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Em Morley

Dudley Building Society Updates Buy-to-Let Range

Published On: September 2, 2016 at 8:32 am

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Dudley Building Society has released its latest set of updates for its buy-to-let range, featuring new products, comprehensive rate reductions and improved criteria.

Dudley Building Society Updates Buy-to-Let Range

Dudley Building Society Updates Buy-to-Let Range

The society, which announced strong annual results for the 2015/16 financial year, with pre-tax profits of £1,335,000, is responding to a buy-to-let sector that “needs encouragement”, according to the firm’s Head of Credit, Jonathan Moore.

The updates include a reduction in interest rates across all products, with all fixed rate products cut by 0.30%. Rates now start at just 2.99%, with products now including options with no Early Repayment Charges (ERCs).

Dudley has also introduced brand new three and five-year discount products, with a maximum ERC period of three years.

The majority of products now carry a new maximum borrowing value of £1m, up from £500,000, while the minimum income required has been reduced to £20,000 per application.

In addition, Dudley’s stressed rate calculation has been simplified, through the removal of separate requirements for flats. Loan-to-value (LTV) requirements on background residential property have also been cut.

Moore says: “Landlords have been in the firing line over the past 12 months because of the Stamp Duty changes and, with the tapering effect on tax relief due to start in 2017, it is important that lenders like the Dudley do everything that we can to provide the kind of products that offer value, flexibility and a common sense approach to underwriting buy-to-let mortgages.

“Therefore, our partners will be pleased with the overall reduction in rates, some of which start from 2.99%. We have introduced new three and five-year discounted products, as well as options which have no ERCs. Dudley Building Society continues to lead the way by working exclusively through intermediaries and being among the first to abolish upper age limits for applicants. On top of which has been our commitment to manual underwriting and a holistic approach to every enquiry, which has given us a deserved reputation for the kind of service that brokers require for their customers.”

Do these new updates encourage you to invest further in the buy-to-let sector?

Tax changes will not be detrimental to landlords-NLA

Published On: September 1, 2016 at 11:11 am

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The National Landlords Association has moved to issue a report in an attempt to calm fears relating to late tax additions to the Finance Bill at Committee Stage.

There is growing concern that these amendments regarding land and capital tax will have yet another negative impact on buy-to-let landlords.

Impact

Earlier this week, The Law Society suggested that profits generated from the sale of buy-to-let property could be subject to income tax instead of capital gains tax as a result of the changes.

However, the National Landlords Association believes that the planned alterations to the Bill will not have a detrimental effect. The Association points to the fact that these measures, ‘were part of the anti-avoidance measures promised in the Budget.’[1]

New clauses to be added to the Finance Bill will involve legislation announced in the 2016 Budget. This will include a specific alteration to income or corporation tax on profits generated from the disposal of land in the UK.

These clauses will make sure that offshore structures cannot be utilised to avoid UK tax on profits made from dealing in or developing land in Britain.

Tax changes will not be detrimental to landlords-NLA

Tax changes will not be detrimental to landlords-NLA

Ambiguous

Despite the rather ambiguous wording, the National Landlords Association said it is, ‘reassured by the then Chief Secretary to the Treasury’s explanation of the new clauses in July.’ This includes a comment which reads: ‘this measure is targeted at those who have a property building trade; it does not impact the tax profile for investors in UK property.’[1]

With the Report Stage for the Bill coming up next week, the National Landlords Association has confirmed with HMRC officials responsible that these changes are not intended to alter existing tax arrangements between buy-to-let landlords and HMRC.

The NLA said in a statement, ‘HMRC considers that generally property investors that buy properties to let out to generate property income and some years later sell the properties will be subject to capital gains on their disposals rather than being charged to income on the disposal.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/8/tax-amendments-will-not-adversely-affect-landlords

A Guide to Fire Safety in Your Rental Property

Published On: September 1, 2016 at 10:48 am

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Private landlords have many responsibilities in their role of providing safe and secure homes to tenants. Arguably one of the most important obligations in terms of keeping your tenants safe and protecting your property is fire safety.

FireProtectionOnline.co.uk has put together some advice for landlords on complying with fire safety rules, to ensure you look after your tenants and comply with the law.

