Written By Em

Em Morley

Fears that the energy efficiency proposals in Scotland could damage sector

Published On: July 6, 2017 at 11:59 am

Tags: energy,energy efficiency,Scotland,Scottish Government

New proposals from the Scottish Government regarding new minimum energy efficiency standards for the private rental sector could well have a detrimental effect, according to claims.

Responding to a Scottish Government consultation that closed last week, the Scottish Land & Estates said that the challenges of rural housing should be taken into account. In addition, it has called for the policies to target the worst performing housing and for them to give the sector time to improve energy efficiency standards.

Risks

Katy Dickson, Senior Policy Officer at Scottish Land & Estates, noted: ‘Our consultation response makes clear that there is a risk that the private rented sector could be damaged by well-meaning but ultimately flawed proposals for new energy efficiency standards.’

‘Scottish Land & Estates is calling for the minimum standard to be set at EPC level E and for there to be no back stop date. This means the measures will target the worst performing stock and full upgrades can be completed gradually at natural breaks in tenancies. Ultimately this means all low performing homes will reach a better standard than the current proposals would allow and there would be less disruption to tenants.’

‘If the regulations are not manageable or appropriately funded then landlords will consider increasing rents in order to pay for energy efficiency investments or even leaving the sector. Our members are being told there is a rural affordable housing shortage and the Scottish Government is encouraging them to develop new housing to let.’

‘However, when faced with a new unfavourable tenancy regime and now a proposed minimum energy standard which fails to tackle the issues, landlords are being forced to consider if it viable to continue to let as many properties on a long-term basis at affordable rents.’[1]

Fears that the energy efficiency proposals in Scotland could damage sector

Ratings

In addition, the organisation raised concerns that issues with accurately assessing energy ratings is creating additional worries for the sector.

Continuing, Dickson observed: ‘The Scottish Government has highlighted that the age and location of rural privately let properties means they are more likely to be of lower energy efficiency. Simply being off the gas grid drops the efficiency score.’[1]

Concluding, she said: ‘We are one of many stakeholders that has raised concerns about the methodology behind the energy efficiency assessments across the UK. It is not transparent and fails to recognise the reality of many aspects of traditional rural buildings resulting in unreliable assessments. If regulation and funding is to be based on it, there must be improvements as soon as possible.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/7/proposed-energy-efficiency-standards-could-damage-prs-in-rural-scotland

Awareness and concern over Japanese Knotweed growing

Published On: July 6, 2017 at 10:02 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,Japanese knotweed,landlords,property

Interesting new research has revealed that there is a high level of anxiety surrounding the troublesome Japanese Knotweed.

The survey, carried out by YouGov and Environet UK, showed that 78% of would-be homeowners would be deterred from buying a property if they knew that the weed was present in the garden.

Japanese Knotweed

Reasons for this concern included:

Knowing it can’t always be removed – 69%
Cost of removing- 56%
Time involved- 57%

Responses to the report suggest that there is also a high level of myth and misinformation around the threat posed by the weed and the options to remove it.

First introduced to the UK during the 1850’s from Japan, Japanese Knotweed is now number one on the Environment Agency’s list of the UK’s most invasive plant. It is described as, ‘indisputably the UK’s most aggressive, destructive and invasive plant.’

Awareness

75% of Britons were found to be aware of the plant, but only 4% were aware of it actually being present in their property. People of Wales were particularly aware, with 95%, while 80% of people in the South East said they were.

However, those aware of the plant are mostly oblivious to their legal obligations surrounding the plant, should it be found on their land. Just 49% of homeowners are aware that it is their responsibility from preventing it spreading. 21% are aware that they could receive an ASBO should the weed be found on their land and subsequently spread.

Those looking for a comprehensive lowdown on the plant, how to remove it and their legal obligations can found out more in this guide.

Awareness and concern over Japanese Knotweed growing

Concern

Nic Seal, MD and Founder of Environet, said: ‘Homeowners are right to be concerned about the threat posed by Japanese knotweed. Attempting to deal with it by cutting it down repeatedly, burning it, burying it or using common weed killers simply won’t work as the plant can lie dormant beneath the ground, only to strike again when people least expect it.’

‘Yet for those wishing to buy or sell a property, it doesn’t have to be a deal breaker. Japanese knotweed can be dealt with once and for all, within a matter of days from discovery, so there is hope for buyers who may have otherwise walked away from their dream home.’[1]

Philip Santo, Chartered Surveyor and Director at Philip Santo & Co, added: ‘RICS shares concerns that many people believe Japanese Knotweed poses a much greater risk than it really does.’

