Will you be forced to repay rent to your tenants?

view to let and for sale signs, typical of signs landlords would look for

Yet more anti-landlord legislation starts to become operative this April (2017). This one is unimaginatively called The Housing & Planning Act 2016.

How does it affect landlords? Will YOU be forced to repay rent to your tenants?

If you are found guilty by a tribunal of any of the following offences you can be ordered to pay back up to 12 months’ rent…

  • Failing to comply with an Improvement Notice under section 30 of The Housing Act 2004.
  • Failing to comply with a Prohibition Order under section 32 of The Housing Act 2004.
  • Any breach of a banning order made under section 21 of the Housing & Planning Act 2016 (this act)
  • If you use violence to gain entry to a property under section 6 of the Criminal Law Act 1977.
  • If you illegally evict or harass the occupiers of a property under section 1 of the Protection from Eviction Act 1977.

Making an example of transgressing landlords

The above applies whether you are receiving rent direct from a tenant or wholly or partly from the local authority. The act also states that tribunals need to take deterrence into account when fining landlords and urges making examples of transgressors to dissuade others.

Either your tenant(s) or the local authority can apply for Rent Repayment Orders.

These powers come into effect on 6th April 2017.

The main points of the new laws are…

• Civil penalties of up to £30,000 as an alternative to prosecution for certain specified offences.
• Extension of rent repayment orders of up to 12 MONTHS’ rent, to cover illegal eviction, a breach of a banning order and certain other specified offences (coming into force on 6 April 2017);
• There’ll be a database of rogue landlords and property agents who have been convicted of certain offences or received multiple civil penalties (scheduled to come into force on 1 October 2017);
• Banning orders for the most serious and prolific offenders (scheduled to come into force on 1 October 2017).

The full dreary details are here.

Landlords and Letting – Affordable Landlord Insurance

 

Landlord Taxes – Is this REALLY a Conservative Government?

image of George Osborne as Boy George

Boy George and landlord taxes

When Boy George was Chancellor under the Cameron government, he introduced a whole new raft of landlord taxes aimed at ‘helping first-time buyers get on the property ladder’. But did he really want to help them? The PR theme was that demand from landlords was making it difficult for first-time-buyers to enter the property market. And as usual it had a nice ring to it.

However, I would assert, as I have before, that George was more interested in letting the City have a bigger piece of the Buy To Let Pie as the new rules did not hit large corporate bodies in the same way as small private landlords – Prudential has bought into it in a big way.

Mother Theresa dismisses Boy George

Then we all breathed a sigh of relief when Boy George was sent packing by Mother Theresa and welcomed the somewhat less boyish Phillip Hammond, assuming he would actually start acting like a Conservative chancellor. Well it seems we rejoiced too soon, because so far he still seems keen on more landlord taxes and is continuing with the policies of scrapping of tax relief for interest on buy-to let mortgages and the increased Stamp Duty for buy to let properties.

They now talk about ‘level playing fields’ – don’t politicians love metaphors? They say that mortgage tax relief for landlords gives them an unfair advantage over first-time buyers. They forget that the incredibly low interest rate environment and mass immigration has meant that buying to let is just about the only game in town that’s left for individual investors. Also, they forget that when you sell a buy-to-let property, unlike permanent private residence, you have top pay a shed-load, or rather a house-load of Capital Gains Tax. But then again, the MPs Expenses’ Scandal showed they knew only too well about the importance of flipping a property to avoid CGT.

No Opposition at All

The thing is that Mother Theresa and her chums are no longer faced with any opposition at all. Jeremy Corbyn has managed to effectively reduce Labour to a student debating society in which Diane Abbott seems to be an all purpose minister for just about anything and probably even handles any small plumbing emergencies at Labour HQ. By claiming he was present at many events he wasn’t and knew people he didn’t, Paul Nuttall managed to snatch defeat from the jaws of victory for UKIP in the Stoke by-election. And the Liberal Democrats…well they’re still very Liberal and Democratic and that’s about it.

So, the Conservatives realise that Landlords represent a very small section of their natural constituency, have become folk villains, have nowhere else to turn and as such their wishes can be safely ignored.  They are now going for the ‘middle-ground’ to further increase their majority by tempting soft Labour voters away from Jeremy.

Residential Landlords Association

As I write this, the Residential Landlords Association (RLA) have mounted a last ditch attempt before The Budget to persuade Chancellor Phillip Hammond to scrap Boy George’s tax changes that stop landlords being able to offset mortgage interest against income from buy to let properties.

