Signup to the SWLA
For more information and to respond to the consultation please see the gov.uk website;
Council tax valuation of Houses in Multiple Occupation (HMOs): consultation – GOV.UK (www.gov.uk)
Consultation closes 31 March 2023
All information from Reforming the Private Rented Sector – Levelling Up, Housing and Communities Committee (parliament.uk)
The White Paper, A Fairer Private Rented Sector, published in June 2022, sets out what the Government calls its long-term vision for the PRS. The proposals are to be implemented this Parliament through a renters reform Bill and are primarily a response to concerns about security of tenure and housing quality. The first concern is that section 21 of the Housing Act 1988, which allows landlords to quickly evict tenants without having to give a reason, leaves tenants vulnerable to “no fault” eviction and so afraid to complain to their landlord. The second concern is about the condition of private rented accommodation, which is more likely to be non-decent than homes in other tenures and to contain hazards that pose an immediate threat to health and safety.
In response to the first concern, the Government says it will repeal section 21 and replace fixed-term tenancies with a system of open-ended (periodic) tenancies. We conclude that the abolition of fixed-term tenancies, combined with the repeal of section 21, would undoubtedly give tenants greater security of tenure, and we therefore welcome the proposals. The one exception is the general student PRS market. Currently, the proposal is to include this part of the PRS in the tenancy reforms, but we conclude that abolishing fixed-term contracts here could make letting to students considerably less attractive to private landlords, as the student market mirrors the academic year and benefits greatly from 12-month fixed tenancies. We agree with the evidence that not exempting the student PRS could push up rents or reduce the availability of student rental properties, at a time when the market in many university towns and cities is already very tight. We therefore recommend that the Government retain fixed-term contracts in the student PRS.
On the repeal of section 21, we believe that most private landlords are responsible and have no desire or financial incentive to evict tenants without good reason, and that for these landlords section 21 feels like an indispensable means of evicting bad tenants, but we also believe that the blight of unfair eviction and insecurity of tenure experienced by too many tenants can only be remedied by its repeal.
The repeal of section 21 will leave landlords reliant on section 8 of the 1988 Act, which requires a court hearing, and the grounds for possession set out in Schedule 2. The Government says it will amend the section 8 regime to compensate for the loss of section 21. In particular, it plans to:
We conclude that the proposed sales and occupation grounds could be too easily exploited by bad landlords and become a backdoor to “no fault” evictions, and we therefore recommend that the Government:
Landlords are perhaps most concerned about the capacity of the courts to expedite possession claims, particularly in respect of rent arrears and antisocial behaviour, and this is one of our greatest concerns too. The courts system is already struggling to process housing cases quickly enough. The pressures on the courts will be exacerbated by the repeal of section 21, as landlords will seek to regain possession under section 8, especially in the case of rent arrears and antisocial behaviour. As we have concluded before, the best way to improve the housing court system is to establish a specialist housing court, but the Government has rejected this idea, for reasons we find unsatisfactory. Furthermore, in relation to in-tenancy rent increases, the Government proposes that it will remove the power of the First-tier Property Tribunal to increase rents. If this proposal has the desired effect of giving tenants greater confidence to challenge rent increases, it ought to result in a heavier workload for the tribunal. However this is already a time-consuming and resource-intensive process. Both these proposals present a real risk that the current systems will be overwhelmed, and there will be a logjam with lengthy delays before verdicts are reached.
It is not clear whether the Government fully appreciates the extent to which an unreformed courts system could undermine its tenancy reforms. For this reason, we again recommend that the Government introduce a specialist housing court. Whatever it does, however, the Government must:
In response to the concerns about housing conditions in the PRS, the Government says it will:
We support the introduction of a legally binding DHS, given the high rate of non-decency in the PRS, and the property portal. The cost to landlords of meeting the new standard could, in some instances, become an obstacle to compliance, but we do not think this point should be overstated. This is partly because the Government has proposed a £10,000 cap on costs resulting from improvement works in relation to three of the four criteria (B, C and D), meaning a property would be considered compliant with those criteria once the cap has been reached. We conclude, however, that for criterion D, on energy efficiency, this cap should not mean some properties get neglected, given the very strong correlation between energy efficiency and levels of damp and mould. We therefore call on the Government to come up with financing solutions where the necessary energy efficiency works would exceed the cap. It should also align criterion D with the minimum energy efficiency standard.
The DHS will not help to raise standards in the PRS unless local authorities can enforce it vigorously, but at the moment levels of housing enforcement activity vary hugely between local authorities, with many local authorities opting for informal engagement with landlords rather than enforcement action. The precarious position of local government finances, the shortage of qualified housing and environmental health officers, and the lack of reliable data are all obstacles to effective enforcement. Since the Government is unlikely to make significant extra funding available for housing enforcement, given the current economic climate, the success of the regime will depend on whether it can become self-financing, and this depends on local authorities being confident of their ability to collect financial penalties imposed on landlords who breach standards. To this end, the Government should:
Currently, letting agents are required to belong to one of two government-approved ombudsman schemes, but membership for landlords is voluntary. The Government plans to introduce an ombudsman for all PRS landlords, regardless of whether they use an agent, and says a single scheme will mean a streamlined service for tenants and landlords and avoid the confusion and perverse incentives resulting from multiple schemes. We do not understand why the Government is not proposing to replace the existing letting agent schemes with a single ombudsman covering all letting agents and landlords. We therefore recommend that the Government introduce a single ombudsman for the whole of the private rented sector.
The most serious challenge currently facing many private renters is neither security of tenure nor housing conditions but the high cost of renting caused by the housing crisis. Many smaller landlords believe the White Paper proposals will aggravate the problem by driving them out of the PRS. For them, the proposals are an extension of other anti-landlord policies pursued by Governments since 2015 that have resulted in a significant reduction in the size of the PRS. We share some of the concerns expressed about the reduction in the size of the PRS, and we recommend that the Government review the impact of recent tax changes in the buy-to-let market with a view to making changes that make it more financially attractive to smaller landlords.
