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In a Sky News interview last week, Michael Gove announced that the Renters Reform Bill would be ‘out next week’ and introduced into Parliament. This decision has now been back-tracked due to ‘procedural issues’.
Over the Bank Holiday weekend, speculation was mounting that Tory backbenchers were unhappy with the pro-tenant, anti-landlord sentiment contained in the proposed legislation.
The Bill was first pledged by the Conservative administration back in 2019.
A Department for Levelling Up, Housing & Communities spokesman said: “We are absolutely committed to delivering a fairer deal for renters.
“We will bring forward legislation very shortly, which will include a ban on ‘no fault’ evictions, so that all tenants have greater security in their homes and are empowered to challenge poor conditions.
“We are also introducing a Decent Homes Standard for the Private Rented Sector for the first time ever which will make sure privately rented homes are safe and decent.”
We had a great turn out last night at the Future Inn, Plymouth for our General Speaker Meeting. We had over 65 members in attendance.
Huge thanks to our brilliant speakers.
Iain Pring and Sean Bolter from Westcotts Chartered Accountants, shared their extensive knowledge of all things tax related. They discussed tax deductible expenditure, capital gains, inheritance tax planning and Making Tax Digital.
Our second speaker of the evening was Martyn Taylor of Ashley Taylors Solicitors, who made quite a journey in order to present for us. He shared his experience on court possession cases and gave great advice on how to prevent landlord errors in order to ensure a smooth tenancy. Martyn also shared tips on how to gain possession when required. Look out for Martyn’s next webinar, which SWLA members are welcome to join for free.
Thank you to all who attended, it was great to see everyone and we look forward to the next meet!
The UK Government has announced an action plan to crack down on anti-social behaviour giving more powers to the police to target perpetrators with swift and visible justice in England and Wales.
16 areas will be funded to support either new ‘hotspot’ police and enforcement patrols or trial a new ‘Immediate Justice’ scheme. A select few areas will trial both interventions and following the initial trailblazers, both schemes will be rolled out in 2024.
A new reporting tool will also be developed over the next twelve months to act as a digital one-stop shop where people can quickly and easily report incidents of anti-social behaviour.
Under the zero-tolerance approach, nitrous oxide or ‘laughing gas’ will also be banned. The drug is now the third most used among 16 to 24-year-olds in England and both the police and the public have repeatedly reported links between the use of the drug and nuisance or anti-social behaviour.
The UK Government’s plan to reform the private rented sector outlines tougher enforcement on nuisance tenants.
The Action plan highlights that sustained acts of intimidating or disruptive behaviour will not be tolerated and should lead to the eviction of the tenant involved. The UK Government will be changing laws and arming landlords with tools to ensure that anti-social tenants will face consequences including making the grounds for possession faster and easier to prove.
Other measures include:
We need to see clarity on how the measures will work in practice and when the new legislation will be in effect, until then landlords will continue to struggle to evict nuisance tenants.
Article by PropertyMark; https://www.propertymark.co.uk/resource/landlords-to-be-given-more-powers-to-evict-unruly-tenants.html
THIS INFORMATION IS FOR THE NON-DOMESTIC PRIVATE RENTED SECTOR – COMMERCIAL LETS
In 2018, changes to the law made it illegal to sign a new or renewed lease for a non-domestic property that does not meet the MEES regulations, meaning for any property with an Energy Performance Certificate (EPC) rating of F or G.
From April 2023, the regulations will extend to all privately rented properties, including those where a lease is already in place and a property is occupied. Therefore, unless an exemption applies, it will be unlawful to continue renting out any property that does not meet the new regulations.
It has been estimated that up to 20% of non-domestic properties could have an EPC rating below an E, meaning that unless they were upgraded to meet the minimum standards or an exemption is successfully registered, it is now illegal to rent them.
Enforcement of the regulations is carried out by the local authority. Where a property does not meet the regulations, landlords can be fined up to £5,000 per property or up to 10% of the rateable value of the property. In addition, there is also a risk of loss of value of the property, with the marketability likely to suffer and lenders, banks, and pension funds less inclined to consider properties that are EPC band F or G.
