Haringey Borough Council has approved plans for borough-wide additional HMO licensing, to take effect from 27th May 2019.
The plans will affect private landlords of Houses in Multiple Occupation (HMOs) that are occupied by three or four people forming two or more households.
Landlords with HMOs housing five or more people forming two or more households are already required to hold a mandatory HMO licence, following changes from 1st October 2018, which removed previous storey requirements.
The additional HMO licensing fee will cost £1,100 per property and will take a split fee approach, in line with recent case law. Landlords will face an upfront payment of £500, with the additional £600 being paid before the licence is issued. The council has confirmed that landlords who make an application before 27th May 2019 will be eligible for a discounted licence fee of £500.
The decision follows a 12-week consultation, which took place from 12th December 2017 to 5th March 2018. The council said that, by identifying landlords though issuing licences, it would be able to identify who was responsible for poor property management.
A summary of the 607 questionnaire responses from the consultation found that 77% of private tenants were in favour of additional HMO licensing, as were 45% of landlords and managing agents.
Despite a hike in rent prices or potential reduction in housing stock being the most cited reasons for not supporting the additional HMO licensing, and 51% of landlords confirming that licence fees were unreasonable, 63% of renters still felt that they were reasonable.
Councillor Emine Ibrahim notes: “This additional HMO licencing scheme will help ensure all HMOs in our borough are safe, well maintained and managed effectively. HMO landlords will now be required to licence their properties with the council, and those applying for the licence early will get a discounted fee.”
Landlords with HMOs in the borough are advised to apply for their licences by 26th May 2019, in order to qualify for the discounted fee of £500.
Private landlords are contributing more than double Tesco’s annual tax bill in Income Tax, according to findings by the National Landlords Association (NLA).
New research by the organisation has found that the estimated total Income Tax contribution by private landlords in England exceeds £3.8 billion annually, which is more than double Tesco’s entire annual tax bill.
Assuming typical deductions are made for regular maintenance, finance costs, and miscellaneous legal and management expenses, landlords in England have a combined taxable income in excess of £19.1 billion, the NLA reports.
Even if all of these individuals pay only the basic rate of Income Tax, this equates to an estimated annual contribution of £3.8 billion in Income Tax alone, or £1,668 per landlord, before additional liabilities, such as Stamp Duty (including the additional rate of 3%), Capital Gains Tax and VAT, are taken into account.
Meanwhile, the UK’s largest supermarket chain, Tesco PLC, paid £1.63 billion in tax in 2018.
Richard Lambert, the CEO of the NLA, comments on the findings: “Far from being subsidised by the taxpayer, private landlords make a significant contribution to the public purse. Furthermore, changes to landlord taxation made in 2015 are forecast to increase HM Treasury’s receipts from landlords by almost £2 billion – pushing total estimated Income Tax contributions to £5.7 billion in years to come.
“These dramatic increases in landlords’ tax liabilities in the UK has led many to conclude that it is no longer possible to achieve a reasonable return on investment, prompting them to sell their properties and close their businesses. This is in stark contrast to the relatively small sums paid by many major retailers and online giants.”
He adds: “The NLA’s conservative estimate of landlords’ tax liability suggests that they pay more than twice as much in Income Tax alone than Tesco’s entire tax bill and a staggering 62 times Amazon’s Corporation Tax bill in the UK.”
The number of long-term vacant homes in England has risen for the second consecutive year, representing £53.6 billion worth of empty property, according to analysis of Government data by modular homes provider Project Etopia.
The amount of long-term vacant homes increased by 5.2% to a total of 216,186 in the 12 months to October 2018, reports the Ministry for Housing, Communities and Local Government, following a 2.6% rise in the previous year.
Prior to this, the number of long-term vacant homes – defined as those that have been empty for at least six months – had dropped every year since 2008.
Overall, 634,000 homes stood empty in England in October 2018 (including short-term and long-term vacancies), marking a 30,000 rise on the previous year.
Of all the towns and cities in England, Portsmouth experienced the greatest percentage increase in the amount of long-term vacant homes last year, with 101.5% more properties standing empty, totalling 939.
Hartlepool saw the second biggest rise (53.8%, to 726), while Eastbourne came in third (48.4%, to 518).
Number of Long-Term Vacant Homes Rises by over 5% in a Year
Birmingham recorded the highest overall number of long-term vacant homes in the country, at 4,283, which was barely changed on the previous year (+0.07%), followed by Durham (4,130) and Bradford (4,090).
Across England, long-term vacant homes are worth a collective £53.6 billion.
London also witnessed another rise in the number of long-term vacant homes last year, its second increase since 2009. The total number of empty properties in the capital grew by 11.1%, to 22,481 – representing £10.7 billion worth of housing.
