best-known companies.

Take the official Twitter account of the irksome estate agency Foxtons, for instance, which possesses a mighty 400 followers and drones on about the major housing topics de nos jours, such as: “Do you know what it takes to be a landlord?” (we might venture a guess).

By comparison, the @AvoidFoxtons account is proving far more popular, but the estate agent will get a chance to get its official message across this week, when it holds its annual meeting.

Still, the gathering comes as other irritating hecklers are also shouting from the sidelines. The company’s shares have lost about 30% of their value in the past 12 months, while fresh news from the Royal Institution of Chartered Surveyors (Rics) last week suggested that the UK housing market is continuing to slow down, with falling property sales and “stagnant” buyer demand contributing to one of the most downbeat reports since the financial crash. Oh – and obviously there is also the chance of a row with shareholders over executive pay.

So will anybody take any notice of Foxtons’s excuses for its list of current challenges? Possibly – although sympathisers may be less numerous than its collection of Twitter followers.

Package of trouble at Royal Mail

This week, Royal Mail Group is promising to hold its annual general meeting – although we’d all be wise to wait and see if it follows through with that pledge. The company is fast developing a reputation for not always sticking exactly to its word.

You will recall how there is currently an almighty row between the company and some staff about efforts to wriggle out of a defined benefit pension scheme – which pays out to employees based on years of service with either a career average or final salary.

They are nice pensions to have, but are now supposedly unaffordable, unless, as one City wag puts it, scores of workers do the collegiate thing and die more quickly. All of which explains why Royal Mail stopped new staff joining the scheme nine years ago.

Anyway, the company is now trying to cut the benefits to its employees who were already enrolled in the scheme, hence the threat of industrial action.

As any A-level business student will tell you, pensions are wages deferred and if Royal Mail does not deliver, it’s conceptually no different from cutting salaries. Expect that point to be made at this week’s AGM – assuming Royal Mail doesn’t try to sidestep that too.

Black horse rides off to private sector

Just as the concept of state-owned industries is thrust back into the news agenda with the drafting of the Labour manifesto, there comes a potentially symbolic moment when the UK government finally withdraws from one of its most infamous investments.

The government’s investment holding company, UKFI, has been selling down its once-43% stake in Lloyds Banking Group for months. We have now got to the point where, we are so insignificant on the share register that dashing boss António Horta-Osório might treat us as he does members of the paparazzi while on a foreign business trip – and not even notice we’re hanging around.

Anyway, this week is expected to be the moment when our now 0.25% holding finally goes to zero, so expect crowing by the Conservative party about how Lloyds has been nursed back into the private sector on its watch (and, possibly, Horta-Osório saying he’s off).

Apparently we have all made around £500m out of owning a stake in the bank – which sounds quite good, although that might be misleading.

Last week the Financial Times worked out that if we had we stuck our £20.3bn stake into Lloyds’ highest-paying instant access account, we’d have scooped £2.9bn in interest.


NLA announces launch of new training courses for members

By Marc Da Silva

The National Landlords Association (NLA) has announced that it is launching two new training courses for its members next month.

The ‘Planning a Successful Investment’ course is aimed at individuals who are contemplating becoming a landlord and established landlords looking to expand their property portfolios, while the ‘Specialist Landlord Taxation’ course is aimed at landlords who want to learn more about property taxation with a view of putting a long-term plan into place.

Planning a Successful Investment

The one day course will provide landlords who are members of the NLA with an overview of all the key considerations in terms of investing in the buy-to-let sector, as well as a solid understanding of the purchasing process, top tips and hints for researching properties to purchase, guidance and advice on how to expand or improve existing portfolios, along with strategies and options to get the best out of investments, including renovating existing properties.

The course content includes finding the right property, the process of buying a property, how to undertake renovations and manage plans and contractors, how to market and prepare a property for tenants, the pros and cons of using an agent, how to find the right finance and mortgages, business planning and exit strategies,

Specialist Landlord Taxation

This one day course is aimed at landlords who want to learn more about property taxation with a view of putting a long-term plan into place.

