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.
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.
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.