Southwark (1,766) has replaced Croydon (1,521) in top spot, which has dropped down to tenth. The City of London is second (244, following a 54.4% rise), while Sutton is third (686, after a 46.0% increase).
Southwark recorded the greatest rise of any London borough, at 56.6%.
Joseph Daniels, the CEO of Project Etopia, comments: “This remains a national scandal that isn’t going away, pointing to a collective failure to really get to grips with this problem.
“The stubbornly high number of empty homes is compounding the housing market’s deeply entrenched problems, with lack of supply remaining a key driver of high prices and low affordability.”
He adds: “New homes are not being built fast enough and the constant spectre of abandoned properties aggravates an already tough market, particularly for first time buyers, who desperately want to claim the keys to their first property.”
With the Royal Institution of Chartered Surveyors warning that the supply of new rental homes “continues to dwindle”, while tenant demand increases, the Residential Landlords Association (RLA) is calling for pro-growth tax measures to bring empty properties back into use.
The RLA is urging the Government to scrap its Stamp Duty surcharge on additional properties when landlords invest in long-term vacant homes and bring them back into use within a reasonable timeframe.
John Stewart, the Policy Manger at the organisation, says: “The scandal of empty homes at a time when so many are finding it difficult to access accommodation is just one reason why pro-growth tax is needed. The Government should support good landlords to do what they have always been good at – investing in property and bringing it back into long-term use.”
The Labour Party is planning to introduce indefinite tenancies to protect private renters, if it were to gain power.
The Shadow Housing Secretary, John Healey MP, has announced that a Labour government would aim to address the so-called “power imbalance” between landlords and renters, by introducing indefinite tenancies in the private rental sector.
Labour sees these German-style indefinite tenancies as the answer to fixing what Healey described as a “broken housing market”, as they would provide tenants with greater security. In the UK, landlords end around one in five private tenancies, rather than renters.
Labour’s latest proposal marks a change in tack from its pledge at the 2017 general election, when it committed to making private tenancies a default duration of three years.
Alongside providing greater security for renters, its plan for indefinite tenancies is intended to reduce the extent of rent price rises.
Healey insisted: “People shouldn’t be living in fear of losing their homes. The insecurity of renting is a power imbalance at the heart of our broken housing market, where tenants are afraid to report problems in case they are evicted, and families with children are forced to move at short notice.
“Many landlords provide decent homes that tenants are happy with, but the Government is allowing rogue landlords to take advantage of good tenants. Renters deserve better.”
Do you believe that offering indefinite tenancies to private renters is a step towards fixing the broken housing market, or would you, as a landlord, be worried about keeping tenants in your properties for such a long period of time?
We would like to hear your thoughts on Labour’s latest private rental sector proposal – let us know whether you support the plans or not.
As a homeowner, you are justly proud of your property. You paid for your property with hard-earned money and, having decided to get a tenant, you really would like to find someone who will treat it properly and with respect – as though it were their own.
It is well worth being thorough in your search for the ideal tenant, as this helps ensure a trouble-free tenancy – and, if you are delighted with your tenant, they may well want to extend their tenancy if you offer this to them. The key to success is to put in plenty of effort. Advertise your property widely, as this will bring you a greater choice of tenants. Ensure that your landlord’s insurance policy is more than adequate. Spend plenty of time with your prospective tenant chatting to them, make sure that thorough background checks are carried out on them and listen to your sixth sense.
Before you place your property on the rental market, check that the rent you will be asking is a fair one and that it compares well with similar properties in the area – rental prices do drop as well as climb! If the property is empty, ensure that all the maintenance jobs have been completed – and to a high standard – and that it is in good decorative order and that the garden is tidy and looks well cared for.
Whilst you will be taking measures to ensure that you get a top tenant, all you can do is minimise the chance of having a difficult tenant. Sadly, according to AXA, 48% of landlords have had an issue with a tenant somewhere along the way.
Establishing the basics.
The first question is whether your prospective tenant is entitled to live in the UK and do they have a right to rent a property? It is essential that you check this out straightaway, as failure to do so could result in you being fined – heavily. It is important to remember that, in choosing a tenant, landlords are not allowed to discriminate against nationality, religion, gender, family status (whether they do or do not have children) or disability.
First impressions really do count, so don’t just communicate online; meet your prospective tenant face-to-face. So, what do you think? An untidy person is unlikely to keep your property well! Do they seem open and honest? These are great qualities and help establish good communication. A quick look at their social media profile will probably reveal more about their character!