There are a number of exemptions available to landlords. The full list can be found in the Non-Domestic MEES Guide. However, it is important to note that most exemptions are only valid for a maximum of five years. After this time, landlords are required to resume efforts to improve the EPC rating of their properties. To register for an exemption, visit the government webpage, Register an Exemption.
Further changes to the MEES regulations are expected over the coming decade.
Article from Elmhurst Energy; https://www.elmhurstenergy.co.uk/blog/2023/03/28/changes-to-non-domestic-mees/
An updated ‘How to Rent Guide – The Checklist for Renting in England’ has been published by the government.
https://www.gov.uk/government/publications/how-to-rent
Landlords or letting agents should give the current version of this guide to the tenant when a new assured shorthold tenancy starts. There is no requirement to provide the document again if the assured shorthold tenancy is renewed unless the document has been updated.
All new tenancies and renewals from and including 24th March 2023 will need this new version provided!
Feeding the Unfortunate, Lost, Lonely, Hungry, Rough sleepers and Homeless – a local charity who gather people together over food, supporting local people who may need extra support.
Andy Metcalf of FULLHRH receiving a cheque from Steve Lees, SWLA Chairman.
Wednesday 19th April 2023
Future Inn Hotel, William Prance Road, Plymouth PL6 5ZD
7.15pm for a 7.30pm start
Speakers will include:-
Ian Pring & Sean Bolter – Westcotts Chartered Accountants:
Tax matters in the PRS – Tax Deductible Expenditure, Capital Gains, Record Keeping & Making Tax Digital Preparation, Inheritance Tax Planning.
Martyn Taylor – Ashley Taylors Legal – Possession Specialists:
Courts are finding Section 8s & Section 21s invalid more often; How to prevent that. Also – a Renters Reform Bill update.
Wine & orange juice will be served during the evening.
We hope to see you there, guests are very welcome.
Please remember to register your car at the hotel reception upon arrival.
24th to 27th March 2023 – 10% off TradePoint/B&Q – SWLA TradePoint Members receive an extra 10% off on top of this.
We have been informed that the following guides are being updated by the government during week commencing 13 March 2023:
‘How to rent: the checklist for renting in England’ You must provide your tenants with a copy of the latest version of the ‘How to rent’ guide at the start of a tenancy, either as a hard copy or, if agreed with the tenant in writing, via email as a PDF attachment. You cannot rely on a section 21 notice to obtain possession from the tenant if you have not provided this document. We recommend that landlords access the guide from the gov.uk website to ensure that it’s the most up to date version that tenants receive.
‘How to let’ This guide is for current and prospective landlords. It explains the responsibilities, legal requirements, and best practice for letting a property in the private rented sector.
The ‘Make Things Right’ campaign aims to ensure more social housing residents who need support know how to make a complaint.
The ‘Make Things Right’ campaign aims to ensure more social housing residents who need support know how to make a complaint.
It is based on the idea that everyone deserves a home that is safe, secure and well maintained, and anything less is unacceptable. And if a resident has reported an issue and it hasn’t been fixed, it’s now easier to make things right.
The campaign sets out the steps of the complaints process that residents can take if they are unhappy with the service from their social housing provider.
This toolkit provides materials which landlords, stakeholders, and residents can use to spread the word among residents about how to make complaints, including by signposting to gov.uk/social-housing-complaints for advice.
The campaign will be running across the following channels:
Advertisements on radio and digital audio, social media, and toolkit resources will be translated into Arabic, Bengali, Polish, Punjabi, Romanian and Urdu.
The advertising campaign will run until April 2023, with the use of communications toolkits continuing. Campaigns toolkits will remain live online after April 2023. Planning is underway for future campaigns.
The campaign uses the phrase “it’s now easier to make things right”.
While the government is acting in many ways to improve the complaints process and conditions in social housing, the phrase’s use in this campaign mainly refers to the recent removal of the “democratic filter” and the introduction of a Complaint Handling Code for social housing providers.
