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Em Morley

London Landlord Fined for Failure to License Let

Published On: April 3, 2019 at 10:02 am

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Another rogue landlord has been fined for failure to license their house in multiple occupation (HMO).

Mohammed Saleh Ahmed, a London landlord in the borough of Tower Hamlets, has been issued a £4,000 fine, including costs of over £5,000, after failing to obtain the necessary licence for his HMO.

Landlords must license their let if it is occupied by at least three tenants from two or more separate households, sharing facilities, such as a bathroom and kitchen.

This form of licencing has been put in place as a way of bringing safer housing to the private rental sector (PRS). An effort is being made to improve HMOs in the UK, with the introduction of such schemes.

John Biggs, Mayor of Tower Hamlets, commented: “This case sends out a message to show that the council can and will enforce against landlords who fail to register their properties and that they face serious penalties for failing to do so. This prosecution action and the new scheme shows we are taking action to protect tenants and support standards for renters in the private rented sector.”

Councillor Sirajul Islam Deputy Mayor for Housing and Statutory Deputy Mayor, said: “The council cares about renters and will insist that landlords get the necessary licensing that protects both landlord and tenants. Housing is at such a premium in the borough that shared overcrowded flats used by multiple tenants are common. The scheme is essential in protecting health and safety for tenants and has real teeth.”

As this case shows, it can be expensive to get caught with an unlicensed HMO. It may be an extra cost for buy-to-let investors, but the licence does last five years. Specifically for a licence in Tower Hamlets, you would be looking at a fee of £520, which is one of the lowest in London.

This documenton the GOV.UK website provides full guidance for HMO landlords.

Poll Highlights it’s a ‘Good Time to be a Landlord in London’

Published On: April 3, 2019 at 9:33 am

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Long-term renting is becoming the norm, as many tenants are favouring location preference over being homeowners.

The results from London estate agent Kinleigh Folkard & Hayward (KFH)’s Annual Tenant Barometer have been released, showing that tenants are expecting to rent for longer. 

The highlights of these results include:

  • Tenancy length is now a top 5 priority for London tenants
  • 59% of tenants feel they would never be able to buy in the Capital
  • Tenants now expect to be renting for 5 years, a 25% increase from a year ago

Lisa Campbell, a tenant who lives with her partner, has commented: “This was the first rental we had together, and the four years we have spent in our rental have suited us for this time in our lives. Buying a property outright was not affordable for us in the area we wanted to live given the current climate.”

Many feel that the prospect of purchasing a property in the capital city is one that is even more out of reach. This has led couples to make the decision to rent in a preferred area, over buying in a location that they don’t want to live in, purely due to affordability. Long-term renting provides them with more freedom of choice, when it comes to lifestyle, than being a homeowner in London would.

Carol Pawsey, Director of KFH Group Lettings, said: “The strength of the private rental sector has been well documented and debated, and there is no doubt that the demand for rented accommodation is set to continue. In fact, in the first 10 weeks of 2019, our online tenant enquiries were up by 57% on 2018 and tenant registrations across our 46 lettings offices were up by over 25%.

“It is a good time to be a landlord in London, albeit, with changes to legislation, it pays to be partnering with those who can guide you through.”

The Annual Tenant Barometer has concluded the top five tenant priorities, when looking to rent. These are respectively: 

  • Rental price
  • Location within London 
  • Size of the property
  • Proximity to transport links
  • Tenancy length

Younger renters (aged between 18 and 34) have also highlighted a preference for a fully furnished property and bills being included in the rent.

Brooke and Gordon Kenwright, who also rent through KFH, have said: “The main advantage of taking a longer tenancy is the feeling of security and knowing we won’t have to move again in 12 months – trying to minimise any disruption for our two sons, aged six and nine”.

Landlord Illegally Letting Flats Caught and Sentenced in Slough

Published On: April 3, 2019 at 9:01 am

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A rogue landlord in Slough has been prosecuted, after illegally letting flats to tenants.

After being refused planning permission, 57 year-old Talwinder Singh went ahead and built a block of six flats on Waterbeach Road in Slough. He received a planning enforcement notice in September 2010, but this did not stop him from illegally letting out all six flats to tenants.

He continued to claim that the property had been returned to a single dwelling, as stated in the planning enforcement notice. This is what he told the council, however, it was later discovered that he had lied.

Talwinder Singh had in fact installed temporary kitchens within the flats, made so that they could be easily dismantled and moved elsewhere, in the event that council officers visited the building. The windows for the attic floor rooms were also removed, in order to give the impression that no one was living up there. This meant that the tenants renting that space, which included children, were left without natural light.

Despite registering the building with the council as a single property, this did not prevent him from charging the tenants additional fees for council tax.

Joe Cart, director of regeneration at Slough Borough Council, has said: “People and families in Slough deserve good accommodation and landlords who are not overcharging them for services they are not providing.”

Singh was issued a 15-month prison sentence at Reading Court, suspended for 18months. He has been fined £25,000 and ordered to pay a further £266,177 under the Proceeds of Crime Act 2002.

Neil Wilcox, Director of Finance and Resources at Slough, commented: “This successful prosecution is a result of a thorough and painstaking investigation by the council’s Fraud Team and has led to the recovery of a significant amount of lost council tax.”

During the hearing on 21st March, the council was awarded £18,826 in compensation for lost council tax and £23,130 in prosecution costs.

