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The Bank of England has raised interest rates for the first time in more than three years, in response to calls to tackle surging inflation.
The Monetary Policy Committee voted 8-1 in favour of the increase to 0.25%.
Rates were cut to a record low of 0.1% in March last year in response to the effects of the coronavirus pandemic.
The increase came despite fears that the Omicron variant of Covid could slow the UK economy by causing people to spend less.
The Bank said global asset prices had initially fallen in response to news of the new variant, but had since largely recovered.
The committee also voted unanimously to maintain the Bank’s asset purchase scheme at £875bn.
The last time the Bank raised interest rates was in August 2018, when they reached 0.75%.
They were then cut twice in March 2020 at the start of the pandemic.
Figures issued on Thursday showed the cost of living surged by 5.1% in the 12 months to November, up from 4.2% the month before, and its highest level since September 2011.
Article from BBC News
Homelessness prevention grants are available, click on the bullet point text below for further information;
Article from BBC News; https://www.bbc.co.uk/news/newsbeat-59649129
Ever booked accommodation and turned up to find it’s not exactly what you were sold in the pictures?
Well, that’s just what happened with Jack Simm’s university accommodation, which he described as being like a “building site”.
So, he decided to do what any self-respecting law student would do and took his landlord to court – winning his first ever case with the help of his textbooks.
The 19-year-old was in his first year at the University of East Anglia in September 2020 when he moved into the Velocity Student accommodation in Norwich.
But because he got his university place through clearing he didn’t get a chance to view it beforehand.
“I thought I was going to get what I’d seen on these photos,” he says. “These nice, upmarket student accommodation rooms.”
But when he turned up, it was a different story.
“It was a building site,” he says of the property which was developed by The Freedman Project LLP and managed by Estateducation.
“There were skips everywhere, tradesmen everywhere, hammering the ceiling, hammering the walls. The place was covered in dust from sanding.
“It was almost ironic and funny that people were moving into this place because it looked awful. It was just a bit of a dire state really.”
After a week Jack moved out and stopped paying his rent. Despite being threatened with recovery action by a debt collector, he turned to his textbooks and started building his case.
He collected witness statements, put together the case law and statute law surrounding contract representation, and sued for breach of contract and misrepresentation.
“It was quite easy to be honest,” says Jack, who is originally from Newcastle.
“I studied contract law at the time. To me it was quite an easy case of opening my contract law textbook and looking through some of the relevant law and applied it to the situation.”
He adds: “We sued for our money back our deposit our first month’s rent. They sued for the entire tenancy agreement – around £7,000.”
At an online hearing at Newcastle County Court on 2 November, his dad spoke for him in court, and Jack won what he had paid them plus court fees, totalling £999. The counterclaim was dismissed.
He said it was “great winning” and “really just instilled in me that young people need to back themselves”.
“You just can’t let these landlords win,” he added. “[You’ve] got to take them to court if this happens. Change will happen. The culture needs to change.”
Estateducation declined to comment when approached by the BBC.
Please see the following advice and information to share with your tenants, especially those in shared houses.
The following letter from the Housing Minister is addressed to all landlords, please read to keep you and your tenants informed and updated on ways to keep as safe as possible from catching and spreading COVID-19.
Tenants facing eviction in England are to be protected from losing their homes during the Christmas and New Year period, HM Courts and Tribunal has confirmed.
Between 13 December 2021 and 10 January 2022 no evictions should be scheduled by a bailiff or executed by a bailiff, although if landlords have an urgent eviction they need to book-in following the court process ‘around these times’ then they can alert the bailiff manager of the court in question.
The precise dates around the UK appear to vary slightly.
This is similar to last year, when bailiffs were asked that they should not enforce other than in the ‘most serious circumstances’.
The festive amnesty occurs every year but was controversial last year because it came at the end of an extended blanket ban on bailiff evictions brought in during the worst months of the pandemic. Also, at the time Boris Johnson suggested that it should be extended.
This year’s announcement in England has been rolled out informally through the courts, although officially the normal procedure is for the Lord Chancellor to inform the High Court Enforcements Officers Association which then informs its members.
Article abridged from LandlordZone
https://www.gov.uk/government/news/65-million-support-package-for-vulnerable-renters
Vulnerable renters struggling due to the impact of the pandemic will be helped by a £65 million support package announced by the Department for Levelling Up, Housing and Communities.