‘Since RICS issued guidance in 2012 the situation for buyers and sellers has greatly improved. For most affected properties there is now access to mortgage finance once an approved Japanese Knotweed Management Plan is in place. DIY remedies can make matters worse and should not be attempted.’[1]

[1] http://www.propertyreporter.co.uk/household/8-in-10-put-off-from-buying-a-property-over-japanese-knotweed-fears.html

[1]

Landlords Call on Government to Reverse Tax Relief Changes

Published On: July 6, 2017 at 9:35 am

Author: Em Morley

Categories: Landlord News

Tags: government,landlord taxes,mortgage interest tax relief,tax changes

Landlords have called on the new Government to reverse tax relief changes, according to the latest PRS Trends Report from Paragon Mortgages for the second quarter (Q2) of the year, which is based on interviews with 201 experienced residential landlords.

Landlords Call on Government to Reverse Tax Relief Changes

The mortgage interest tax relief changes, announced in the 2015 Summer Budget by then chancellor George Osborne, are being phased in over three years, from April 2017. They mean that higher rate taxpayers can no longer offset all of their finance costs against rental income before calculating the tax due.

Following last month’s General Election, Paragon Mortgages asked landlords to rank the action they would most prefer the new Government to take to help with their lettings businesses. The highest-ranking answer was to reverse tax relief changes.

The second highest answer was for no more change, in favour of a period of stability following a turbulent two years, which also saw the introduction of a 3% Stamp Duty surcharge for additional homes from April 2016.

The third most popular action landlords would like the Government to take is an exemption from Capital Gains Tax (CGT) and Stamp Duty for those moving properties into a limited company structure – a strategy that 11% of landlords reported having already taken in Q2 2017 to help mitigate the impact of the tax relief changes.

The survey also found that 20% of landlords have increased rents in Q2, while the same number have sold properties and plan to buy no more, and 18% have repaid some or all of their mortgages.

This comes as 88% of landlords – up from 71% six months ago – say they now understand the personal implications of the tax changes. This is the highest reported figure since Paragon first asked the question in Q4 2015.

John Heron, the Managing Director of Paragon Mortgages, comments on the findings: “Having taken active steps in preparing for a difficult period of transition as the tax relief changes continue to be phased in, landlords are now facing up to the challenge ahead.

“Higher tax charges for landlords have combined with a general increase in uncertainty to drive confidence levels down. However, whilst there are signs of lower demand, it would appear that property yields are being maintained and that void periods are close to historic lows. This would suggest that, despite the negativity around the market, that the private rental sector continues to perform well.”

Would you like to see the Government reverse tax relief changes?

What is Rent-a-Room Tax Relief and How Does it Work?

Published On: July 6, 2017 at 9:14 am

Author: Em Morley

Categories: Finance News

Tags: live-in landlords,lodgers,rent-a-room tax relief,short-term lets

Rent-a-room tax relief, or the Government’s Rent a Room Scheme, allows you to earn up to £7,500 per year tax-free from letting furnished accommodation in your home.

What is Rent-a-Room Tax Relief and How Does it Work?

So how does it work?

The tax exemption is automatic if you earn less than the threshold. This means that you don’t need to do anything. If you earn more than the threshold, you must complete a tax return. From 6^th April 2016, this threshold is £7,500. Be aware that for the 2015-16 tax year, the threshold was £4,250. You can then opt into the scheme and claim your tax-free allowance – you do this on your tax return.

Who does the scheme apply to?

The Rent a Room Scheme applies only to landlords who let a furnished room to a lodger in their own home, or to those who run a guesthouse or bed and breakfast.

Short-term lettings, such as those found on Airbnb, are also covered.

However, if you plan to create separate residences that will no longer be part of your home – for instance, if they have their own entrances and facilities – you will not be covered by the scheme.

There is an exception if you let furnished accommodation in a self-contained flat where the divisions of the room are temporary.

There are no strict rules about what constitutes a temporary division, but HM Revenue & Customs (HMRC) will question how long the partitions have been in place and how long they are intended to remain. You will also be asked to state whether the separate residence has its own address and entrance.

If you plan to install kitchens and bathrooms in the property, it will be difficult to argue that the divided residences are temporary.

Unfurnished rooms and rooms that are being used by others as an office are also disallowed. Landlords who let rooms while they are abroad are also unable to claim the tax relief.