The White Paper does not include any proposals to address the underlying cause of the affordability crisis in the PRS, which is the decades-long failure of successive Governments to build enough homes. We accept that this was not the purpose of the White Paper, however, and that the Government is investing in house building. Nonetheless, there are questions about the housing sector’s ability to deliver the necessary number of new homes, particularly given the enormous financial pressures on housing associations and local housing authorities. The affordability crisis in the PRS, the source of many of the other problems in the sector, can only be properly solved by a significant increase in house building, particularly affordable housing. We therefore call on the Government to recommit to delivering the affordable homes the country needs, particularly the 90,000 social rent homes we have previously concluded are needed every year.
The full report can be read here; https://committees.parliament.uk/publications/33924/documents/185831/default/
On Monday 23rd January, the Fire Safety (England) Regulations 2022 will come into force.
Most of the rules cover high rise buildings, however regulations 9 & 10 will cover all buildings which contain two or more sets of domestic premises & all buildings
which contain common parts through which residents would need to evacuate in the case of an emergency. Therefore, in addition to buildings containing self-contained flats, these rules will also apply to properties with rooms let on individual tenancies in a shared house – i.e. HMOs.
If a property comprises of two maisonettes with front doors on the street and no communal area, these regulations will not apply.
Responsible persons will have to follow two key requirements –
All information from gov.uk.
These Regulations apply to all buildings in England that comprise two or more domestic premises (including the residential parts of mixed-use buildings) although there are more requirements depending on the height as explained in this guide. These buildings are, principally, blocks of flats (whether purpose-built or converted from another type of building, such as a house or office building), but also include blocks used for student accommodation.
The Regulations apply regardless of whether the flats are subject to a long (e.g. 99 years) lease or are rented, and regardless of whether the flats are used to accommodate the general public or a particular group of people (as in the case of, for example, sheltered housing for older people).
The Fire Safety (England) Regulations impose duties on you if you are the Responsible Person for any building which:
The Regulations apply to:
The Regulations do not apply within individual flats, other than in respect of measures installed within flats for the safety of other residents of the building (e.g. sprinklers, smoke detectors connected to a communal fire alarm system, etc).
Enforcement of the Regulations is the responsibility of the same enforcing authority as enforces the Regulatory Reform (Fire Safety) Order 2005. In the case of a block of flats, this is virtually always the local fire and rescue authority.
The sections that follow begin with requirements that apply to all residential buildings. There then follow requirements that apply only to buildings of greater than 11m in height. Finally, the guidance sets out requirements that apply only to high-rise residential buildings. The section headings make it clear whether the section applies to all residential buildings, only to buildings of greater than 11m in height, or only to high-rise residential buildings.
Because Grenfell Tower was a high-rise block, much of the focus of the recommendations of the Public Inquiry was concerned with measures to ensure the safety of residents in high-rise blocks of flats. However, the Government is determined to ensure that residents of all residential buildings are as safe as possible from fire and that they feel safe from fire.
For the purpose of the Regulations, a residential building is to be considered as high-rise if either of the following circumstances apply:
A mezzanine floor is to be treated as a storey if its floor area is at least 50% of the floor area of the largest storey in the building which is not below ground level.
It is the Fire Safety Order that defines the meaning of Responsible Person in the context of both the Order and the Fire Safety (England) Regulations.
As the term “Responsible Person” has a legal definition, it is not open to building owners, enforcing authorities or others to choose to “make” someone the Responsible Person, nor can the responsibility for compliance with either the Fire Safety Order or the Fire Safety (England) Regulations be delegated to others (though the Responsible Person will normally need to engage other parties, such as contractors, to assist them in compliance).
Under certain circumstances, duties can also fall on individuals other than the Responsible Person if any of the requirements of the Fire Safety Order relate to matters within their control. In such circumstances, the Responsible Person will still also retain their duties under the Fire Safety Order.
For all practical purposes, in the case of a block of flats, the Responsible Person will be the person who has control of the premises in connection with carrying on a business. This will, typically, be the freeholder or the managing agents for the block, or, for example, a residents’ management company.
If any part of the building is a workplace, the employer of persons employed to work in that workplace will be a Responsible Person. This can occur if, for example, a concierge is employed or parts of the building are used for commercial purposes.
So, there may be circumstances in which there is more than one Responsible Person within the same building. However, even in these circumstances, overall control of the building most commonly rests with the freeholder, managing agents or a residents’ management company.
Sometimes, confusion arises from the term “Person”, because it might be expected that the “Responsible Person” is an individual living person (or what, in law, is described as a “natural person”). However, commonly, the Responsible Person will be an organisation, such as a property company or firm of managing agents (or what, in law, is described as a “legal person”).
If you are unclear as to whether you are the Responsible Person for the purpose of the Fire Safety (England) Regulations, or otherwise are unsure as to the correct identity of the Responsible Person, you should seek legal advice. It is not the role of, for example, the fire and rescue service to advise you in this respect, though, in enforcing the Regulations, the fire and rescue service may require to be informed as to the identity of the Responsible Person.
You must display fire safety instructions in a conspicuous part of the building. The instructions must be in a comprehensible form that residents can reasonably be expected to understand.
The instructions must cover the following matters:
These instructions must also be provided directly to new residents as soon as reasonably practicable after they move into their accommodation, as should also be the case if there are any material changes to the instructions (e.g. as a result of alterations to the building). In addition, these instructions should be reissued to all existing residents at periods not exceeding 12 months.
You must also provide relevant information about fire doors, particularly residents’ flat entrance doors, as these play an important part in containing any fire within the flat in which it starts. In particular, you must provide information to all residents to the effect that:
Again, the information about fire doors must be provided to residents as soon as reasonably practicable after they move into their flat and at periods not exceeding 12 months thereafter.
SWLA recommend that landlords provide the information to tenants at the start of each tenancy. For existing tenants – provide the information as soon as possible and document that you have done so.
For more information please see the gov.uk guidance;
Read the regulations here;
Since first being introduced in 2013, Universal Credit (UC) has streamlined and simplified the benefits system to better support those in work on low incomes, as well as those who are unemployed or who cannot work.