The funding has been given to councils in England to support low-income earners in rent arrears – helping to prevent homelessness and support families get back on their feet.
Renters across the country have been protected throughout the pandemic because of government action, including a ban on evictions and a £400 billion support package for the economy.
The extra funding comes on top of the £500 million Household Support Fund, which was announced by the government in September 2021 which is helping vulnerable households across the country with the cost of food, energy, water and other essentials.
Minister for Rough Sleeping and Housing Eddie Hughes MP said:
‘We have taken action throughout the pandemic to support the most vulnerable families, and it is vital we continue to provide support as we enter the winter months. This new funding will support families that are struggling and help to get them back on their feet as we begin to recover from the COVID-19 pandemic. The £65 million will be available through the winter months and households at risk of eviction or homelessness should contact their local council if they require support. The fund recognises the impact the pandemic has had on households in the private rented sector with the lowest income. The government has already provided £310 million to councils this year through the Homelessness Prevention Grant and this funding will increase that grant by a further £65 million this year. £140 million is also available through Discretionary Housing Payments, which can also be used to prevent evictions and help people find a new home. The £500 million Household Support Fund provides £421 million to help vulnerable people in England, with the devolved administrations receiving almost £80 million. The funding is primarily being used to support households with the cost of essentials, although councils have flexibility to best address local needs. At least 50% of the funding is reserved for households with children. It is for councils to determine the best way to support each household on a case-by-case basis. Any payment is likely to be paid directly to the existing landlord, or a new landlord if the money is being used to support a household to find a new home. The government is grateful to landlords for their support and the funding will mean more of them will be able to reach agreements with existing tenants.
For more information, see the gov.uk website or contact your Local Authority
The government intends to bring forward these changes as soon as practicable:
As soon as parliamentary time allows, the government will amend the Smoke and Carbon Monoxide Alarm (England) Regulations 2015. The regulations will be subject to the affirmative procedure and will need to be approved in both Houses of Parliament before they can be made. They will also amend the statutory guidance (Approved Document J) supporting Part J of the Building Regulations. They intend the new requirements to come into force as soon as practicable after the regulations are made. To avoid any confusion, both sets of requirements will come into effect at the same time.
The other recommendations in the consultation paper were concerned with updating the guidance documents on the placement of alarms and type of alarms to use. There was a high level of support in consultation responses for all these measures. They will update the government guidance documents to this effect and the refreshed documents will be published alongside the new legislation.
Article by gov.uk
https://www.gov.uk/guidance/moving-home-during-coronavirus-covid-19
The housing market can remain open. All planned moves and viewings can continue and tradespeople can continue to work in other people’s homes, unless self-isolation restricts access to a property. Everyone involved in the process of letting out a property (letting agents, landlords, prospective tenants) is advised to keep up good hygiene practices, with hand washing and sanitising.
Letting agents and landlords are encouraged to follow the ‘working safely during coronavirus guidance;
https://www.gov.uk/guidance/working-safely-during-covid-19
When in the office, letting agents are required to wear masks. There are no limits on the number of people that can view a property, but virtual viewings are recommended before progressing to an in-person viewing if required, where masks should be encouraged. Thorough cleaning of properties and showing a property when vacant where possible are also advised, to reduce the risk of infection.
Flexibility is encouraged around anyone who may need to self-isolate.
To view the latest COVID rules, please see;
On 30th November 2021 the guidance was updated to reflect changes to the court process for possession introduced by the judiciary relating to COVID-19 case marking, review appointments and priority cases.
We recommend that any landlord who is serving notice to their tenant and applying to court for possession, read the guidance in full and carry out all actions listed in the guidance.
Article by GoSimpleTax
A Unique Taxpayer Reference (UTR) number is a ten-digit code required by all sole traders, partnerships, and limited companies in the UK. It’s unique to that individual or organisation and remains unchanged forever.
You will also need a UTR if you have other forms of income or expenses that require you to file a Self Assessment tax return.
If you don’t have a UTR, you won’t be able to submit a Self Assessment tax return, therefore running the risk of upsetting HMRC. Plus, you may open yourself up to heavy penalties.
So, to help reiterate the importance of UTR numbers and how to correctly acquire your own, we’ve asked Mike Parkes from GoSimpleTax to shed some light on their role in tax return submissions.