Let’s wish the RLA luck.

 

Landlords and Letting – Affordable Landlord Insurance

Britain’s Zero percent APR Addiction

image of Britain addicted to zero percent APR, showing map of country on a zero percent drip

UPDATE June 28th – Now Mark Carney agrees with me!

Britain today is addicted – addicted to cheap credit

Britain’s zero percent APR addiction entails endless adverts for cars, vans, furniture, white goods etc where you are charged zero percent interest and they even contribute towards your deposit! At the same time nobody is really interested in you paying up front for anything and savers are lucky to get over 1% on their savings. No wonder so many older people almost feel forced to enter the buy-to-let market and many young people have given up on saving.

It’s now almost pointless to hold large sums of money on deposit. It’s true that we are warned by Mark Carney and others on a regular basis about what might happen ‘when interest rates rise’. But maybe they never will – at least not in the medium term, because our whole economy is hopelessly addicted to cheap credit – that goes for the car industry, manufacturing and indeed the property market.

How did we get here?

The main source of our current addiction leads back to the financial crash of 2008, when the banks – mainly American, nearly trashed the world economy. Following that crash it was necessary for government and banks to progressively lower the rate of interest just to keep the economy turning over. This has been true the world over but it is particularly critical in Britain where a disproportionate  amount of the nation’s cash is locked up in property. Thus the very roofs over British people’s heads depend upon the perpetuation of cheap credit – not to mention the existence of the likes of B&Q and Homebase.

However the other main reason is the massive suppression of ordinary people’s wages over the past 20 years or so, due largely to mass immigration, the increased power of directors and the decline of trades unions. Employers can literally pick and choose employees, whilst offering them absolutely paltry wages. Thus the only way employees’ purchasing power can be maintained is with cheap and widely available credit. Enter the enticing Zero Percent APR.

The Property Market

The fall in interest rates is indeed worldwide, but because we in Britain have such a love affair with property ownership it has drastic effects on the housing market here. Many older people who would have once tucked their savings away in their local building society now feel almost forced to jump into buy-to-let, where yields of 6% are fairly easily attained. This in turn drives up demand for property, putting it even further out of the reach of the majority of younger people. When I was young it was fairly normal to buy your first property in your late 20s but now many are having to wait until their late 30s or even 40s before they can ‘get on the property ladder’.

You would assume that because mortgages are so cheap that younger people would be able to afford them but because of the traumatic experience of easily available mortgages before 2008, banks and building societies tend to look for relatively high deposit to loan ratios.

So will interest rates ever rise?

Obviously no one has a crystal ball, but as I have said, I certainly believe they will not rise in either the short or the medium term – maybe 10 years. Chronically low interest rates and quantitative easing mean that money itself is losing its value and that is a very dangerous thing. Perhaps if there is a change in the employment market where people are actually paid more realistic wages then this could eventually begin to turn the tide in the opposite direction. Maybe in many years time interest rates may at least climb to 3 or 4% and people might start saving again – who knows?

 

LandlordsandLetting – affordable landlord insurances.

 

The Reluctant 60 plus Landlords

OldLandlord

There is endless wailing about how greedy buy-to-let landlords are snapping up properties from under the very noses of young first-time buyers.

Hardly a day goes by without some hand-wringing politician (usually Labour) telling us that if only it weren’t for those awful buy-to-let landlords more young people could afford their own place to buy.

Who are the culprits?

Many of these avaricious landlords are actually over 60 and most of them probably don’t want to be landlords at all!

ForSaleSigns

But now that they see their savings being trashed by Mark Carney’s quantitative easing (a wonderful euphemism) and historically low interest rates, so they need to find other ways to make their money work for them.

The other options

They can of course put their cash into poorly performing funds with heavy management charges. Buying shares and bonds is an option but it does require a certain amount of specialised knowledge and you have to actively manage the portfolio. Added to this, there is quite a downside risk as they say.

The landlord option

Buying rental property is an obvious solution. You can easily get at least a 5% yield on your money and you’ll probably get some nice capital appreciation into the bargain. And it’s a physical asset – it can’t just disappear, as many people’s savings did in 2008.

But there’s a downside – there’s always a downside isn’t there?