Claimants who are on the old style (legacy) benefit payments system are currently being migrated over to UC payments.
This will happen with a three-track approach – natural migration, voluntary migration (“choose to move”) and managed migration.
As has been the case since the start of UC rollout, when a legacy claimant experiences a change in circumstances (for example, a change in employment status or family situation), they need to make a new claim for a benefit that UC has replaced and they will “naturally” migrate to UC.
Legacy claimants can choose themselves to voluntarily move across to UC.
For those claimants who do not choose to migrate voluntarily nor have migrated naturally, DWP will need to manage their migration to UC.
Underpinning managed migration is the DWPs commitment to transitional financial protection to ensure that eligible households who are moved to UC do not have a lower award on UC at the point they move if their UC entitlement is lower than their entitlement on legacy benefits.
DWP recognise that claimants’ confidence, experience and trust in the benefit system will vary. That is why the managed migration track will also be underpinned by a customer-focused approach with effective processes and systems to move people across safely.
There are several key tasks to focus on to start managed migration:
i. gathering data on the different circumstances of legacy benefits’ claimants;
ii. designing the processes and tools to calculate both UC entitlement and transitional protection (where applicable), then paying the correct award;
iii. assessing and providing the different levels of support required to make a successful claim;
iv. considering how best to notify claimants about their move; and,
v. understanding the different challenges claimants may face after making their claim to UC and the support they need.
Work to design the managed migration process resumed this January. DWP will soon start moving small numbers of legacy claimants on to UC, with a focus on refining the processes and systems for doing so to support our claimants as effectively as possible.
Optimising support for claimants in moving to UC will be a critical part of the managed migration process. The department will work closely with stakeholder groups throughout this work to monitor and understand what support is required and what works bests for claimants. We expect all claimants to migrate to UC by 2024.
If tenants have any questions or queries about this subject, they can contact the Job Centre Plus who have walk in and appointment based services to support benefit claimants.
For further information see; Completing the move to Universal Credit – GOV.UK (www.gov.uk)
The reduction in landlords’ Capital Gains Allowance has triggered a sell-off by landlords at a 13-year high according to new figures.
Last month Chancellor Jeremy Hunt announced that the amount you can make from the sale of certain assets before paying tax will fall from £12,300 to £6,000 in April 2023 and then to a mere £3,000 in April 2024.
Tom Cranenburgh from the GetAnOffer Estate Agency says this has sounded the alarm for many landlords.
“The changes to Capital Gains Allowance couldn’t really have come at a worse time for landlords. Right now many are already facing a reduction in property values, rafts of new regulation and the prospect of many of their tenants struggling to pay their rent due to the cost of living crisis.
“That’s why many are reacting to this unwelcome blow by already opting to quit the market and sell up.”
Cranenburgh continues: “We track all enquiries really carefully, and landlords looking to sell are coming to us more than I can remember since we began back in 2009. Some are hoping to sell with tenants remaining, others have given two months notice and want the place sold as soon as it’s empty to avoid paying all the costs with no rent coming in.
“Landlords looking to sell are up nearly 65 per cent in November versus October and nearly 300 per cent versus November 2021.”
Basic rate taxpayers pay 10 per cent CGT on most asset sales and 18 per cent on property. Higher rate taxpayers pay 20 per cent CGT on most assets and 28 per cent on property.
A landlord paying higher-rate tax would pay up to £1,764 more tax on a property gain above the threshold if they sold between April 2023 and April 2024 (when the threshold is £6,000), and up to £2,604 more after the threshold drops to £3,000, according to the investment platform AJ Bell.
A landlord paying basic-rate tax would pay up to £1,134 more in CGT if they sold their property between April 2023 and April 2024, and up to £1,674 extra from April 2024.
Landlords who manage their buy to let portfolio through a limited company and pay themselves in dividends will also be hit by changes to the dividend allowance, which is the amount that an individual can receive in dividends before paying tax on them. That allowance will be cut from £2,000 a year to £1,000 in April, and then halved again to £500 in April 2024.
In the autumn the number of limited companies set up to hold buy to let properties passed 300,000 for the first time as more landlords moved properties from personal to company names.
Article from Landlord Today
In a high profile speech at Stratford, Sunak said he would focus “relentlessly” on five issues.
He said: “I want to make five promises to you today. Five pledges to deliver peace of mind. Five foundations, on which to build a better future for our children and grandchildren.
“First, we will halve inflation this year to ease the cost of living and give people financial security. Second, we will grow the economy, creating better-paid jobs and opportunity right across the country.
“Third, we will make sure our national debt is falling so that we can secure the future of public services. Fourth, NHS waiting lists will fall and people will get the care they need more quickly.
“Fifth, we will pass new laws to stop small boats, making sure that if you come to this country illegally, you are detained and swiftly removed.
“So, five promises – we will: Halve inflation, grow the economy, reduce debt, cut waiting lists, and stop the boats. Those are the people’s priorities. They are your government’s priorities. And we will either have achieved them or not.
Sunak promised to work “night and day” to deliver on the five challenges during this parliament and to create “a future that restores optimism, hope and pride in Britain”.
His speech was wide ranging covering educational aspirations, innovation, hard work, social care and a range of other issues – but there was no mention of housing in general and no specific mention of rental reform.
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Former Conservative Prime Minister Theresa May first proposed rental reforms, including specially the scrapping of Section 21 eviction powers, back in spring 2019.
Just two weeks ago, shortly before Christmas, the current Housing Secretary – Michael Gove – said: “We’re going to be bringing forward more legislation to improve the position of people in the private rented sector. We want to make sure that people in the private rented sector are confident that local government is on their side. We will bring forward legislation that will give them better protection. It will come in the next calendar year, so 2023.”
The details of the Renters Reform Bill, contained in a parallel White Paper, were released back in June but the government – at that time led by Boris Johnson – did not set out a timetable for implementation.
The measures included a ban on Section 21 evictions and the extension of the Decent Homes Standard to the private rental sector. It also pledged an end to what it calls “arbitrary rent review clauses, give tenants stronger powers to challenge poor practice, unjustified rent increases and enable them to be repaid rent for non-decent homes.”