What is a UTR?
A UTR helps HMRC identify and process tax returns against the correct taxpayer’s records providing them with a way to match records to payments. They can also use it to monitor for suspicious activity.
The UTR will be needed to complete a Self Assessment tax return, to pre-pay taxes in instalments and to work with an accountant.
Who uses them?
Any individual with self-employed income or income from rental property probably forms the biggest group that will need a UTR.
These individuals will need to perform a Self Assessment tax return. For other taxpayers, it may also be relevant when registering for the Construction Industry Scheme or working with an accountant.
How can I get one?
As you won’t receive a UTR number unless you’re registered as either self-employed or a new business, you’ll need to do so on HMRC’s website. Alternatively, you can call them on 0300 200 3310. There is no cost to doing either.
Be careful if you have already started trading. HMRC expects you to register within at least three months of the end of your first month in business. They will consider strict penalties if you fail to do so.
To avoid such fines, register as soon as you can with all the below information to hand:
Double-check that you have fully completed the process if you’re still waiting on your UTR following registration.
What if I’m already registered?
If you have previously registered or submitted a tax return you could find your UTR easily on numerous documents from HMRC, such as
Previous tax returns, payment reminders, notice to file tax returns, statements of account, the ‘welcome to Self Assessment’ letter SA250 or even stored in software should you use it to file your return.
In addition, your HMRC online account will also display the code, provided you can access it. If none of these options prove fruitful, contact the Self Assessment helpline.
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 saving you ££’s on accountancy fees.
Available on desktop or mobile application.
The White Paper on the Renters’ Reform Bill, (to include proposals for improving Section 8 & abolishing Section 21) has been delayed for release until 2022. It was due for release in Autumn 2021.
As advised in the Queens speech, the Bill intends to “enhance the rights of those who rent”.
In a letter to contributors to the White Paper, the government said the delay would “not only allow us to benefit from continued work with the sector but will also allow us to carefully consider the findings of the National Audit Office’s review of regulation of the sector which is due to report in the coming months”. The government is also actively engaging with tenants – along with other stakeholders – to learn more about their experiences in the private rented sector.
The speech’s briefing notes set out what letting agents and landlords can expect from the reform package and include:
Abolishing Section 21 (known as ‘no fault’ evictions) thus improving security for tenants in the private rented sector, as well as strengthening repossession grounds for landlords under Section 8 when they have valid cause.
Outlining proposals for a new ‘lifetime’ tenancy deposit model that eases the burden on tenants when moving from one tenancy to the next, helping improve the experience of those living in the private rental sector.
Bringing forward reforms to drive improvements in standards in rented accommodation, including by ensuring all tenants have a right to redress, and ensuring well targeted, effective enforcement that drives out criminal landlords, for example exploring the merits of a landlord register and requiring all private landlords to belong to a redress scheme.
Considering further reforms of the private renter sector enforcement system so it is well targeted, effective and supports improvements in property conditions, including a set of measures to hold “bad landlords” to account for delivering safe and decent housing to tenants without penalising good landlords.
Exploring improvements and possible efficiencies to the possession process in the courts, to make it quicker and easier for both landlords and tenants to use.
The proposed legislation would only apply in England.
Article abridged from Goodlord
**SWLA Tradepoint members will get an extra 10% off these deals**
When – Wednesday 1st December 2021 10am
Where – Online
By – Goodlord (please note – this is not an SWLA webinar)
Subject –
• The Regulation of Property Agents (RoPA)
• Renters’ Reform Bill
• Live Q&A with Robert Bolwell (Senior Partner at Dutton Gregory)
If you would like to attend, register here; Lettings legislation in 2022: Looking ahead with Robert Bolwell (goodlord.co)
Wednesday 17th November 2021 at 11am
Ashley Taylor Solicitors will be reviewing the year, to register, click here;
https://us02web.zoom.us/webinar/register/WN_zZssp3BDS3mkJyqFApzRPQ
”A look back at all the subjects we’ve covered this year on our Webinars for Managing Agents and Landlords, a brief reminders of pitfalls and danger signs, rules, regulations and ways to avoid or minimise defences and keep the waters calmer!”