Smoke and carbon monoxide alarms

Smoke alarms are vital in keeping everyone in a home safe, as early warnings of fire will help residents evacuate safely and call for help. The law now requires landlords to install at least one smoke alarm on each floor of their rental property for tenancies starting on or after 1st October 2015.

In addition, landlords are legally obliged to fit carbon monoxide alarms in any rooms with a solid fuel burning appliance.

FireProtectionOnline also advises having your chimneys swept annually, which helps keep your appliances safe and ensures the chimney isn’t blocked, although this is not a legal requirement.

Furthermore, the firm suggests installing carbon monoxide alarms if you have gas appliances in your property, even though it is not compulsory, as faulty gas appliances can also be a source of the harmful gas.

At the start of each new tenancy, you are required to test all alarms and make sure that tenants are aware of their responsibilities.

If you have battery alarms, inform your tenants that they must change the batteries every six months and test them weekly. Because you cannot rely on them doing so, it could be a good idea to purchase long-life battery alarms that have a ten-year guarantee. All you need to do then is change the smoke alarm every ten years, which should be done anyway.

You could also have the alarms wired into the mains electricity, which also contains a life-long battery. This means that the alarm will still work, even if there is a power cut.

A Guide to Fire Safety in Your Rental Property

A Guide to Fire Safety in Your Rental Property

Also, consider putting interconnected smoke alarms in. All new build homes require this system, and you can connect them via cables or wirelessly. With these alarms, your tenants would be warned of a possible threat, regardless of where they are in the property.

It is also important to remember that you must fit the right type of sensors. Installing a heat sensor in the kitchen means that your tenants would have fewer false alarms when they are cooking. Optical smoke alarms are also less sensitive to cooking fumes. A fire risk assessment will help you decide which sensors to fit.

If you do not comply with smoke and carbon monoxide alarms laws, you could face a £5,000 fine. It is vital that you stick to your duties, as private tenants are seven times more likely to experience a house fire than homeowners – fit fire alarms immediately if you haven’t already!

Gas safety

Gas leaks can cause a host of serious hazards. As a responsible landlord, you should have carbon monoxide alarms installed in your rental property. Not only is the harmful gas produced by burning solid fuel, it is also caused by gas appliances.

On average, carbon monoxide poisoning causes over 200 hospital admissions every year and around 40 deaths. As the gas has no colour, smell or taste, it can go by unnoticed – unless you have an alarm. Common symptoms of carbon monoxide poisoning include headaches, nausea, dizziness, breathlessness and loss of consciousness. Not only is the gas harmful to health, it is also highly flammable and could cause a terrible explosion.

The law is very strict regarding gas safety in rental properties. Failing to comply with these rules makes you liable for hefty fines and even imprisonment. This guide will help you stick by your gas safety obligations: /landlords-guide-gas-safety/

Electrical safety 

All landlords must make sure that their rental properties are safe. This means certifying a number of things about the property to ensure you comply with your legal responsibilities.

At the beginning of each tenancy, you must check that the electrics, including the circuits, switches, sockets and light fittings, are safe and are kept in a safe condition throughout the tenancy. Conducting periodic inspections will allow you to check that there are no signs of damage, such as cracks, burn marks or frayed leads.

The best way to be completely sure is to have any work carried out by a qualified electrician. All Houses in Multiple Occupation (HMOs) must have their electrics inspected by a professional every five years. Ordinary rental properties are not required to do so, but it could still be a good idea, to ensure your tenants are safe and your property is in a good condition.

You must also make sure that any electrical appliances you provide are safe. Only use appliances with a CE marketing, which confirms that it has met EU safety requirements. FireProtectionOnline also suggests having your appliances PAT tested every year by a registered electrician. Although this is not a legal requirement, you are bound by law to ensure that your electrical equipment is safe.

Additionally, you should check that your fuse box has RCD protection, which means that its design will protect against electric shocks and reduce the risk of an electrical fire breaking out.

Furniture 

If you let your property furnished, you must be careful when choosing furniture. All upholstered furnishings must be made from a fire resistant material, and you should not remove the label that confirms this. However, the Furniture and Furnishings Act 1988 does not include carpets or curtains.

FireProtectionOnline also advises providing your tenants with fire safety advice in their welcome pack. Remind them to be careful when lighting candles and leaving lit appliances unattended. You may also want to ban smoking in your property, to reduce the risk of furnishings catching alight.