Article from Landlord Today
Buyer demand levels declined in the fourth quarter of 2022 as economic pressures and the increased cost of borrowing continue to force many people to re-evaluate their home-buying aspirations, according to newly released data from GetAgent.
GetAgent’s Hotspots Demand Index monitors homebuyer demand across England on a quarterly basis. Current demand is based on the proportion of stock listed as already sold (sold subject to contract or under offer) as a percentage of all stock listed for sale. E.g, if 100 homes are listed and 50 are already sold, the demand score would be 50%.
The latest index shows that across England, buyer demand is currently at 48.3% which marks a -9.2% decline since Q3 2022 and -17.3% decline since this time last year, suggesting that the pandemic-inspired property boom is being brought well and truly back down to earth by the significant economic pressures facing the nation’s would-be homebuyers.
England’s strongest sales demand hotspot is currently Durham where it sits at 68%. This is -5.6% lower than Q3 of this year, but -14.6% lower than this time last year.
The city of Bristol, which ranked as the number one sales demand hotspot last quarter, now ranks second with 56.6% while Surrey (56.4%), Greater London (55.9%), and the City of London (54.8%) all maintain good levels of demand despite all experiencing quarterly and yearly declines.
In terms of annual change, the worst-hit places are the Isle of Wight (-25.5%), East Riding(-25.5%), and Derbyshire (-24.8%).
The worst-hit places in the last quarter are East Riding (-12.9%), Bedfordshire (-12.8%), and Staffordshire (-12.7%).
In the search for good news, optimism is hard to come by. No parts of England have experienced sales demand growth in the past year or the past quarter.
The smallest annual declines have been reported in Lincolnshire (-4.7%), Leicestershire (-8.0%), and Suffolk (-9.8%), while the smallest quarterly declines are in Suffolk (-3.6%), Durham (-5.6%), and Wiltshire (-5.9%).
Colby Short, Co-founder and CEO of GetAgent.co.uk, commented: “After a couple of years of manic demand, activity, and price increases, we end 2022 with a gentle bump back down to earth. Economic gravity was always destined to enforce the declines we’re currently seeing and, in many ways, it’s a surprise that it’s taken this long to happen.
“You’re going to read all sorts of pessimistic property headlines over the coming months, but the forecast isn’t actually that bleak. Look at the long-term history of house prices and you’ll see that the property market is never down for long, regardless of how many pandemics and economic crashes are thrown it’s way.
“However, the fortunes of the housing market are very much in the hands of the Bank of England at the moment because, until interest rates come down and borrowing becomes more affordable, lenders are going to be tighter with their mortgage offers and buyers are going to be nervous about taking on these relatively high levels of risk.”
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Tenants struggling with the rising cost of living and surging energy prices are choosing to stay put rather than move to a new property and risking a rise in rental costs under a new contract, according to research from estate and lettings agent, Barrows and Forrester.
The firm has revealed that tenant demand has started to fall across England’s rental market, with demand down by as much as -29% in some parts of the country.
The Barrows and Forrester Rental Demand Index monitors rental listings across the nation, taking an average demand score for each English county based on the number of properties already let as a percentage of all rental listings, highlighting where demand for rental homes is at its highest.
Rental demand across England is currently sitting at 33.9% after a quarterly drop of -12% between Q3 and Q4 of last year.
With a decline of -28.9%, the City of Bristol has reported the most significant rental demand drop, followed by Nottinghamshire (-21.5%), the City of London (-20%), West Yorkshire (-18.7%), and Greater Manchester (-18.5%).
Some parts of England have, however, experienced demand growth in the past quarter, none more so than Durham where it has increased by 12%.
Demand on the Isle of Wight has increased by 3.5%, and it’s a 1.9% boost for both Shropshire and Essex. These are the only parts of the country to report an increase in rental demand.
England’s current rental demand hotspot is West Sussex where demand for rental properties sits at 56.1%. This is followed by Bedfordshire (54.4%), Essex (54%), Bath & North East Somerset (51.5%), and Dorset (51.5%).
Meanwhile, demand is at its lowest in the West Midlands (19%), Leicestershire (20.8%), and West Yorkshire (21.3%).
James Forrester, Managing Director of Barrows and Forrester, commented: “Rental demand is down across all but four areas of England and the rising cost of living and surging energy prices will be playing a significant part in this decline.
“Tenants are fully aware that landlords are seeing their own expenses rise, not least mortgage payments, and are passing these increasing costs to their tenants. As such, renters are choosing to stay put at the moment with tenancy agreements that were signed before the current economic crisis instead of exposing themselves to a market where prices are likely to get higher and higher.
“As the cost of living crisis eases, whenever that might be, rental demand will certainly increase. But for now, tenants are staying put.”
Article from Property Reporter
Article by GoSimpleTax
You may be wishing that you had completed and filed your 2021/22 Self Assessment tax return weeks if not months ago.
But January has arrived and for whatever reason, you didn’t get it done. It’s a busy life and who enjoys doing tax returns? But don’t worry – you’re not alone. Each year, about four million people put off filing their Self Assessment tax return until after Christmas, despite the impending midnight 31 January online-filing deadline.
So, if you’re a busy landlord with other things to do and little time to spare, how do you get your 2021/22 Self Assessment tax return off your plate as quickly as possible with minimum fuss?
Are you registered for Self Assessment?
You must report your rental income via a Self Assessment tax return if it’s more than £2,500 after “allowable expenses” (more on these below) or £10,000 or more before allowable expenses have been deducted. To pay Income Tax on your rental income, if you didn’t file a tax return in the previous tax year, landlords must register for Self Assessment. It’s quick, easy and free!
Need to know! You must register for Self Assessment by 5 October latest in your second tax year (UK tax years run from 6 April to 5 April). If you haven’t done so by now, sorry, you’ll probably have to pay a fine.
Decide how to file your landlord Self Assessment tax return online
There are three options. You can…
How long will it take to fill out your landlord Self Assessment tax return?