Being a landlord, unless you are lucky, is NOT an easy option. Take one look at the TV series ‘Nightmare Tenants and Slum Landlords’ and you can see what I mean. For landlords whose tenants cannot or will not pay their rent, it is an absolute nightmare indeed, involving months of legal nonsense and Possession Orders and bailiffs etc etc.

Some of the consequences of bad tenants can be mitigated by taking out landlord rent guarantee insurance but even that can’t completely take away the stress.

What’s more, the government has in recent years made being a landlord much more difficult. There are endless legal hoops that a landlord has to jump through to ensure he or she does not fall foul of the law. Fail to properly protect the deposit or even fail to notify the tenants can mean you will not be able to secure a Possession Order if necessary.

On top of all this are the constant management problems involved with being a landlord – repairs, disputes with the managing agents etc etc.

Enter the Reluctant Landlord

So, there are many 60 plus landlords who would far rather just tuck their savings into the local friendly building society or bank like their parents did. But they cannot – unless they want to see their savings dwindle away to nothing.

Interest Rates

Late last summer (August 2016) the Bank of England lowered the bank rate to a ludicrous 0.25% from the almost ludicrous 0.5%.

Quite rightly they want to stimulate the economy – although there may be some political posturing by Mark Carney over the result of the EU Referendum (little bit of politics as Ben Elton used to say). On top of this they are going to increase quantitative easing AGAIN. It’s a bit like a heroin addict who keeps needing ever greater doses to keep going.

The Law of Unintended Consequences

This is one of my favourite laws. By stimulating investment by lowering interest rates, the government and Bank of England (and everyone) are virtually compelling many pensioners and pre-pensioners to buy rental property. This demand pushes prices property prices up further and means that young first-time buyers don’t stand a chance of ‘getting on the property ladder’ as they say.

I do think that the Bank of England need to consider whether they are just going a bit too far in this rush to stimulate the economy with cheap money. Apart from anything else it does sound a note of desperation – and that’s never good for business confidence.

Malcolm James Stretten

 

Landlords and Letting – Affordable Landlord Insurances and Advice

 

 

Can you afford NOT to have landlord rent guarantee insurance?

NightmareTenantsSlumLandlords

Image Copyright Channel 5 – link no longer working

As buy-to-let has increased massively across the UK, partly due to the lamentable return on other kinds of investments, so too have the horror stories of nightmare tenants. First they suddenly stop paying the rent and when the hapless landlord finally evicts them, he or she is faced with possibly several thousands of pounds repair bills.

As a landlord, even if you’ve been lucky enough to avoid these vile people you probably know of others who have fallen prey to nightmare tenants. Just take a look at ‘Nightmare Tenants, Slum Landlords’ on Channel 5 and you’ll see dreadful cases of how a small minority of tenants can make life an absolute hell for small-time landlords.

Landlord Rent Guarantee & Legal Expenses Insurance

Admittedly there are also rogue landlords out there who equally make life hell for their tenants but that’s not what this article is about. This article is in fact about the importance of taking out Landlord Rent Guarantee and Legal Expenses Insurance – rogue landlords don’t need this insurance as they use other rather more direct methods!

In fact, the problem IS rogue landlords because I believe that it’s because of them that the law is absolutely on the side of tenants when it comes to eviction.

Firstly you need to have approved grounds for evicting the tenants, usually non-payment of rent or anti-social behaviour in your property. Then, if they won’t go voluntarily, you need to serve a Section 21 Notice.

And a Section 21 will only be regarded as valid by a court so long as the landlord has properly protected the security deposit and complied with various other procedures that now cover the commencement of any tenancy.

A Section 21 cannot be served during the first four months of tenancy. Once a Section 21 is served the tenants must be given two months notice to quit. If they fail to leave then you need to seek a Possession Order – this can easily add another month and then if the tenants ignore the Order you’ll have to spend more money and time getting bailiffs to physically evict the tenants. And in this case you should always upgrade the Order to the High Court so as to make use of proper bailiffs.

It could easily cost you around £6000.00

So, all in all it could take at least four months to evict bad tenants and often longer! In all that time you will be losing rent and ranking up legal costs. On an average property this could easily amount to well over £6000.00!  And then you will probably have extra refurbishment and cleaning costs to deal with the mess that’s left.

We are agents for Landlord Rent Guarantee & Legal Expenses Insurance, but even if we weren’t, I’d still say that at only £99.95 per property for 12 months’ cover it’s incredible value.