Information from PATH (Plymouth Access to Housing)-
https://frontlinenetwork.org.uk/ – click the log in button in top right hand corner of the page, then click ‘join the frontline network’ . This is a regular newsletter which includes the kind of training that workers in services like PATH do. Including around understanding trauma.
https://www.livewellswacademy.co.uk/courses/ – various training including conflict resolution and mental health awareness. Many courses have a cost involved.
Useful information for landlords: https://www.landlordzone.co.uk/information/how-can-you-support-your-tenants-mental-wellbeing-as-well-as-your-own/
Useful information for tenants: https://www.mind.org.uk/information-support/guides-to-support-and-services/housing/your-housing-rights/
PATH recently did a short survey with landlords and agents who regularly take people from PATH as tenants. They have had feedback that landlords and agents might like training around dealing with tenants (including in shared houses) who have poor mental health.
Poor mental health usually has its roots in trauma. The Trauma Informed Plymouth Network would be happy to offer a free 60 minute Introduction to Trauma course which would cover themes like:
What is trauma
How common is trauma
Signs and symptoms of trauma for individuals and communities
Stress responses to trauma – seeing behaviour as communication
Why an understanding of trauma is important
Responding to trauma with a trauma-informed approach
Please contact Vicky Brooks at vicky.brooks@NSPCC.org.uk if you would be interested in booking a place
Article by GoSimpleTax
There are about 2.66m private landlords in the UK and you could be one of them. Although renting out property can offer excellent returns, it involves a wide variety of expenses, big and small.
Thankfully, as you know, many costs can be claimed as “allowable expenses”, which buy-to-let landlords can deduct from their profits, to help minimise their Income Tax bill. But many buy-to-let landlords fail to claim some allowable expenses, which can leave them overpaying hundreds if not thousands of pounds each year in Income Tax.
This guide provides a basic overview of allowable expenses that you, as a landlord can claim, as well as ones that they may not be claiming.
Here’s what we’ll cover;
• Why buy-to-let landlords often fail to claim some allowable expenses.
• Allowable expenses that HMRC allows landlords to claim.
• Allowable expenses that buy-to-let landlords often fail to claim.
• How property maintenance, repairs and improvements are considered.
• Things that buy-to-let landlords cannot claim as an allowable expense.
Why do buy-to-let landlords fail to claim allowable expenses?
A big reason why some buy-to-let landlords’ allowable expense claim is lower than it could be is poor expense management. Obviously, this commonly includes losing receipts for purchases for which they could otherwise claim. Other buy-to-let landlords deem a cost so insignificant that they don’t think it worth the time or effort to record. But such costs can mount up over the year, so, where allowable, they should claim them all.
Lack of knowledge is the other key reason why some buy-to-let landlords fail to claim their full allowable expenses. They simply don’t know that certain expenses are allowable for tax purposes. In some instances, they might suspect that they can claim, but don’t, because they fear breaking the rules and getting into trouble with HMRC.
Some simple desk-based research can enable landlords to quickly find out which outgoings they can claim as an allowable expense. Some online sources of information are less accessible and reliable than others, which is why advice from a trusted tax professional can make a big difference.
What are “allowable expenses”?
For an expense to be allowable for tax purposes, as you know, it must be generated “wholly and exclusively” for the purpose of trade (in this case, renting out property). So, for example, a landlord cannot claim as an allowable expense a vacuum cleaner that they also use for cleaning their own home.
If they use something for business and personal reasons (eg their mobile phone), they can only claim allowable expenses for the proportion that results from renting out their property.
Some allowable expenses are more obvious than others. For example, a buy-to-let landlord may well know that they can claim for Council Tax, water rates, gas and electricity, if they pay these for the rented property (otherwise the tenant pays them, obviously).
They can also claim as an allowable expense ground rents and service charges, as well letting agent fees and management fees. Landlords’ insurance policies for buildings, contents and public liability can also be claimed as an allowable expense.
Need to know! The introduction of “Section 24” in 2017 removed a landlord’s previous right to deduct mortgage interest and other finance costs (eg mortgage arrangement fees) from their rental income before calculating their tax liability. Instead, landlords now get a tax credit of 20%.
Allowable expenses: what might landlords not be claiming for?
To maintain their property, a landlord may do some gardening, DIY or end-of-tenancy cleaning to save money, rather than paying someone else to do it. However, they can claim such services as an allowable expense, which could save them the trouble.