The SA100 Self Assessment tax return and landlord supplementary pages
Within the Self Assessment tax return (the “SA100”, which is eight pages long), you provide details of taxable income and any capital gains, as well as (if applicable) student loan repayments, taxable bank or building society interest, pension payments/annuities, donations to charity and tax reliefs and allowances that you wish to claim.
As a UK landlord, you complete the main Self Assessment tax return (the SA100) as well as a supplementary page (SA105), summarising your taxable rental income and any associated costs you wish to claim.
If you earn taxable income from other sources, you’ll need to complete and file other supplementary pages, for example, the SA103 if you also earn taxable income from self-employment and/or the SA102 if you also earn income from employment or as a company director (see GOV.uk for the full list of Self Assessment tax return supplementary pages).
Self Assessment tax return allowable expenses for landlords
Landlords can claim for many costs arising from renting out their property. Such “allowable expenses” can include: property maintenance, repair and redecorating costs, gardening and cleaning, insurance, service charges, lettings agent and management fees, etc. You summarise your rental allowable expenses within your supplementary SA105 form.
If your rental property is furnished or part-furnished, you may be able to claim Replacement of Domestic Items Relief for replacing sofas, beds, carpets, curtains, white goods, sofas, crockery, cutlery, etc. See GOV.uk for more information on Replacement of Domestic Items Relief.
If you use something for rental income and personal reasons, for example, your mobile phone, you can only claim allowable expenses for the rental income-cost proportion. You’ll need to use a reliable method to work out how much to claim. You’ll also need to retain proof of such costs (HMRC can request this).
“Capital expenses” created by, for example, adding an extension, upgrading kitchen or bathroom, installing a burglar alarm if there wasn’t one previously, etc, are not allowable expenses. However, keep records of such costs because you may be able to offset them against Capital Gains Tax if you one day sell the property.
Need to know! You can’t claim allowable expenses if you claim the £1,000 tax-free property allowance, which is advised if your expenses are below £1,000 a year.
Completing your landlord Self Assessment tax return
Try to complete your Self Assessment tax return as soon as possible in January. The later you leave it, the closer the deadline will get, which could encourage you to rush completing your Self Assessment tax return. This makes mistakes more likely.
Take your time when completing your Self Assessment tax return. Give yourself enough time to get it done, in as few sessions as possible. Do it somewhere where there are no distractions, so you can concentrate on completing your Self Assessment tax return. If possible, don’t leave it too late in the day, when you’re likely to be more tired.
Top tip! Before you start to fill in your Self Assessment tax return – to help you get the job done quicker – have the following to hand:
Having all of your rental income and costs already conveniently summarised in accounting software really will save you lots of time when filling in your Self Assessment tax return. Figures from accounting software can easily be imported into Self Assessment filing software. Alternatively, manually summarise all of your rental income and costs before you start to fill out your Self Assessment tax return. Double check to make sure that your figures are correct.
Need to know! If you file online but realise that you’ve made a mistake in your Self Assessment tax return, you’ll have to wait 72 hours, but you’ll then have up to 12 months to correct any errors.
What if you still miss the online filing deadline?
If you miss the midnight 31 January online filing deadline and don’t have a reasonable excuse, you’ll be charged a £100 penalty. Your fine will increase if you still haven’t filed your Self Assessment tax return after three months.
Income, Expenses and tax submission all in one. GoSimpleTax will provide you with tips that could save you money on allowances and expenses you might have missed.
Our software submits directly to HMRC and is the digital solution for Landlords to record income, expenses and file their self-assessment giving hints on savings along the way.
Covering all self-assessment pages, not just property, GoSimpleTax does all the calculations for you.
Article by GoSimpleTax
It had initially been proposed that all landlords with a gross rental income above £10,000 would need to be using MTD by 2024. Here are the new plans…….
You need to follow the requirements for Making Tax Digital for Income Tax if you are self-employed or a landlord from:
Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the Making Tax Digital for Income Tax. If you are a self-employed business or landlord, check if you can voluntarily sign up now through your software provider.
If you’re signing up your own business, you should use the step-by-step guide for Making Tax Digital for Income Tax to get started.
If you’re an agent, you should follow the Making Tax Digital for Income Tax step by step guide for agents.
The SWLA office will close at midday on Friday 23rd December and reopen at 10am on Tuesday 3rd January. During the closed period, email and voicemail queries will be monitored and replied to.
We wish our members and the wider community a happy and peaceful Christmas. From the SWLA Committee and Office Staff.
Wednesday 8th February 2023 – 9:30am – 1pm
Venue – Online
If you are accredited this will count towards your CPD hours, but the course is open to all.
Cost for SWLA members – £35 Cost for non-SWLA members – £40
Course will cover –
Disrepair situations and not resolving them in a timely manner has the potential to derail possession claims and can lead to a financial counterclaim and fixed penalty fines. This course will cover the statutory and common law obligations placed upon landlords, explore fitness for human habitation, the importance of inventories and visits to check for disrepair/lifestyle causing damage or potential damage. Also, what landlords can expect from their tenants regarding living in a ‘tenant like manner’…. Plus, some useful tips on how to avoid potential problems.
Places secured upon receipt of payment, book your place through the office 01752 510913.
The course will be instructed by Stephen Fowler from Training for Professionals.
Bristol Rent Control survey | Ask Bristol Consultation and Engagement Hub
Wednesday 15th February 2023 – 9:00 – 4:30pm
Venue – Online
Price – £65 for members of SWLA, £75 for non – members for one day course.
Course covers ASTs, Deposits, Section 21s, Section 8s, HMOs, Gas and Electrical Safety, Inventories and much more.
The course will provide you with all the skills to start, manage and finish a tenancy.
Places still available. Contact the office on 01752 510913 or info@landlordssouthwest.co.uk to book your place, places only secured on receipt of payment.
Over 1120 landlords have already completed this course since September 2011.
Course can lead to Accreditation, if required.
We are proud to announce Landlord Accreditation South West (LASW) are founder members of the West of England Rental Standard.
Wednesday 25th January 2023 @ 7.30pm Future Inn Plymouth, Members Only…………
Dame Caroline Dinenage, MP for Gosport, secured a key concession in the debate on the Levelling-up and Regeneration Bill on the Council Tax valuation of rooms in shared living accommodation.