To maintain this low cost, tenant referencing is a condition of this insurance and it’s important to follow the correct procedures relating to taking and protecting the security deposit. If you need more information about this insurance and/or referencing just email us at info@landlordsandletting.co.uk

However, even if the tenants seem nice, strict referencing should ALWAYS be carried out whether you are taking out rent guarantee insurance or not.

What does it cover?

The premium covers your rent up to a maximum of £3000.00 pcm, with a maximum payout of £25000.00 per claim and covers up to five named tenants in the same property. After the first month your rent will be paid per month and our legal team will get to work to evict the tenants as soon as possible and, if appropriate and possible, recover costs to cover damage not covered by the security deposit. You also have the option to have your rent paid without the one month ‘grace’ period – this costs a little more at £129.95 for 12 months.

So, can you really afford NOT to have this insurance?

 

Landlords and Letting  – Affordable landlord insurances

 

 

Block insurance – why you may be being overcharged

blockofflats

Block Insurance is essentially the overall buildings cover for blocks of flats. It covers risks to the basic structure. Essentially it is bought by the managing agents, the freeholder or whoever has overall responsibility for the block’s structure. And often leaseholders are paying over the odds for it and sometimes they can do something about it.

Can YOU choose who provides your block insurance?

Virtually all flats, whether in purpose-built blocks or conversions, are held in leasehold. The leaseholder has the property for the term of the lease (99 – 999 years) after which it reverts to the freeholder. In between these two parties there is usually a managing agent. Usually it is the managing agent who selects the block insurance for the property.

Sadly, if you have no control over the management of your block it is often the case that the freeholder/managing agent actually know they are paying too much for the block insurance. I’ll leave it up to your imagination why this might be.

Take back control (to coin a phrase!)

However, if you DO have ultimate control over the managing agents then this article may be of interest to you. It’s worth checking that you and the other leaseholders are not paying more than you need to for the block buildings insurance. Certainly if you have a share of the freehold then you should speak to the directors of your residents’ company and check that you and all the other residents are not ‘paying over the odds’ for your insurance.

We offer very competitive rates on block insurances and all the policies are underwritten by major insurers.

Why not get a quote today. Either email info@landlordsandletting.co.uk or call 0800 783 1626, quoting ‘Landlords and Letting’.

Landlords and Letting – affordable landlord insurances

 

 

After Brexit, George gets his P45 – time to reverse anti-landlord taxes?

0sborne_P45

In April this year, a raft of anti-landlord measures came into force – courtesy of George Osborne. There was the increased Stamp Duty hike of 3% on buy-to-let properties and the beginning of the phasing out of interest on buy-to-let mortgages as allowable business expenses for landlords. The latter, I believe, is currently being challenged in the courts.

Now George is gone and Brexit’s here

I for one was pleased that Mr Osborne was given his P45 by Theresa May in the tumultuous weeks that followed our decision to leave the EU. I think he had it coming but maybe that’s just me being spiteful!

Personally, I am pretty sure that although Osborne’s tax changes were sold as help for first time buyers, they were really aimed at giving The City a piece of the buy-to-let pie. This is because some of the legislation specifically excluded large scale investors and of course large financial institutions are not as dependent on borrowed money as are small-time landlords.

Uncertainty is now adversely affecting the property market

The RICS and other institutions are now reporting a significant slowing of the property market following the decision to begin leaving the EU. How long this uncertainty will last is anyone’s guess but it’s a given fact that uncertainty almost always affects markets badly. And since the negotiations are going to be long and complex this uncertainty probably won’t be short-lived. Add to this the fact that, assuming we do get a significant reduction in immigration, demand for housing will slacken. I personally would welcome this, even though it might hurt my pocket, because the UK really is becoming uncomfortably overcrowded and the quality of life really is being affected.

It’s time to reverse Osborne’s tax changes

The phasing out of mortgage expenses as an allowable business expense was an outrage and, whilst I agree with the extra 3% on second or additional homes, it is wholly unjustified to penalise people who buy property to let in this way, and for many it is their main livelihood.

The fact is that Brexit has naturally caused great uncertainty and that uncertainty has caused a slowing in the property market, so I think it would not only be right to reverse Osborne’s outrageous tax changes but it would also be financially prudent.

Malcolm James Stretten

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New Government Plans for Future Buy-To-Let Landlord Laws?

Now Theresa May’s government has its sights set on The Evil Landlord.

NOTE: None of these new regulations are expected to apply to limited companies holding more than 100 properties.