Landlords can also claim for some legal fees (eg for advice about pursuing a tenant for unpaid rent) and rather than doing their own bookkeeping or tax returns, they could hire an accountant and claim their fees as an allowable expense.
A landlord may be using their own landline or mobile phone for making calls that result from renting out their property. This proportion of their total bill can obviously be claimed as an allowable expense, and the same applies to vehicle mileage costs (eg if they need to travel to their rental property or make any other related journeys).
Some landlords may not realise that they can claim for advertising their property to attract new tenants, or that even relatively small costs, for example, stationery, can be claimed as an allowable expense. They may even be able to claim for costs incurred to dispose of old items of furniture or electrical appliances.
What about property maintenance, repairs and improvements?
Costs landlords pay out to maintain and repair a rental property to ensure that it retains its condition can be claimed as an allowable expense. Common examples include redecorating a property between tenants, fixing a broken window or mending a garden fence. If a landlord claims on their insurance to cover a repair, obviously, they cannot also claim it as an allowable expense. The same is true if their tenant pays for damage out of their deposit.
Replacing baths, washbasins and toilets is allowable, because they’re classed as building repairs, but only if the landlord replaces like for like (ie the quality isn’t superior).
Landlords cannot claim “capital improvements” as an allowable expense. Making capital improvements means upgrading, adapting or enhancing a property so that its value increases, which often involves making a structural change, for example, building an extension or converting a loft.
Need to know! Capital expenses aren’t allowable, so landlords can’t claim for them against their rental income, but they may be able to set them against Capital Gains Tax if they sell the property later on.
What can’t buy-to-let landlords claim for?
As explained on government website GOV.uk: “[Landlords] cannot claim the costs for replacing furnishings or equipment in a [rental] property. These are not allowable as costs of maintenance and repairs, but from 6 April 2016 they may qualify for Replacement Domestic Items relief.”
So, if the property is furnished or part-furnished, a landlord may be able to claim tax relief for replacing such things as sofas, beds, carpets, curtains, fridges, washing machines, sofas, crockery, cutlery, etc, as long as the quality is comparable – not superior.
Buy-to-let landlords cannot claim installing a security alarm system as an allowable expense unless they’re replacing one of a similar standard that was already there. If they’re in any doubt about what they as a buy-to-let landlord can and cannot claim as an allowable expense, you can add much value to the relationship by providing them with sound advice.
About GoSimpleTax
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 saving you ££’s on accountancy fees.
Available on desktop or mobile application.
Article by Go Simple Tax
‘Property Alert’ is an award winning free property monitoring service aimed at anyone who feels a registered property could be at risk from fraud.
Once you have signed up to the service, you will receive email alerts when certain activity occurs on your monitored properties, allowing you to take action if necessary.
https://propertyalert.landregistry.gov.uk/
Article from the BBC; https://www.bbc.co.uk/news/uk-england-essex-59069662
A man has described his shock at returning to his house and finding it stripped of all furnishings after it was sold without his knowledge. Having been alerted by neighbours, the Reverend Mike Hall drove to Luton and found building work under way and a new owner who said he had bought the house.
A BBC investigation found Mr Hall’s identity had been stolen and used to sell the house and bank the proceeds. Police initially told him it was not fraud but are now investigating.
Mr Hall, who was away from the property and working in north Wales, said he received a call from his neighbours on 20 August, saying that someone was in the house and all the lights were on. The following morning, he drove there.
“I went to the front door, tried my key in the front door, it didn’t work and a man opened the front door to me,” he told BBC Radio 4’s You and Yours.
“I pushed him to one side and got in the property. I really didn’t know what he was doing there.
“The shock of seeing the house completely stripped of furniture; all furnishings, carpet, curtains – everything – was out of the property.”
The man said he was doing building work, to which Mr Hall replied: “I haven’t sold the house. This is still my property.”
Mr Hall phoned the police, but the builder left and returned with the new owner’s father, who said he had bought the terraced house in July, adding: “It is now my property. You are now trespassing. Get out.”
Mr Hall said: “We then tried to access the Land Registry documentation online to find out whose name appeared… and it is, in fact, as of 4 August, this man’s name.
“At that point the police said, ‘Well, there’s nothing further we can do here. This is a civil matter; you need to leave the house and contact your solicitors.'”
He then tried to contact police online, but received the same response.