Fire-fighting equipment

Typically, fire-fighting equipment is not required in rental properties. However, HMOs must have fire extinguishers on each floor of the building in communal areas. It is also a good idea to provide a fire blanket and a multipurpose extinguisher for your tenants. These will help them stop a small fire from getting out of control, and could help them make a safe exit if a fire spreads.

If you do provide an extinguisher in your rental property, you must ensure that your tenants know how to operate it. Although you might not be able to offer them training, you can provide basic advice.

You must also think about which type of extinguisher to offer. A powder extinguisher is best for different uses, but can cause significant damage to the property. Weigh up the pros and cons to decide whether a foam or water extinguisher might be better suited. But remember – a trained technician must service any extinguisher you provide every year.

Fire risk assessments

Completing a fire risk assessment helps you identify any potential risks in your rental property. Under the Regulatory Reform (Fire Safety) Order 2005, you must conduct a fire risk assessment for your HMO. Although you can conduct this yourself, FireProtectionOnline advises landlords to have a professional complete the assessment on your behalf. However, you will still be held accountable for complying with the law.

Fire risk assessments identify fire hazards, reduce the risk to those living in the property, and highlight precautions to ensure the safety of tenants. You can use this report to make your property as safe as possible.

Although it is not a legal requirement, you should also have a fire risk assessment conducted for any type of property you rent out. The report identifies emergency evacuation plans and any fire doors that are needed, helping you keep your tenants safe.

Landlords, remember that it is in your best interest to comply with fire safety laws and recommendations, as your tenants’ safety and property’s condition could be at risk.

Scheme looking to reunite tenants with their deposits

Published On: September 1, 2016 at 10:13 am

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A tenancy deposit scheme north of the border is looking for Scottish tenants who have forgotten to claim back their deposits.

SafeDeposits Scotland has vowed to return substantial amounts of cash to their rightful owners.

Deposit schemes

Tenancy deposit schemes were brought in during July 2012. Since then, in excess of 156,000 deposits have been repaid by SafeDeposits Scotland. Despite millions of pounds being safely returned to tenants at the conclusion of their agreement, a small proportion of renters do not claim back money owned.

A large percentage of this proportion are students. With the start of the academic year just around the corner, September is generally the busiest month for deposits being paid both in and out.

Data from the firm suggests that over 2,000 tenants have ended their leases without claiming back money owed to them. This in total adds up to more than £500,000. Should deposits not be claimed back after six years, any monies will go to the Crown.

Scheme looking to reunite tenants with their deposits

Scheme looking to reunite tenants with their deposits

Attempts

The finance team at SafeDeposits Scotland attempt to reunite tenants with their deposit money via a range of different methods; sending letters, text messages, emails and phone calls.

A number of these methods prove successful, however some cases prove more complex. Monies cannot be paid straight into bank accounts, as this information is not disclosed to any of the three approved tenancy deposit schemes.

Jennifer Paice, Chief Executive of SafeDeposits Scotland, said, ‘it’s extremely surprising that people can leave their rented property and forget to ask for their deposit back. The vast majority of tenants remember to claim their money but there’s a small minority who don’t. Our finance team do a great job in tracking most of them down but there are a significant number they can’t get hold of. We don’t think it’s right that people lose out on what’s due to them so we do everything we can to try and get people the money they are owed.’[1]

[1] http://www.propertyreporter.co.uk/finance/scheme-aims-to-return-500000-in-unclaimed-rental-deposits.html

 

 

How a New Boiler Could Save You Getting Hit by Green Tax Charges

Landlords may soon have to consider getting a new boiler for their properties as part of a Government drive to improve efficiency in older houses.

Changes in the so-called green tax measures mean more than 330,000 buy-to-let landlords may have to fork out up to £5,000 from spring 2018 to ensure their properties satisfy the new rules.

This is because, from April 2018, home improvement loans will no longer be available to landlords to make their houses more energy efficient.

How a New Boiler Could Save You Getting Hit by Green Tax Charges

How a New Boiler Could Save You Getting Hit by Green Tax Charges

The green tax

Part of the UK Government’s plans to improve the energy efficiency of the country and reduce its overall environmental impact, the green tax is actually a series of country-wide measures aimed at encouraging householders as a whole to make their homes more energy efficient.