Caroline tabled an amendment, New Clause 7, to the Bill, with the aim of addressing increasingly common instances of Council Tax being placed on occupants of Homes of Multiple Occupancy (HMOs).
This amendment was developed alongside local businessman Daryn Brewer, who is converting numerous empty shops on Gosport High Street into high quality shared living spaces, with independent shops occupying the lower floor and high-spec HMOs on the upper floors, with shared kitchen, laundry and workspaces.
Caroline has been campaigning on this issue alongside Portsmouth North MP, Rt Hon Penny Mordaunt MP, for two years. They have attended numerous meetings with Ministers.
Speaking in the debate, Caroline said:
“There is a huge financial strain on people, often young professionals, at the very start of their careers, suddenly landed with a council tax bill of up to £1000, even once they’ve allocated the single person discount.”
“Shared housing is a core pillar of the housing sector. In 2018, HMOs provided 3 million sharers with rental accommodation across England and Wales. So this has the potential to become a major problem.
“Council tax is a property tax, it is not a head tax, and it should not be down to individuals who are simply paying for a bedroom to foot this bill.”
As a result of Caroline’s amendment, the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, has written to confirm an accelerated consultation will now investigate how the Valuation Office Agency apply council tax bands, especially to HMOs.
In his letter to Caroline, he said:
“You have very clearly set out concerns that the approach taken to the council tax banding of some properties could act as a deterrent to entering the HMO market, as well as causing financial hardship for tenants. In light of those points, I will consult on the way that HMOs are valued for council tax. This will allow us to ensure that HMOs are valued as a single dwelling, unless exceptional circumstances apply.”
Dehenna Davison, the Parliamentary Under Secretary of State for Levelling-up responded in the debate, saying:
“I am very grateful that we were able to reach a good position on this, and I look forward to working with her and her constituent Mr Brewer on the consultation and beyond to ensure we get this right.”
Speaking after the debate Caroline said:
“I’m delighted that we are finally making progress on this issue which is increasingly causing distress and concern to residents in shared living accommodation in our area. I look forward to working alongside the Minister to ensure this is tackled once and for all.”
An HMO is a dwelling in which multiple residents reside with separate bedroom spaces, but a shared kitchen facility. There are increasingly instances of Council Tax being charged to individual residents, rather than the landlord of the house as a whole, with each living space being falsely counted as a separate dwelling.
Caroline tabled New Clause 7 to ensure Council Tax is charged to the property as a whole, rather than issuing several unaffordable bills to individual occupants.
For more information contact caroline.dinenage.mp@parliament.uk
-To watch Caroline’s full contribution, please go to https://parliamentlive.tv/event/index/9272f2d4-bab3-47fe-aa4e-c5d38298f8bb
Article from https://www.caroline4gosport.co.uk/news/caroline-wins-council-tax-victory
SWLA have received many calls from our members in relation to this matter – the council tax rebranding is happening across the UK and affects many HMO landlords. We encourage HMO landlords to raise this matter with their MP to gain as much support as possible.
On Monday 28 November, Business and Energy Secretary Grant Shapps launched a government push to help millions of people across the country bring down their energy costs for this winter and beyond.
It is part of wider action this week across energy policy to help the UK meet its ambition of becoming energy independent.
Under plans announced, the new ECO+ scheme will extend support to those who do not currently benefit from any other government support to upgrade their homes. Joining the existing £6.6 billion ‘Help to Heat’ energy schemes this new £1 billion funding will ensure hundreds of thousands more households benefit from new home insulation and with that, lower bills.
Plus a new £18 million public information campaign will also offer technical tips and advice for people to cut their energy use, while also keeping warm this winter. Alongside the impact on their bills from the Energy Price Guarantee, the campaign will demonstrate how consumers can make significant savings.
Of the £1 billion funding available through the new ECO+ scheme, around 80% of the funding will be made available for those households who are in some of the least energy-efficient homes in the country – that is, those with an EPC rating of D or below – and in the lower Council Tax bands.
This will benefit those households who do not currently benefit from any other government support to upgrade their homes. Around a fifth of the fund will also be targeted to those who are the most vulnerable, including those on means tested benefits or in fuel poverty.
On top of this, the government will significantly expand its Help for Households campaign to help customers to reduce their own household energy usage and bills, while also giving vulnerable groups the right information for doing this without harming their health.
This includes promoting some of the government’s top recommended actions to help households save money on their energy bills, such as:
It also comes ahead of the Business and Energy Secretary setting out his latest package of measures to deliver home-grown, affordable energy – helping to cut bills and bolster the country’s long-term energy security and independence.
Business and Energy Secretary Grant Shapps said:
The government put immediate help in place to support households in the wake of global energy price rises caused by Putin’s illegal march on Ukraine. Today, we launch the first of many measures to ensure the British public are never put in this position again as we work towards an energy independent future.
A new ECO scheme will enable thousands more to insulate their homes, protecting the pounds in their pockets, and creating jobs across the country.
And in the short term, our new public information campaign will also give people the tools they need to reduce their energy use while keeping warm this winter.
Chancellor of the Exchequer Jeremy Hunt said:
With Putin’s war driving up gas prices worldwide, I know many families are feeling worried about their energy bills this winter and beyond. Our extensive energy support package is insulating people from the worst of this crisis, but we’re also supporting people to permanently cut their costs.
In the longer term, we need to make Britain more energy independent by generating more clean, affordable, home-grown power, but we also need more efficient homes and buildings.
Our new ECO+ scheme will help hundreds of thousands of people across the UK to better insulate their homes to reduce consumption, with the added benefit of saving families hundreds of pounds each year.
Making homes more energy efficient is the best way to cut household energy use and is already helping reduce household energy bills, while also creating jobs across the country.
Since it was launched in January 2013, the Energy Company Obligation (ECO) schemes have delivered as many as 3.5 million energy-efficiency measures in around 2.4 million homes. The ECO+ scheme, which will run from spring 2023 for up to 3 years, extends that support even further and will see hundreds of thousands of households receive new insulation, saving them around £310 a year.