The course will provide landlords with an overview of the tax regime and the general principles of property taxation, guidance on understanding and clarifying future tax liabilities, the various options available to reduce ongoing and potential tax bills, as well as the confidence and support in running more tax-efficient property portfolios.

The course content includes an introduction and overview of the tax regime, the different property taxes, including capital gains tax, corporation tax and inheritance tax, the implications of Section24 of the Finance Act and recent changes to buy-to-let taxation, gifting and potentially exempt transfer, the benefits of incorporating or holding properties as a company, along with self-assessment and tax returns, including recent changes to digital tax.


Friday, 12 May 2017

Tenant happiness on the rise as more opt to rent long-term

By Conor Shilling

A study of over 3,000 tenants has found that an increasing number of renters are 'very happy' with their living situation.

LSL Corporate Client Department's 2017 Tenant Survey found that 32% of renters claim to be 'very happy', up from 28% last year.

A further 37% indicated that they are 'happy', increasing marginally from 36% in 2016.

Just 4% of tenants said they were 'very unhappy', down from 6%, while 7% said they were 'unhappy', down from 9%.

LSL says the increased satisfaction among tenants is due to a reduction in frustrations with maintenance, fees and restrictions.

The report also highlights growth in the long-term rental market with 33% of tenants having rented for six years or longer, up from 29% in 2016.

The study splits renters into four groups: Younger Independents, Struggling Savers, Moving Up and Reconciled with Renting.

The Struggling Savers and Moving Up groups are most likely to be renting due to a lack of deposit or difficulty getting a mortgage and so are less inclined to see renting as a lifestyle choice.

The other two groups - Young Independents and Reconciled with Renting - are on the other hand more likely to appreciate the flexibility that renting offers.

The condition of the rental property and value for money were the two most important dealbreakers for the tenants surveyed.

These were followed by good communications with landlords and letting agents and the overall quality of the landlord.

Meanwhile, 28% of tenants said they'd pay more to be allowed to keep pets and 21% said they'd pay more for high speed internet.

The majority of the tenants surveyed rent unfurnished accommodation, 56% are aged under 35 and 41% have children.

"The results show that the vast majority of the sector’s customers are happy, but there is no room for complacency," says Ian Fletcher, director of policy (Real Estate) at the British Property Federation.

"The rental sector’s customer base is changing, for example with far more families, and what customers want is changing too."

"The private rented sector can’t divorce itself from these wider social, economic and technological changes and the impact that is having on how people want to lead their lives," he adds.


Buy-to-let landlords contribute £15.9bn a year to UK economy, study finds

By Marc Da Silva

Buy-to-let landlords currently contribute £15.9bn per year to the British economy through pre-tax spending on running their portfolios, which is more than double the estimated £7.1bn in 2007, owing to the rapid growth of the private rented sector and rising cost of acquiring property, according to a new report from Kent Reliance.

But as their tax burden increases, more than a third - 36% - of landlords surveyed by BDRC Continental on behalf of Kent Reliance are looking to cut their annual spending, a move that could reduce overall spending by more than £500m in total, which would hit the tradesmen and professionals that support the buy-to-let industry, the study by the specialist mortgage lender, which forms part of OneSavings Bank plc., shows.

Property upkeep and maintenance was the most popular area identified by 17% of landlords for potential cost cutting, followed by letting agent fees and mortgage costs - both 10%.

Those landlords anticipate they will reduce spending on letting agent fees by 28%, property maintenance and servicing by 21% and mortgage costs by 15%.

The new ‘Tracking landlords’ costs and economic contributions’ report, part of the lender’s ‘Buy to Let Britain’ research series, states that spending per property stands at £3,632 before tax or mortgage interest - a third of rental income - with the cost of property upkeep, maintenance, and servicing the largest outlay at a combined £5.5bn.

Landlords typically spend £2bn in service charges and ground rent, £963m on insurance, £904m on utilities, and a further £1.1bn on other associated costs of letting a property.

Spending on letting agents’ fees totals £4.7bn each year, with £644m spent on legal and accountancy fees, and £218m on administration costs. Altogether, landlords provide £5.5bn of revenue for these sectors.