“I was shocked – having seen the house in the state it was, I was in a bit of a state of shock anyway – but then to be told by the police they didn’t believe a criminal offence had been committed here was just unbelievable,” he said.
The BBC put Mr Hall in touch with Bedfordshire Police’s fraud squad, which has begun an investigation. A spokeswoman said there had been no arrests.
You and Yours obtained the driving licence used to impersonate Mr Hall, details of a bank account set up in his name to receive the proceeds of the sale, and phone recordings of the house being stolen.
Once the house was sold to the new owner for £131,000 by the person impersonating Mr Hall, they legally owned it.
The solicitors involved in the property transaction said there was an ongoing police investigation and that it was inappropriate to comment further.
The Land Registry paid out a total of £3.5m in compensation for fraud last year. It said: “We work with professional conveyancers, such as solicitors, and rely on them and the checks that they make to spot fraudulent attempts to impersonate property owners. “Despite our efforts, every year we do register a very small number of fraudulent transactions.”
Thursday 9th December 2021 – 9am – 12:30pm
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 Covers –
Places secured upon receipt of payment, book your place through the office 01752 510913.
Course will be instructed by Stephen Fowler from Training for Professionals.
Private and commercial bank Arbuthnot Latham has set out what it considers to be the 10 easy mistakes which some landlords make.
It says the some, perhaps more recent, investors have considered buy to let to be a relatively easy investment, yet more experienced hands know better.
Here’s the bank’s top 10 easy errors…
1. Minding your own business – The bank says: “Whether you are doing it for the first time or are a portfolio landlord, it is important you keep on top of your record keeping. Good record keeping not only helps you keep track of income and outgoings, but it is also important for staying on top of administrative tasks, like when insurance renewals are due. It can also be a lifesaver if you are unfortunate enough to face a tenant dispute.”
2. Planning for periods with no rent – “It is fair to say you will experience periods when your property is vacant; generally, this is after one tenancy has ended and you are advertising the property for new tenants. If you manage it well, you may have a new tenant lined up to move in soon after the previous tenant leaves, but you cannot assume this will happen. On average, a house will be vacant for up to 4 weeks a year. You need to allow for this either by holding a contingency sum in your bank account or by retaining the surplus rent, after mortgage and other costs, in the account to cover you when no rent is coming in. As a minimum, it is worth holding the equivalent of three month’s rent to help you through these periods.”
3. Thinking ahead, allowing for unforeseen costs – “You need to think about the costs associated with a rental property. Not just the mortgage, but insurance, maintenance and the costs involved with keeping up to date with legislation, such as current energy efficiency requirements and gas safety certification. Have your contingency fund available to cover this, and as with vacant periods, think about keeping it topped up by retaining surplus rent in your bank account.”
4. Dealing with the tenant deposit correctly – “If you do not deal with the tenant deposit correctly you open yourself up to being fined. Legislation is quite strict around this area, so it is important you are familiar with procedures and the paperwork you need to provide to your tenant. Make sure you have thoroughly checked the property before handing it over to your new tenant. Draw up a detailed inventory (take photographs) of the property and any contents included in the rental agreement. Provide a copy to your tenant before they move in.”
5. Carrying out regular inspections of the property – “By undertaking a regular inspection, you have the opportunity to check the property to ensure it is being looked after, but this can also give you the opportunity to catch up with your tenant. Not only does this allow them to draw any issues to your attention, so you can deal with them before they become a major problem, but also gives you the chance to check on them, find out about their work situation and any plans for the future. You may come away with a view that they are planning to stay longer term or may be struggling financially.”
6. Allowing for buy to let tax changes – “You should be aware of tax changes brought in over the last few years and how this may impact your income or ability to raise the level of mortgage you are seeking. Taking advice from a specialist tax accountant before you commit to buying a property is crucial. Not only will this help you understand your allowances and liabilities but may also help you decide how you buy the property (in personal names or a limited company vehicle) and any potential implications on your other income.”
7. Low Rental Yields – “Rental yield is a percentage figure calculated by taking the annual rental income and dividing this by the amount you have invested in a property. It is worth doing your homework to get an idea of the level of yield you can expect to achieve on the property type and area you are looking to invest in. For instance, two smaller properties (e.g. two or three-bed terraced houses) may provide a better yield than if you invest the same amount in one larger four + bed house. This will also drive the amount of borrowing that you can have on the property as this is assessed on the income the asset produces rather than a loan-to-value request.”