After Dave and George had exhausted benefits claimants and the disabled as their chosen targets for blame, they found Buy To Let Landlords, who are now fast becoming the nation’s favourite bêtes noir, after bankers, estate agents and journalists of course. Now Theresa May’s government is following in the footsteps of its predecessor.

Following the current torrent of anti-landlord legislation from our so-called Conservative government, these are some futuremeasures I can imagine being considered by The Treasury and the Ministry for Communities and Local Government, plus a new government quango being set up – see below.

2019. Psychological Assessments for Landlords
This will make it mandatory for all existing and prospective landlords to undergo Psychological Assessments for Landlords (PAL) to verify their fitness to be a landlord. These will take up to two hours, to be carried out by qualified Government Approved Psychologists. Cost estimated at around £490.00 plus VAT. Note that private landlords will not be able to claim back the cost of these PALs and furthermore they will not be an allowable business expense.

The tests themselves

The tests will include the famous word association test where subjects are asked to interpret what they see in random ink blot shapes. For example, they will be shown a photo of a student and if they say something like, ‘Cash cow to be exploited and degraded at every opportunity’ or something to that effect they will be marked down.

Where landlords fail the tests, in some cases they will be offered ECT (Electro Convulsive Therapy). This would be supervised by qualified psychiatrists and could last a fortnight and cost up to £7400.00. At the end of this they could then re-take the PAL – if they were still conscious that is.

Those that refuse the PAL will be required to sell their properties within 12 months or face an additional surcharge of 15% CGT, or a maximum of 6 months Community Service, whichever causes them the greater suffering.

2019. Mandatory CRB Checks for Residential Landlords

All existing and prospective (if there are any by then) landlords will be forced to undergo a full Criminal Records Bureau check.

Projected for 2020. New maximum age limit of 55 for all new landlords

No one over the age of 55 will be allowed to become a landlord and all those currently over that threshold age will be required to dispose of their existing properties within 12 months. Those not doing so will be subject to a 15% CGT levy or a maximum 6 months imprisonment.

Landlords who fail the PAL (see above) will also be required to walk around a designated local area for up to 4 hours over a period of one week, carrying sandwich style boards with big red lettering saying ‘I AM A LANDLORD AND I AM AN UNFIT PERSON’.

Authorised people, ie local government officers, MPs, members of Generation Rent and registered tenants will be allowed to pelt them with rotten eggs and tomatoes – no solids will be allowed. In some cases it will also be permissible to beat landlords with rolled up copies of The Guardian or New Statesman – but not both at once.

Rent Controls

Before any flat or house is let, a local authority officer will be required to inspect it and set a maximum rent for the next 12 months.

A Rent Assessment Visit (RAV) will take place within 2 months of application by the landlord, at a cost of £275.00 per property.

This, combined with all the other anti-landlord laws is expected to lead to a decrease in available rented accommodation and thus a consequent rise in demand over supply. So, anticipating this, where a landlord is advertising a property for what will be far below the market rent and receiving applications of more than 500 prospective tenants, then the landlord will be required to raffle the property or alternatively arrange a 100 metre sprint to see which of the prospective tenants shall be permitted to rent it.

Penalties for Landlords

Penalties for transgression of any of the above will range from an extra 15% CGT on the disposal of a buy-to-let property, to fines of up to £20,000 or 4 years’ imprisonment. Boroughs will also be allowed to set up Landlord Pillory Facilities where repeat offenders will be chained for up to 24 hours while rotting vegetables, soft fruit and insults will be hurled at them.

Bureau for the Administration of Landlord Legislation and Supervision (BALLS)

From 2020, the Government is proposing to set up a new quango called the Bureau for the Administration of Landlord Legislation and Supervision (BALLS), with an expected staff of 4000 people. BALLS will oversee all this new legislation and will consider future controls should they be deemed necessary.

I know it all sounds far-fetched but back in 2000 so would all the anti-landlord legislation that exists today.

Landlords and Letting – Affordable Landlord Insurance

 

Osborne bashes buy-to-let to boost his City pals

GeorgeOsborne

I trust that by now most small buy-to-let landlords will have woken up to the fact that Osborne and the so-called Conservative Party are out to get them.

Before the last election we all feared that Ed and his Band of Brothers would get in and introduce more anti-landlord legislation. We all hoped that shiny face Cameron & Co would ride to our rescue. But as the old saying goes, be careful what you wish for!