The removal of the democratic filter means it is quicker and easier for residents to take complaints straight to the Housing Ombudsman Service. It has done this by removing the need to go to an MP, local councillor or tenants’ panel first, and to wait 8 weeks after completing the landlord’s complaints processes, before being allowed to take a complaint to the Ombudsman.
The Complaint Handling Code took effect from 1 April 2022 and landlords had until 1 October 2022 to become compliant. In short, it sets out good practice that will allow landlords to respond to complaints effectively and fairly. This includes good communication with residents about how to complain, and saying only two stages are necessary in landlord’s processes, with clear timeframes set out so residents know when to expect a response.
If you have any questions about the campaign, or can share a case study of a resident helped by the complaints process (and even where landlords have learned from the process), please contact externalaffairs@levellingup.gov.uk.
Article by Gov.uk; https://www.gov.uk/guidance/make-things-right-introduction-and-how-to-help
At the end of December 2022, HMRC and the Treasury announced that Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) has been postponed until April 2026 and some of the expected eligibility requirements have also been amended. This will no doubt come as a relief for some.
In a written statement, HMRC stated:
“MTD for ITSA will now be introduced from April 2026, with businesses, self-employed individuals, and landlords with income over £50,000 mandated to join first. Those with income over £30,000 will be mandated from April 2027.”
This gives the self-employed sole traders and affected landlords more time to prepare for the switch. Furthermore, some very small businesses and landlords will now be below the initial thresholds and may not need to comply until all taxpayers are required to comply.
Why has the MTD for Income Tax been delayed?
The accounting and taxation profession had been putting pressure on the government to delay MTD, as it did not feel that tax payers or HMRC were ready for such changes. HMRC has officially stated that the reason behind this delay is to relieve pressure on businesses caused by the current economic environment.
Furthermore, HMRC currently believes a more gradual implementation of MTD will give affected taxpayers, accountants, and the government more time to prepare.
Does this mean you can forget about MTD?
Sorry, no! MTD is not going away, it has just been postponed and the criteria tweaked a little. It is still important to check that you are making plans to ensure you are ready for the changes before they become mandatory.
We are expecting HMRC to pull everyone into the new MTD system at some point in the future, regardless of income.
What about Partnerships……?
If your business trades as a partnership, then the above compliance dates will not apply. As it currently stands, HMRC have not got a compliance date for individuals trading within a partnership.
Article by L.A.Lamerton & Co Accountants – Tel 01752 255667 – This information is designed to assist understanding and does not cover all aspects applicable. We would strongly recommend that you refer to the governments published information at www.gov.uk e.& o. e.
The following case provides vital clarification about the responsibilities of ‘rent-to-rent’ companies. Rent-to-rent companies take over the running of a property for a landlord.
The ruling in the case of Rakusen v Jepsen will have important implications for the private rented sector as a whole.
The landlord, Rakusen, agreed to let a flat to a rent-to-rent company. The property required a licence, but the company did not apply for one.
As a result of the failure to be licenced, the former tenants of the flat sought a Rent Repayment Order against Rakusen rather than the rent-to-rent company – even though he had not received rent directly from the tenants.
At an initial tribunal it was ruled that the Rent Repayment Order could be applied for against Rakusen. The Court of Appeal however later overturned the decision and ruled in Rakusen’s favour.
The Supreme Court ruled that where rent-to-rent companies take over the running of a property, they cannot shirk responsibility and expect to leave the landlord to pay for their legal failings.
Ben Beadle of the NRLA said “The ruling makes clear that it is the responsibility of rent-to-rent companies acting as a landlord to ensure that relevant legal requirements are met, since it is they who receive tenants’ rent. It is simply not right that such companies can take money from people without any responsibility for the property they are running.”
To read the full case background see https://www.supremecourt.uk/cases/uksc-2021-0188.html
Article Abridged from Property Industry Eye
Please note that SWLA membership benefits such as TradePoint 10% off & Trago2Business 15% off are for SWLA members only. If you do not renew your SWLA membership, you will no longer have access to the discounts.
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
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.