Rent-a-room tax relief is perfect for live-in landlords, but you must be aware that the scheme is currently under review for short-term lets.

RLA claims BTL crackdown is based upon false assumptions

Published On: July 6, 2017 at 8:55 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,RLA,tax changes

The Residential Landlords Association has released data that suggests that thousands of private landlords could be pushed into a higher tax bracket unfairly, following the introduction of new tax rules.

Branding the Government’s assumptions as ‘clearly false,’ the RLA believe that nearly two-thirds of individual landlords are only liable for the basic rate of income tax. The trade association suggests that this challenges the assumption that landlords have large incomes and can therefore cope with tax hikes.

Figures

Government figures indicate that of the 1.9m landlords that are not incorporated and return a self-assessment tax return, two thirds were in the basic rate bracket. 30% were found to be in the higher rate band, while just 4% paid the additional rate.

These figures come after David Miles, a former member of the Bank of England’s Monetary Policy Committee, warned that tax rises targeting landlords could well lead to tenants being hurt.

In addition, separate research conducted by the NLA shows that the proportion of landlords with a solitary property who believe that they will be moved into a higher tax bracket has nearly doubled since the end of 2016.

16% of landlords with a single property now feel that this is the case, and increase of 7% from the final quarter of 2016.

RLA claims BTL crackdown is based upon false assumptions

False Assumptions

Chairman of the RLA, Alan Ward, noted: ‘The previous chancellor increased taxes on the private rented sector based on what are now clearly false assumptions. It is especially worrying that Ministers cannot tell how many properties, and therefore tenants, could potentially be adversely affected by their policies.’[1]

‘We need more homes to rent to meet growing demand. It is time that the tax system encourages rather than stopped housing growth cold dead,’ he added.[2]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/7/buy-to-let-tax-crackdown-based-on-false-assumptions

Croydon Named London’s Wealthiest Borough for Property

Published On: July 6, 2017 at 8:13 am

Author: Em Morley

Categories: Property News

Tags: Croydon,house prices,London,property market

The latest research by online estate agent eMoov.co.uk has revealed that Croydon is London’s wealthiest borough for property.

Kensington and Chelsea is traditionally crowned the most expensive area to buy a home in London, with the highest average house price of all boroughs (£1,406,839) – a cost per square metre of £9,110, which is just short of Westminster, at £9,330.

Croydon Named London’s Wealthiest Borough for Property

However, using data on the surface area (m²) of each London borough accounted for by domestic residential property and gardens, and the cost of property per square metre, eMoov has highlighted that Kensington and Chelsea isn’t the most lucrative where the quantity of property per square metre and its price tag is concerned.

Land use: The London Datastore was used to provide figures for the quantity of domestic buildings and domestic gardens across each borough.

Price per square metre: This data was sourced from London.Gov.

Across London, the average price per square metre is £2,401, with the average quantity of property/garden space standing at 16,229,094m². This puts the average value of the property wealth across all London boroughs at £28.3 billion.

At more than £41.3 billion, the total value of residential property in Kensington and Chelsea is substantially higher, but only places it sixth in the rankings.

In fact, it’s Croydon that has the highest property wealth in the capital, with over £77.2 billion worth of property across the borough. Property in Croydon is an average of £2,150 per square metre, while the combined area of residential property in the borough is 35,920,000m².

When multiplying this price per square metre by the total residential area, Croydon is the leader by far – almost £20 billion more than second place Richmond upon Thames (£58.7 billion). Barnet (£49.5 billion), Bromley (£43.5 billion) and Westminster (£42.2 billion) complete the top five.

Russell Quirk, the Founder and CEO of eMoov, says: “Kensington and Chelsea certainly rules the roost where the premium price tag and cost to individual homebuyers are concerned, but, as this research shows, it isn’t the wealthiest in terms of the sheer quantity of the property assets located across the borough.

“When taking into account the size of each borough’s property portfolio, it provides an alternative look at which parts of London are home to the greatest accumulation of property wealth.

“Of course, the outer boroughs of London dominate, as these are the locations that allow a larger ground area to be allotted to a residential purpose, but it is the recent trend of homeowners forsaking the inner city and looking to these more affordable outer boroughs that have seen prices increase there and, in turn, push them up these rankings.”

eMoov also recently looked at which London borough is the greenest for properties costing under £500,000: /londons-greenest-boroughs-properties/