The Tories’ Anti-Landlord Legislation – Where we are now

These are the main anti-landlord changes that have been introduced by this ‘Conservative’ Government since they won the last general election, admittedly courtesy of the undemocratic first-past-the-post system…

  • A gradual reduction in the allowable financial costs of purchasing and owning, particularly mortgages, a buy-to-let property. By 2020 relief will only be available at the 20% rate, no matter what your total taxable income.
  • And in Osborne’s Autumn Statement from April 2016, he outrageously increased the Stamp Duty Land Tax (SDLT) by 3% specifically on buy-to-let properties and additional home purchases. So for example, the marginal SDLT on a property costing £400,000 will increase from 5% currently to 8% – on buy-to-let and additional property purchases only. The marginal rate above £250,000 for non buy to let purchasers will still amount to £7500, but for the Evil Buy To Let Investor it will be £12,000.
  • Landlords will have to pay any CGT due on selling an investment property within 30 days, as opposed to the current arrangement where it is in the January following the tax year of disposal.
  • And the tell-tale bit… Commercial Investors with more than 15 properties are expected to be exempt from Osborne’s changes.
  • Finally, although not directly instigated by central government, many local authorities (Labour and Conservative) have introduced compulsory registration schemes for private landlords. They pretend these schemes are designed to root out rogue landlords but in reality they are of course just more money making schemes because they charge landlords for registration.

‘I want to help more young couples buy their own home’

So kindly uncles George and Dave are really concerned about struggling first-time buyers are they? These are the same people who introduced draconian reductions in benefits for people on Disability Living Allowance, introduced a poorly conceived so-called ‘bedroom tax’ and wanted to strip away tax credits from people on very low incomes before any increase in the minimum wage kicked in. True, Osborne backed away from this in the Autumn Statement, but only because of huge opposition from both inside and outside the Conservative Party.

The fact is that PR politicians like Cameron love to use phrases like ‘more help for working families’, ‘getting more bobbies on the beat’ and ‘helping struggling first-time buyers’.

So what is REALLY going on?

It is my firm belief that the Conservatives are just trying to help their friends in The City and dressing it up as wanting to help first-time buyers, by hitting the Evil Buy To Let Investor, who has for years now become completely demonised.

The Tories and others claim glibly that buy to let investors are now the main cause of the unacceptable rise in the cost of owning your own home. No they are not. The causes are complex and based mainly on supply and demand. Not enough homes are being built to satisfy an out of control demand for all kinds of housing, caused mainly by uncontrolled immigration. But at the same time if we just build more homes without the related infrastructure then the country will literally grind to a halt and become a hideous place in which to live. Finally, the reason so many older people have been resorting to buying to let, is the ludicrously low rate of interest they can get by leaving their savings snoozing in the bank or trapped in a poor performing pension fund.

You see, for years now the big City institutions have been jealously looking at the level of returns private investors have been getting in the buy-to-let market. This has naturally choked off money that would otherwise have gone into their pension schemes and rip-off investment funds – where they earn high management fees.

On a personal note, I am not opposed to making life more expensive for people who wish to indulge themselves in second homes. But I am totally opposed to this continued demonisation and financial attacks on people who have bought property to let out as their business. Just increase interest rates and you’ll soon see people backing away from buy to let with all the stresses it can entail.

In short, The City wants a piece of the Buy-To-Let Pie, and Osborne plans to give it to them.

Sign The Petition

A petition has been set up to oppose the planned reduction in tax relief for buy-to-let landlords. I did not create this petition but I have signed it. This link takes you to it.

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Landlords and Letting – Landlord Insurances

The demonisation of the private landlord

UPDATE – OSBORNE’S AUTUMN STATEMENT – INCREASED SDLT FOR BUY TO LET INVESTORS!

Have you noticed that recently there seem to be lots of stories about rogue landlords, who fail to repair their property, harass their tenants and carry out ‘revenge evictions’?

This has been coupled with an increasing amount of legislation, aimed at forcing private landlords to jump through more and more legal hoops. Even since 2006 landlords have been forced to comply with government regulations on the handling of tenants’ security deposits. This was of course perfectly justifiable in that many unscrupulous landlords used to unfairly withhold deposits, citing non-existent damage to the property etc.

img.103160_t

Local Authority Registration

However, things have progressed a lot from the Tenancy Deposit legislation. Many local authorities have for some time been forcing landlords to register with them. This is ostensibly to ensure that only ‘fit’ persons are allowed to be landlords and to ensure that adequate standards of repair are maintained. But really it’s mainly just another way for local authorities to grab a piece of the buy to let pie because there is alway a fee for this ‘service’.