2. Can they comfortably afford the rent
In your conversation with your prospective client, it is essential to find out whether they have a secure job and to assess their salary, as rental agencies recommend that a tenant should have a salary that is 30 times the amount of one month’s rent. If the rent is £900, they should be earning at least £27,000. This is essential, as your tenant needs to be able to live comfortably and to have some slack in their finances, in case their car breaks down or they have other unplanned expenses along the way.
If a prospective tenant is making a big jump in the amount of rent they will be paying, question why. Companies such as Experian and TenantVERIFY can carry out credit checks on prospective tenants for you. Ask for references from their landlord, flatmates and current employers.
If your prospective renter is self-employed, they too will need to prove the sustainability of their income to you, which can be done using bank statements or confirmation from their accountant.
6 Ways to Find the Ideal Tenant for your Property
3. Will they communicate well?
Discuss methods of communication with your prospective tenant, as these are important. Give them the times that you are always available – most landlords suggest office hours – and give them a card with your email and mobile number for emergencies. Emphasise that you would appreciate their calls and would like to be notified of any problems as soon as they occur. Good landlords always follow up telephone conversations with an email summary of the conversation and what they have agreed to do, if it is a maintenance problem. They keep all paperwork to do with the tenancy in a dedicated folder for easy access.
4. Do they understand the ground rules?
Have you explained to your prospective tenant that the property is your home and that you are emotionally attached to it? Have you explained that you do not want any pets in it and nor do you want extra lodgers living in it? Set guidelines for this and suggest that, if a family member is going to be staying there more than one week, you would like to know.
Discuss with your prospective tenant which day of each month the rent will be due and ask them to establish a Direct Debit scheme for payment.
5. Try and keep everybody happen!
If they are going to be a replacement tenant for your current one, try to keep your current tenant happy, because it is difficult for them to always have people viewing the property, and showing your appreciation to them will ensure they are cooperative with moving out dates.
6. Show that it is your castle!
If the prospective tenant is viewing an empty property, make sure that they see it at its very best. Show that you care and that everything is in good decorative order, as this will show that you really do care.
Doing this may help you in the future, as well if you’ve ever thought to yourself: I want someone to eventually buy my house in the future.
How will it help?
It’s not uncommon for renters to want to purchase a home they’ve been living in for a while if they really like it, so keep your wits about you and make your property look as good as It possibly can.
And once you have found your ideal tenant?
Take a deposit, four-six weeks’ rent is the normal amount – although it will soon be capped at five weeks’ rent, under the Tenant Fees Bill, which is due to be introduced from 1stJune. This should be held in a deposit protection scheme.
Get a tenancy agreement drawn up by your solicitor to ensure that it is legally binding and agree a moving in date.
Prepare a full inventory of the property, room-by-room, with photographs, and walk through the property, checking that your tenant is happy with all the entries, and signs and dates the inventory to avoid any hassle when they leave the property…
If, after reading through this, you feel uncomfortable or lacking in confidence about dealing with all aspects of the rental, or maybe you just do not have enough hours in the day, the perfect solution is to get a letting agent. Choose your letting agent carefully; they do charge a commission each month, but they will cover all aspects of property rental well and with a good tenant under your roof.
Following a buoyant start to the year, the supply of homes for sale dropped in February, according to the latest Property Activity Index from Agency Express.
The report reveals mixed activity across the UK property market last month.
Nationally, the number of properties sold remained true to trend, increasing by 16.9% on a monthly basis, while the amount of properties coming onto the market dropped by 0.7%.
While February’s figures for new listings were affected by January’s spike, annual data does show a greater level of activity in the market during 2018, when new listings rose by 2.7%.
Looking at the individual regions included in the index, all 12 recorded growth in the number of properties sold in February, but only five saw increases in homes coming onto the market.
Scotland sat at the top of February’s leader board, with new listings up by 24.7%, while the amount of properties sold rose by 27.7%. Although February’s figures were buoyant, historical data again shows a greater level of activity in 2018.
Other regional hotspots included:
New property listings
Yorkshire and the Humber: +16.8%
North West: +7.8%
Wales: +0.4%
East Midlands: +0.2%
Properties sold
Yorkshire and the Humber: +23.4%
South West: +19.7%
North East: +18.9%
London: +18.7%
North West: +17.3%
East Midlands: +15.1%
East of England: +11.2%
The greatest decline in February’s index was in London. Following robust activity in January, new listings fell by 8.8% month-on-month and by 23.1% over a three-month rolling period. Looking back at Agency Express’ historical data, we can see that this decrease is the largest on record for the month of February.
Stephen Watson, the Managing Director of Agency Express, comments: “We typically see figures plateau in February, but the latest data from the Property Activity Index has shown a decline in supply compared to the same month in 2018. However, overall figures remain robust and year-on-year activity continues to increase for us.”