John Eastgate, sales and marketing director of OneSavings Bank, commented: “Landlords may seem like an easy target for political point scoring, but they play a vital role in the economy. Not only do they house a huge proportion of the country’s workforce, bridging the housing demand and supply gap, their spending supports thousands of jobs - whether builders, cleaners, lawyers and accountants or letting agents.

“Trying to tackle the housing crisis by targeting landlords with punitive taxes is very simple and politically highly palatable, but has unintended consequences. Either it means less work for all those who support the property industry, or it means tenants will have to foot the bill for the government's tax raid, or both.

“One side effect of the recent changes, and rising running costs, will be the professionalisation of the sector as amateur and accidental landlords leave the market. There is nothing wrong with having fewer, bigger landlords, but that alone will not help more young people get homes.”


Thursday, 11 May 2017

Demand from buyers in UK falls in first few months of 2017

Property demand across the UK has fallen since the start of the year with Wales seeing less interest than the rest of the country, the latest analysis shows.

Demand from buyers is currently 33.8%, down by 17.56% since the end of 2016. It has reached 39.4% in England, 36.18% in Scotland and 27.35% in Wales, according to the national hotspots index report from eMoov.

The index, which measures demand in 150 towns and cities, shows that the highest levels of buyer demand is 68.29% in Rugby, followed by Portsmouth at 66.7% and Bristol at 64.43%, while the lowest is in Aberdeen at 14.11%, Hartlepool at 15.43% and Middlesbrough at 19.15%.

Stoke-on-Trent at 82.25%, Stockton-On-Tees at 77.75% and Walsall at 65.09% have all seen the largest increases in buyer demand in 2017 so far.

But demand has been falling on London commuter towns and cities including Guildford down 35.84%, Watford down 35.73%, Cambridge down 29.74%, Reading down 27.17% and Brentwood down 26.93%.

‘With many of the UK’s major cities becoming too expensive for homeowners in the region and travel infrastructure improvements allowing us to live further away from work, it is no surprise that places such as Rugby and Portsmouth have grown in prominence amongst UK buyers. It isn’t just those in London that are looking outside of the larger city boundaries and opting for more affordable towns in the surrounding area,’ said eMoov chief executive officer Russell Quirk.

He pointed out that at 32.31%, buyer demand across London is down 5%. The borough of Bexley has the most demand at 56.13%, followed by Newham at 51.82% and Havering at 50.51%. The biggest decreases were in the boroughs of Greenwich which was down 60.83%, Lambeth down 57.62% and Hounslow down 52.69%.

Westminster has the lowest level of London buyer demand at 10.14%, followed by Kensington and Chelsea at 11.49% and Hammersmith and Fulham at 13.15%. Since the end of 2016 demand has fallen in all three of these boroughs by 36.64%, 28.16% and 40.24% respectively.

Across Scotland the highest levels of current buyer demand are in South Ayrshire at 67.18%, Edinburgh at 56.47% and Glasgow at 56.42% while the biggest increases in demand are in Highland with a rise of 66.59%, South Lanarkshire up 47.69 and Fife up 40.47%.

Although demand is still low in Aberdeenshire, the area has seen an increase of 21.46% since the end of 2016. While the biggest declines in buyer demand since 2016 are Moray with a fall of 22.54%, Argyle and Bute down 14.2%) and Stirling down 6.33%.

In Wales Caerphilly at 47.12%, Newport at 46.92% and Cardiff at 42.89% rank as the top three hottest areas for property demand at present. But Cardiff’s popularity amongst Welsh buyers means the capital has seen some of the lowest upward growth in buyer demand, having increased by just 4.15% so far in 2017, whilst Rhondda Cynon Taf is up 31.57% and Swansea up 28.29%, the largest increases in buyer demand this year.

The Ceredigion, Pembrokeshire and Denbighshire regions have the lowest demand in Wales at 15.75%, 15.54% and 13.36% respectively while the biggest falls in demand in Wales are Bridgend down 13.47%, Monmouthshire down 9.63% and Neath Port Talbot down 3.22%.