Bank of England

The Bank of England has been clamping down on self-certified mortgages for buy to let landlords. Sensible stuff following the 2008 Credit Crunch you may rightly say, but it’s just one more thing…And don’t forget that this control on mortgages has no effect at all on very rich landlords and companies who don’t need mortgages.

Assured Shorthold Tenancies and Deregulation Act 2015

But the really onerous legislation was introduced this year, by The ‘Conservative Party’, with the Assured Shorthold Tenancies and Deregulation Act, a mouthful in more ways than one, which came into effect on October 1st.

Principal provisions of this Act are, for Tenancies that start on or after October 1st 2015:

• Landlords must supply a Gas appliance safety certificate
• Landlords must fit prescribed CO and Smoke Alarms in a prescribed way
• Landlords must supply a valid EPC (Energy Performance Certificate) – who the hell reads these!
• Tenants must be supplied with a copy of the Government booklet called ‘How To Rent’
• Additionally, landlords can only serve a Section 21 Eviction Notice after 4 months of the first tenancy
• The Section 21 must be in the new ‘prescribed’ form.
• There will be a six month limit to any Section 21 notice after service.
• If there is any outstanding local authority health and safety improvement notice, no Section 21 notice may be served for at least 6 months.

The judges join in

Recently, I read about a case on Tessa Shepperson’s excellent Landlord Law Blog. It detailed how a judge had decided that a tenant who has suffered a fall or similar in the communal parts of a block of flats has the absolute right to claim off the landlord – unless the landlord can show that he or she had ‘recently’ inspected the property and officially raised the matter with the block Management Company. This is even if the tenant HAD NOT REPORTED THE DEFECT TO THE LANDLORD! So, the implications of this idiot ruling would mean that a landlord would be required to check the property at least once a week – not too easy if the landlord lives abroad or a long way from the property.  And so it goes on…

Now, let’s also remember that all this landlord legislation has been introduced by a CONSERVATIVE government. And most of the anti-landlord rhetoric has been conducted partly during the time of the Coalition and also since the last election – by the CONSERVATIVES themselves.

Abolition of Mortgage Tax Relief for Buy To Let Mortgages

Finally, we come to Osborne’s piece de resistance – the gradual abolition of mortgage tax relief for buy to let landlords – fully effective by 2020. Brought in supposedly to ‘help first-time buyers’. But again the only landlords it’ll really hurt are heavily leveraged ones. The rich landlords or companies with 100s of properties and companies with access to masses of cash will not really be affected at all.

Why????

So the big question is WHY? Never mind the self-righteous cant about protecting helpless tenants or ‘looking after first time buyers’ – a group that’s patronised almost as much by politicians as ‘Hard Working Families’. I believe that it’s because The City of London has its greedy eyes set on the residential property market in most parts of England. What they can’t stand is that people with any spare capital rightly prefer to invest their cash direct into property rather than get ripped off by investment vehicles with their outrageous fund management charges. You will probably soon start to hear calls for ‘more responsible landlords’, ‘stable landlords’ and so on.

They are waiting for all the small-time landlords, driven out of business by Osborne’s iniquitous tax reforms to come to them and invest in rip-off Residential Investment Funds, where instead of getting up to 8% on their investment, people will end up with say 3% or so – and we know where the rest will go!

What’s more, many people have been fooled by Osborne’s new tax reforms, thinking that they are well intentioned and being pleased that they will hurt those ‘bloody awful landlords who are making life hell for tenants’. But, after all the changes I believe nothing will change for tenants. It is the iron Law of Supply and Demand, with too many people chasing too few properties, mainly because of uncontrolled immigration into an already overcrowded country.

Stop the demonisation!

I would urge all landlords to write to their MPs and protest at this so-called reform of the tax structure affecting buy-to-let mortgages. And although a small minority of landlords are indeed terrible and need to be tackled, let’s stop this continuing demonization of all private residential landlords. Many are simply ordinary folk who, finding they can only get 1% on their savings in the bank or ripped off by fund managers and their investment vehicles, decided to do the only thing they can – invest in buy to let.

 

Landlords and Letting – Insurance to protect landlords