Part of the scheme has involved providing loans to landlords through the Green Deal project, where improvements were paid for by tenants, who would get the benefit of the resulting lower energy bills.

The Green Deal scheme also encouraged ordinary homeowners to take out loans to improve their own property’s efficiency through insulating their loft, installing cavity wall insulation or boiler replacement. These, and other measures, were aimed at saving homeowners money on their energy bills, as well as helping improve the country’s environmental credibility.

Forthcoming changes to the scheme, implemented by the Department for Business, Energy and Industrial Strategy, mean landlords will effectively have to foot the bill for a new boiler themselves. It is estimated that more than 300,000 landlords will be affected by the changes.

How efficient?

Under the new rules, landlords will have to ensure their water heating systems are at least a band E on the energy rating scale. As many older Victorian and Edwardian houses only currently achieve ratings of bands F and G, landlords will have to fit a new boiler – improving its energy rating – in order to meet the requirements.

The Government is proposing to place a cap of £5,000 on improvements by landlords and insists most will not have to pay much more than £1,800 to install a more efficient boiler.

However, it does mean landlords will have to pay for improvements themselves and will face penalties if their properties do not conform to the revised energy standards. Experts are warning the moves could result in higher rents for tenants, as landlords seek to pass the cost of improvements on, as well as a reduction in the number of people becoming buy-to-let investors in the first place.

Given these changes, landlords are being advised to make improvements to the energy efficiency of their properties as soon as they can. If your properties are falling behind in the energy efficiency stakes, maybe a boiler replacement is on the cards sooner rather than later.

This article was written by Aura Gas, leading installers of new boilers in Hampshire and the surrounding areas.

Landlords Successfully Overthrow Selective Licensing Plans

Published On: September 1, 2016 at 8:36 am

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Over the past couple of months, we have covered the story of the Somerset Property Network’s battle against North Somerset Council’s selective licensing plans for landlords in Weston-super-Mare.

In late July, a group of landlords in the county decided to form the Somerset Property Network, in a bid to campaign against the new licensing scheme proposed by North Somerset Council.

Landlords Successfully Overthrow Selective Licensing Plans

Landlords Successfully Overthrow Selective Licensing Plans

The group, led by Paul Routledge (a veteran property investor) and Samantha Boyd (a private tenant), managed to raise £12,000 to take the council to judicial review in order to overturn the plans. Somerset Property Network believes that the council’s initial consultation was careless and unnecessary – “a money-making exercise at the expense of good landlords and tenants”.

Now, North Somerset Council has officially announced that it will not be progressing with the original licensing scheme, as it is aware that the Somerset Property Network has challenged the plans, suggesting a number of alternatives.

North Somerset Council remains committed to driving up the standards of private rental homes across the county, and will conduct a further review of the other options available to improve the condition of private rental properties, once it has considered the additional feedback supplied by landlords.

The council is now arranging a meet-up with representatives of local landlords, including members of the Somerset Property Network and the Private Sector Housing Forum, to explore the alternatives suggested.

North Somerset Council plans to arrange an initial meeting in early September, and, in addition, will engage with a cross-section of tenants to form a balanced view from the sector.

Somerset Property Network is confident that North Somerset Council is now listening and willing to work with responsible landlords to improve housing conditions for all tenants across the county.

Routledge, also the CEO of TenantReferencingUK.com, comments: “It is a great day for democracy and it proves it is never too late to talk. Good landlords in Weston-super-Mare are determined to rid problem landlords of our communities as much as any council; bad landlords reduce our investments and bring problems to our neighbourhoods. But the way forward is to work with the good to fight the bad, so let’s hope that’s what we can do now.

“It is our intention to put together a Somerset Property Network Voluntary Charter, whereby we can submit a standard that we all believe [as landlords] should be met and work with our good tenants to provide long-term, better homes for all. It is simple: good landlords want good tenants, and good tenants want good landlords. That works for us all.”

Co-organiser Samantha Boyd adds: “The support we’ve had on this case has been absolutely phenomenal, not just from Somerset landlords, but from landlords right around the country too. Even better, the money that we raised to take North Somerset Council to judicial review can now be spent on property improvements to provide better homes and communities for all.

“All councils need to take a leaf out of North Somerset Council’s book and listen to their good landlords and tenants, for a fair and just outcome for everyone.”