8. Choosing the right location – “Location, location, location – it’s a fact that you need to think about the location when purchasing a property to rent. Get to know the area and its reputation. Think about your future tenant and if the property is right for renting in that area. If you choose an area with a poor reputation or poor transport links, you may struggle to achieve the rent you are aiming for. Another consideration: Is the property type right for the location? For instance, an HMO in an area with little need for this type of property is less likely to provide you with a good return on your investment than if it were near a university.
9. Meeting the tenants or vetting them properly – You have invested a large sum of money in your property and are about to entrust it to a stranger. If you are using an agent, do your research. Are they reputable? Yes, you want to make sure your relationship with them is good, but do they treat tenants properly as well? If the tenants are happy, they’re likely to take better care of your property. Similarly, it is good practice to make sure potential tenants are vetted properly, ideally you should meet them yourself before you commit to the tenancy. It is worth finding out a little about them and their reasons for the move. Also, if you can begin to build a relationship with them it will help for the future.
10. Choosing the right insurance cover – “Insurers look at a buy-to-let property differently to owner-occupied homes. You will need specialist landlord cover, as standard household insurance is unlikely to cover your rental property. Insurance cover not only considers the building (and contents if you are letting a furnished property) but other risks such as periods when it will be vacant or if serious damage is caused by your tenant. Having the right cover in place now, could save you from substantial cost in the future.”
Article from Landlord Today & Arbuthnot Latham Bank
Article from gov.uk; https://www.gov.uk/government/news/clampdown-on-landlords-with-funding-boost-for-councils
Families living in cold draughty rented properties in England and Wales can expect warmer homes thanks to a new campaign to help councils clamp down on landlords.
Over 40,000 families living in cold and draughty rented properties across 59 local authorities in England and Wales can expect warmer homes thanks to a new campaign to help councils clamp down on errant landlords.
Since April last year privately rented homes must meet a minimum energy performance rating of EPC Band E, making it illegal to rent out homes below that unless landlords have a limited exemption. Landlords caught failing to fulfil their obligations can be fined of up to £5,000 per property and per breach.
Badly insulated properties often leave those renting their homes struggling to keep warm and with higher energy bills. The rule change is expected to see energy efficiency upgrades such as loft insulation, double glazing and cavity wall insulation being installed by landlords in around 290,000 properties – with an estimated average bill saving of £180 a year for each home. This move forms part of the government’s actions to protect consumers, particularly those on lower incomes, as we manage the impact of global gas price rises.
The £4.3 million of extra funding from the Department for Business Energy and Industrial Strategy (BEIS) to councils across the country is designed to support them make an extra 100,000 engagements with the most difficult to reach landlords with the worst performing properties.
The money will support innovative measures including local radio ads, roadshows and workshops with landlords to raise awareness of the rules, free property surveys, as well as enhanced and targeted mail reminders and translation services to reach those not currently complying. One council will even invest in a drone with thermal imaging capacity to help with on the ground inspections.
Business and Energy Minister, Lord Callanan, said:
This funding will help councils to support landlords with these important energy efficiency changes, but also enforce these standards, helping tackle fuel poverty and ensuring everyone can live in a warm home with fair energy bills.
Heating our homes and buildings makes up almost a third of all carbon emissions, meaning raising the energy efficiency of our properties is something we all have to contribute to help us build back greener and reach our world leading climate ambitions.
Deputy Council Leader of Darlington Council, Jonathan Dulston, said:
We know that the vast majority of private landlords stick to the rules and provide good accommodation, but we are determined to crack down on rogue landlords who do not care about their tenants or the standard of their properties.
These new powers will improve the energy efficiency standards of private rented homes both here in Darlington and across the country, which will in turn improve residents’ health, ensuring people do not live in homes that are cold and damp.
To further support private landlords, as well as the overall UK property market, the government has also announced today a new £10 million innovation programme, dedicated to developing world-class energy efficiency products and green finance services – equipping homeowners with new options to decarbonise their homes in a more cost-effective way.
The new Green Home Finance programme, part of the £1 billion Net Zero Innovation Portfolio, will support high-street lenders, financial technology businesses, energy suppliers and others to pioneer world-class innovation into new products which will make it easier and more affordable for homeowners to switch to low carbon heating. This is likely to include piloting cutting-edge heat pumps, glazing and insulation, as well green finance services such as green mortgages and green equity releases.