Is ‘No DSS’ Finally Becoming a Thing of the Past in the Lettings Industry?

Published On: April 3, 2019 at 8:01 am

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Buy-to-let landlords will no longer have to agree to a ‘No DSS’ term, when taking out a mortgage with The Co-operative Bank.

Platform, the intermediary lender for The Co-operative Bank, has removed this restriction from its lending criteria. Landlords taking out a buy-to-let mortgage with them will no longer have to worry about letting to tenants in receipt of housing benefit.

With the recent call from the Government to end ‘No DSS’ adverts, led by MP Heather Wheeler, the Minister for Housing and Homelessness, we have seen a trickle of change.

In March, Zoopla announced its plan to ban the phrase ‘No DSS’ from being used in any housing advertisements on its website, in line with Heather Wheeler’s movement.

During the same month, NatWest and Nationwide also removed restrictions from its terms and conditions that prevented buy-to-let landlords from letting to tenants in receipt of housing benefit.

NatWest specifically was highlighted in the media for previously having a ‘No DSS’ term, as last October news spread that the lender had informed a landlord that it would no longer continue her buy-to-let mortgage, as it was the bank’s policy not to allow rentals to benefit claimants.

Gordon Soutar, managing director of mortgages at The Co-operative, commented: “We are glad to be able to remove this condition to the benefit or our landlords and prospective tenants who previously may have been restricted from taking up tenancy due to the inclusion of this letting condition in our mortgage terms and conditions.

“Our charity partner, Centrepoint, has raised this issue and the potential impact that this condition of let could have on the young people they work with. This is not a condition that we want to continue to include in the mortgages that we offer and we will no longer enforce these clauses in our mortgage terms and conditions from Monday 1st April and we will completely remove this condition from our processes and systems with a completion date of 19 May 2019.”

Average Rent Prices for Scotland revealed in Latest Your Move Buy-to-Let Index

Published On: April 2, 2019 at 10:01 am

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Property investment continues to thrive in Scotland, according to rent prices revealed in Your Move’s latest Scotland Buy-to-Let Index.

The average rent prices for Scottish lets have increased by 1.7% in the 12 months to February, reaching £579 a month. Month-on-month, this shows a rise of 0.2%. However, it must be considered that this overall increase for the country should not cause us to overlook the statistics of individual areas.

The Highlands and Islands saw the largest increase, at 7.3%. This took the average monthly rent in this region to £691.

Edinburgh and the Lothians saw a year-on-year rent increase of 5%. Average rent prices of £699 in the Scottish capital this the most expensive region.

Glasgow and Clyde also saw a significant price increase. Prices grew by 5.6% in the past year to February, with the average rent being £604.

In the south of Scotland, drops to average rent prices were recorded. Year-on-year, prices dropped by 2.4%, with the average rent totalling £534.

Your Move has highlighted that landlords in Scotland are achieving a 4.6% average yield for their properties, which is slightly higher than England and Wales’ 4.3%.

Brian Moran, lettings director at Your Move Scotland, said: “Our figures demonstrate that for those owning rental property returns can be good.

“With more families appearing to be looking to rent, larger family homes represent an increasingly stable option for landlords.

“It is little wonder that existing or prospective landlords from other parts of the UK are choosing to enter the strong Scottish rental market.

“For landlords already in the sector, an average yield of 4.6% could convince many to expand their portfolios in the near future.”

Have you expanded your portfolio to include properties north of the border? If you have lets in both Scotland and England, have you noticed a significant difference in rental yield? Get in touch with us on social media to let us know!

Tax Relief Cuts for Buy-to-Let Investors Enter Third Year

Published On: April 2, 2019 at 9:25 am

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Buy-to-let landlords should now expect “another tightening of the tax rules”, reports leading accountants and business advisors French Duncan LLP.

Tax changes introduced by the summer 2015 Budget brought about discouragement to those considering investing in the buy-to-let market. Chancellor George Osborne then phased in a four-year revised treatment of tax relief, to ease the issue, which began in April 2017.

Stephen Oates, Tax Director at French Duncan LLP, has said: “April 2019 will see the start of the third year of the phasing process, which will mean that over the next year:

  • Three quarters of any interest paid on BTL borrowing will be eligible for a 20% tax credit; and
  • The balance of interest is deductible from rental income, meaning it is fully tax relievable.”

In order to simplify this information, Oates provided the following example of how this change in tax relief will impact landlords:

“If a higher rate taxpayer in England had rental income of £12,000 and interest on a BTL mortgage of £8,000, the investors’ net position is as follows:

tax relief
(Image source: http://www.frenchduncan.co.uk/blogs-news/buy-to-let-investors-can-expect-another-tightening-of-the-tax-rules-in-april/)

“Potentially, the situation could be worse than the table suggests if, for example, the disappearance of the deduction for interest increases the investor’s gross income to the point that it trips over the £100,000 threshold, at which the personal allowance is phased out.

“Interest relief changes and poor short-term prospects for capital growth could result in sales by BTL investors picking up this year. There is another tax incentive to sell on the horizon, too – from April 2020, capital gains tax on residential property (at 18% and/or 28%) will have to be paid within 30 days of sale, whereas the current rules effectively give a minimum of nearly ten months’ grace.”

Property investors in Scotland will be hit even harder by this taxation. Scottish landlords face a 15% greater reduction in net income than those in England and Wales.