By rolling out predominantly low-cost insulation measures such as loft insulation and cavity wall insulation, the ECO+ scheme will support the government’s new ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030. The £1 billion scheme is backed by a new £6 billion investment to contribute to the existing £6.6 billion energy efficiency funding pot.
The new funding pot will also provide long-term funding certainty across for the industry, supporting the growth of supply chains and green jobs in the sector, as the government takes further action to tackle fuel poverty and reduce energy bills.
Improving the energy efficiency of UK homes is a crucial part of the government’s strategy. Thanks to government support so far, the number of homes with an energy efficiency rating of C or above is at 46% and rising, up from just 13% in 2010. We are investing over £6.6 billion over this Parliament to help decarbonise homes and buildings, and to ensure all homes meet EPC band C by 2035. An additional £6 billion of new government funding will be made available from 2025 to 2028. Further details on allocation of additional funding will follow in due course.
To further support households and help meet the government’s new energy demand reduction target, the government has also expanded its public awareness campaign to help reduce bills for households and protect vulnerable people over the winter and beyond. Backed by £18 million, this campaign will complement existing government support schemes. such as the Energy Price Guarantee and the Energy Bills Support Scheme and the information provided will save households money. For example, if a typical household reduced their boiler flow temperature from 75⁰C to 60⁰C and turned down radiators in empty rooms, they could save £160 a year on their energy bill at current prices. This also has the benefit of reducing the temperature a boiler heats water to before sending it to radiators, while making no difference to the temperature a room is actually heated to.
Information will be available on the existing Help for Households website.
The government is delivering a new energy demand reduction target announced at the Autumn Statement to reduce energy demand by 15% by 2030.
The £6 billion of new government funding to back this target will be made available from 2025 to 2028.
This provides long-term funding certainty, supporting the growth of supply chains, and ensuring we can scale up our delivery over time.
Further details on allocation for this additional funding will follow in due course.
This is on top of £6.6 billion of existing spend in this parliament through Help to Heat schemes including the Social Housing Decarbonisation Fund, Home Upgrade Grant and Local Authority Delivery Scheme.
The existing ECO scheme (known as ECO4) is targeted at those who need support most; those in social housing, on a low-income or fuel poor. However, with the significant increase in energy bills, the government intends up to 80% of ECO+ to help a wider customer base who are currently not eligible for support under existing government-backed energy efficiency schemes.
The UK Government intends to lay necessary legislation for the scheme to launch in spring 23 and run until March 26. However, the government also plans to work with energy suppliers to explore the potential for some earlier delivery in 2023.
The consultation will run from 28 November to 23 December.
SWLA encourage landlords to take part in the consulation here; https://www.gov.uk/government/consultations/design-of-the-energy-company-obligation-eco-2023-2026
Article by gov.uk
Stamp Duty
The Chancellor, Jeremy Hunt MP announced measures to restore stability to the economy, protect high-quality public services and build long-term prosperity for the UK with confirmation that the increased threshold to Stamp Duty Land Tax (SDLT) will be phased out by 31 March 2025.
The nil-rate of SDLT was raised in September 2022 to £250,000 for all purchasers of residential property in England and Northern Ireland and increased the nil-rate threshold paid by first-time buyers from £300,000 to £425,000.
Energy crisis
The Energy Price Guarantee, which caps a typical energy bill at £2,500, will continue to provide support from April 2023 with the cap rising to £3,000.
More than eight million households on means-tested benefits will receive a cost-of-living payment of £900 in instalments, with £300 for pensioners and £150 for people on disability benefits.
Commercial property
A £13.6 billion package of support was included for business rates payers in England. To protect businesses from rising inflation the multiplier will be frozen in 2023-24 while relief for 230,000 businesses in retail, hospitality and leisure sectors was also increased from 50% to 75% in 2023.
To also help businesses adjust to the revaluation of their properties, which takes effect from April 2023, a £1.6 billion Transitional Relief scheme was announced to cap bill increases for those who will see higher bills.
This limits bill increases for the smallest properties to 5%. Businesses seeing lower bills as a result of the revaluation will benefit from that decrease in full immediately, with the Chancellor abolishing downward transitional relief caps. Small businesses who lose eligibility for either Small Business or Rural Rate Relief as a result of the new property revaluations will see their bill increases capped at £50 a month through a new separate scheme worth over £500 million.
Income
Working age benefits will rise by 10.1%, and the Triple Lock on pensions will be protected, meaning pensioners will also get a rise in the State Pension and the Pension Credit in line with inflation.
The National Living Wage will be increased by 9.7% to £10.42 an hour.
Housing support
The UK Government is limiting the rent increase for people in social housing in England and will only be able to rise by a maximum of 7% in 2023-2024.
Homeowners on Universal Credit will be able to apply for Support for Mortgage Interest loans after three months instead of nine months, including those in employment. This will come into effect in Spring 2023.
Taxable allowances
The threshold at which higher earners start to pay the 45p rate will be reduced from £150,000 to £125,140, while Income Tax, Inheritance Tax and National Insurance thresholds will be frozen for a further two years until April 2028.
The Dividend Allowance will be reduced from £2,000 to £1,000 next year, and £500 from April 2024 and the Annual Exempt Amount in capital gains tax will be reduced from £12,300 to £6,000 next year and then to £3,000 from April 2024.
The threshold for employer National Insurance contributions will be fixed until April 2028, but the Employment Allowance will continue to protect 40% of businesses from paying any NICS at all.
Confirmation that Corporation Tax will still increase to 25% from April 2023.
Electric vehicles will no longer be exempt from Vehicle Excise Duty from April 2025.
Energy Efficiency Task Force
A new long-term commitment to drive improvements in energy efficiency to bring down bills was also announced, with an ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030 against 2021 levels.
New UK Government funding worth £6 billion will be made available from 2025 to 2028, in addition to the £6.6 billion already pledged. The Task Force will be charged with delivering energy efficiency across the economy.
Article Abridged from ARLA Propertymark
https://www.propertymark.co.uk/resource/autumn-statement-commits-to-help-cost-of-living-crisis.html
There is a shortage of homes in Plymouth – can you help?