The investment comes as ministers this week unveiled the government’s Heat and Buildings Strategy, which commits to all new heating appliances installed in homes and workplaces to be low-carbon technologies to help ensure the nation’s buildings are fuelled by clean energy by 2035, as well as bringing down the costs of clean alternatives so they are no more expensive than gas boilers by 2030.
Minister of State for Energy and Clean Growth, Greg Hands, said:
Ensuring our buildings and homes are powered by clean energy is an essential step we need to take in order to meet our target of reaching net zero emissions by 2050.
The UK government is stepping up to the challenge with a new Green Home Finance programme to help drive forward the development of cutting-edge green finance products and services for homeowners that will not only transform the nation’s green property landscape, but also help create more green jobs, as we build back greener.
The government has set 2035 as the target for all homes across the UK to reach EPC C by 2035 and is currently spending £1.3 billion on improving the energy efficiency of 50,000 low-income local authority homes, through the successful Local Authority Delivery Scheme. Measures include cavity wall, underfloor and loft insulation, and replacing gas boilers with low carbon alternatives like heat pumps.
To help consumers further, BEIS has announced plans to trial automatic switching for customers on expensive default tariffs to cheaper deals, and are extending the Warm Home Discount so an extra 750,000 households get £150 knocked off their bill each year.
Thank you to all of our members who attended our meeting last night.
We had two excellent speakers join us – David Aggiss from Three Sixty Mortgages with his presentation; “2021: What a Year – the changing BTL/Investment Lending Landscape”. We also had Jeremy Wood from Excaliber Insurance discussing landlord insurance, the common pitfalls and how to avoid them.
We look forward to our AGM in January which will be in person at The Future Inn hotel. A notice of the AGM will be sent to all members nearer the time.
‘Lagging behind – energy efficiency in low viability properties’, a report released on 21 October, raises concerns over the affordability of retrofitting properties.
We urge the UK Government to give serious consideration to the impact of regional variability in house prices and dwelling stock when installing heat pumps to hit decarbonisation targets.
Failure to factor in huge regional variations in property prices when incentivising homeowners and landlords to retrofit their properties to meet national net zero targets could risk seeing a reduction in the quality and availability of housing stock.
According to the report, in some local authority areas of the north and midlands, the estimated costs of improving home energy can be around 25 per cent of property values, while in affluent parts of London and the south east retrofitting with heat pumps represents less than 2 per cent of overall property value.
For example, in the red wall constituency of Burnley, where nearly four-in-five dwellings need to attain EPC Grade C standards, standard retrofitting costs of £24,000 are equivalent to a quarter of median house prices of £99,500. However, in the Royal London Borough of Kensington and Chelsea, where median house prices are £1,317,500, retrofitting costs are equivalent to a mere 1.8 per cent of overall property values.
The UK Government announced their ‘Build Back Better’ initiative in 2020, however, the policy presents problems for the private rented sector where properties are of low value, landlords are unlikely to have either the rental income or equity to finance upgrades. Furthermore, homeowners in such areas on low income have no incentive to fund expensive improvements that add no value to the property.
The Report was dissected and discussed by a panel of guests including Roz Bulleid, Deputy Policy Director, Green Alliance, Cllr David Simmonds MP, Chairman, All Party Parliamentary Group on Housing and Planning, Erin Walsh, Director of Built Environment, Connected Places Catapult.
Two prominent themes arose, which are – behavioural change and consumer choice and awareness. Targets based on property type, not tenure were also cited.
The Heating and Building Strategy aims to help homeowners make the transition to low carbon heating, however, in order to properly address the retrofit challenge it must:
Other report recommendations include calls for:
https://www.localis.org.uk/wp-content/uploads/2021/10/040_LaggingBehind_PRF3_HR_Final.pdf
Article Abridged, by Propertymark
The following guidance has been updated; Guidance for landlords and tenants – GOV.UK (www.gov.uk)
For further information on the withdrawal of the pilot, read here; [Withdrawn] Rental Mediation Service – GOV.UK (www.gov.uk)
SWLA Tradepoint card holders receive an extra 10% off the deals below;
On 01 October 2021, the government updated their guidance to reflect recent changes to possession notice periods. The document is well worth a read – lots of valuable information for landlords and agents.