Demand for private rented accommodation has seen significant increases over the past 2 years. At the same time we are seeing an increasing number of households approaching us as homeless or at serious risk of homelessness. There are more single persons, couples and families than ever in temporary accommodation including bed and breakfast, waiting to move on to a home.
Plymouth City Council are reaching out to you as we believe you are either a landlord, or agent, who may be able to help be a part of the solution!
If you have under-occupied buildings such as HMO’s, if you have tenants that are moving out and need to organise re-letting, or if you have ideas on what could work better, then we want to hear from you.
The below link will take you to a form which will capture information surrounding either vacancies you currently hold, or are anticipating in the near future, and also allows you to make suggestions regarding longer-term solutions. The form only takes a couple of minutes to complete and could save you time and money by helping you to occupy your building.
We also have 2 existing schemes in the City which means you may be able to help with the current shortage of homes.
1 If you are interested in leasing your property to us at a guaranteed monthly rental please contact communityconnections@plymouth.gov.uk in the first instance with the subject title Houselet.
2) Owners of empty properties who are interested in letting their properties to those in need of accommodation in the city can contact Plymouth Homes4Let (PH4L): https://www.ph4l.co.uk/ PH4L is a local letting agency that works with the Council, managing properties on behalf of owners.
Thanks in advance and we look forward to hearing from you.
Article by Plymouth City Council
SWLA Trade Point Members receive 10% off on top of these deals. All Black Friday deals are whilst stock lasts.
Click here to view the deals; BlackFriday_Flyer_A5_12pp_small
A report by the Office of Tax Simplification (OTS) on the Income Tax rules for residential property income. The report looks into the common issues and concerns facing taxpayers and outlines several key recommendations for change.
In this report the Office of Tax Simplification (OTS) considers the UK taxation of income from residential property, primarily in relation to individuals. Nearly one in ten Income Tax payers have income from property, underlining its importance within the UK economy and tax system.
Across the spectrum of sophistication and scale of activities, the 2.9 million property businesses reported by individuals to HMRC for income tax must face the rules for taxation of income from property. This report contains findings and recommendations to help reduce complexity and enhance understanding of taxpayers’ obligations.
This report also covers the general regime for property and the confusion and challenge raised by large numbers of respondents about matters such as the allocation of income between joint owners, and in relation to rules which cause significant distortions or complexity such as the circumstances for diversified agricultural businesses.
The report looks in detail at how Making Tax Digital for Income Tax will affect landlords, and questions whether the initial and medium term threshold for entry into the new system should be increased above £10,000.
The report looks at non-resident landlords and encourages HMRC to make it easier for them to register for and report their income online for UK tax purposes. It also recommends that the government should consider removing the obligation on individual residential tenants in some situations to withhold tax from their rental payments to non-resident landlords.
Article by GoSimpleTax
There are about 2.6m private landlords in the UK, and although some have large, lucrative property portfolios, 43% of private residential landlords in England rent out just one property. About 39% rent out two to four properties, while 18% rent out five or more. It’s a similar story elsewhere in the UK.
Sometimes people become “accidental landlords”, for example, after inheriting a property which they rent out rather than sell. In other cases, people move to another UK or overseas location and rent out their former home, which provides welcome additional income, as well as a sound retirement investment.
If you’ve just become a residential landlord or you’re interested in becoming one, naturally you’ll want to know the answer to one key question – “how much UK tax will I pay on my rental income?”
How much tax will you pay on your rental income?
Need to know!
To pay tax via Self Assessment you must first register with HMRC. If you don’t normally file a tax return, you must register for Self Assessment by 5 October following the end of the tax year (5 April) within which you had rental income to report.
Your rental income will be added to your other taxable income and once allowances and reliefs have been claimed, you’ll be taxed on what’s left. The Income Tax band into which you fall will determine the size of your tax bill.
Claiming allowable expenses
For an expense to be allowable/deductible, it must result “wholly and exclusively” from renting out your property. If you use something for personal and landlord reasons, such as a mobile phone, you can only claim allowable expenses for calls you make for renting out and managing your property.
You claim allowable expenses by summarising them within your Self Assessment tax return, as well as your rental income and other sources of taxable income. Then HMRC will tell you how much Income Tax you owe.
Need to know! The online filing deadline for your Self Assessment tax return is midnight on 31 January following the end of the tax year in which you had taxable income. The UK tax year runs from 6 April until 5 April.
What allowable expenses can landlords claim?
Allowable expenses that landlords can claim can include:
What expenses can’t landlords claim?
You cannot claim mortgage capital repayments as an allowable expense. Neither can you claim for mortgage interest payments or other finance-related costs (eg mortgage-arrangement fees). Instead, you get a 20% tax credit to cover such outgoings.
When replacing things, for example, a toilet or burglar alarm, you cannot claim a full allowable expense if the replacement is of superior value. You can only claim for a “like for like” amount as an allowable expense.
Improving a property, for example, by adding an extension, cannot be claimed as an allowable expense, because you’re making a “capital improvement”. Later, if you sell the property, you may be able to claim capital expenses against Capital Gains Tax.
Need to know! You can’t claim an allowable expense for replacing sofas, beds, carpets, curtains, furnishings, white goods, etc in a furnished or part-furnished rental property. But you might be able to claim Replacement Domestic Items relief, which will also reduce your Income Tax bill. Once again, you cannot claim for something of superior value.
What about undeclared rental income?
If, for whatever reason, you’ve earned rental income that you haven’t reported via Self Assessment, you can tell HMRC about it by means of a “voluntary disclosure”. There may be a penalty to pay, but it will be lower than it would be if HMRC finds that you’ve failed to report taxable rental income. Visit government website GOV.UK to find out more.
Income, Expenses and tax submission all in one. GoSimpleTax will provide you with tips that could save you money on allowances and expenses you might have missed.
Software submits directly to HMRC and is the digital solution for Landlords to record income, expenses and file their self-assessment giving hints on savings along the way.
Covering all self-assessment pages, not just property, GoSimpleTax does all the calculations for you.