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Em Morley

Councillor calls for rent caps on benefit tenants

Published On: May 6, 2016 at 11:40 am

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The leader of Southend Council has proclaimed that he is in talks with the Government about the introduction of rent caps for tenants on benefit.

Ron Woodley, an independent councillor, said that his town is being treated as a dumping ground by London borough councils.

Struggles

Local Housing Allowance and the recent introduction of the housing allowance element in Universal Credit has seen many local authorities struggle to find affordable privately rented accommodation for the homeless. This is particularly true in more affluent areas.

Mr Woodley believes that London boroughs are sending these people to Southend as rents are considerably cheaper. Many London boroughs have market rents much greater than the Local Housing Allowance maximum of £26,000.

He believes that private rental charges to tenants on benefits should be reduced to those currently charged to tenants residing in social housing.

Affordability

Woodley observed that this, ‘would save the Government something like £14bn a year in housing benefit and would make housing in cities like London more affordable, so you’d stop the London boroughs sending people out of London because it’s cheaper elsewhere.’[1]

‘In many European countries they have some sort of cap on what people can charge in rented accommodation and I think we need this to stop the private rented sector running out of control, which is what it’s currently doing,’ he added.[1]

Councillor calls for rent caps on benefit tenants

Councillor calls for rent caps on benefit tenants

Dangers

However, Richard Hair of Hair & Son estate agents, based in Southend, has warned of the dangers that interference in the market could bring.

Hair noted, ‘The Government has an appalling record of interfering in the property market and there have been suggestions not long ago by the Labour Party of capping rent. Anyone interfering in any market place does so at considerable risk to the market place.’[1]

[1] http://www.propertyindustryeye.com/call-for-rent-caps-when-properties-let-to-tenants-on-benefit/

Landlords urged to join campaign against tax changes

Published On: May 6, 2016 at 11:00 am

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Buy-to-let landlords with mortgages on small-scale portfolios are being urged to join a campaign that promises to fight back against perceived unjust tax relief changes.

From next year, existing rules that allow landlords to offset their mortgage interest against tax will be slowly phased out. By April 202, these rules will be abolished altogether.

Changes

The changes to the amount of tax landlords can claim on their properties were announced by Chancellor George Osborne in last summer’s Budget. It is feared that these alterations could mean purchasing a buy-to-let property and subsequently renting it out will be unachievable for many.

According to Treasury estimates, the tax alterations will raise almost £1bn a year by 2021.

In light of the upcoming changes, campaigners are hoping to raise a £300,000 fee in order to launch a judicial review against the restrictions. Anyone pledging £100 or more to the campaign is being offered a complimentary ticket to a rally against the changes, being held in London on Thursday 9th June.

Landlords urged to join campaign against tax changes

Landlords urged to join campaign against tax changes

Backing

The campaign has already received some high-profile backing. Cherie Blair MBE QC has given her support to the opposition of the alterations, with her firm Omnia Strategy having sent a legal letter to HMRC in February. This letter said that the changes were in breach of a landlords’ human rights.

These challenges are also being backed by landlords Steve Bolton and Chris Cooper. Mr Bolton is the founder of Platinum Property Partners, specialising in buy-to-let, with a portfolio worth over £200m.

In a joint statement to landlords, the pair said, ‘with your continued financial backing and support, we plan to take the Government all the way to court and fight the strongest case that we can.’

‘Please spread the word far and wide amongst your community, especially fellow landlords, tenants, letting agents and others who will be adversely affected by this ludicrous legislation.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/5/landlords-urged-to-oppose-mortgage-tax-relief

 

 

New London Mayor Must Boost Rental Supply, Says Gill

Published On: May 6, 2016 at 10:58 am

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The Director of estate agents Your Move and Reeds Rains, Adrian Gill, has spoken out about what the new London mayor must do to boost private rental supply in the capital.

New London Mayor Must Boost Rental Supply, Says Gill

New London Mayor Must Boost Rental Supply, Says Gill

Whoever is voted the next Mayor of London – Sadiq Khan or Zac Goldsmith – must regard the private rental sector as an ally, not an enemy, according to Gill.

He describes London as “the capital of renting”, as many Londoners are priced out of homeownership by spiralling house prices. With so many residents forced to live in the private rental sector, Gill notes that London follows an entirely different set of housing rules to the rest of the UK.

“Our capital is suffering from a serious undersupply of homes to let, which is down to an enormous undersupply of landlords taking up investment opportunities,” he insists.

He reports that average rent prices in London have increased by 19% since the last mayoral election in May 2012, and by 35% since Boris Johnson was first elected in 2008.

“In stark contrast, rents across England and Wales as a whole have risen 19% since May 2008,” Gill says. “If London sets the trend for the nation, this acceleration should be a wake-up call.”

He believes: “To prevent a whirlpool of talent draining out of the capital, the new mayor needs to throw landlords a lifeline. To build a sustainable supply of homes to let for the next four years, the mayor must avoid populist anti-landlord policies that yield easy support in the short-term, but prevent people finding a place to rent further down the line. Instead, stimulating more – not less – investment from landlords is the way to keep rents more affordable.”1

Recent research has analysed which London mayoral candidate will be best for solving the capital’s housing crisis: /london-mayoral-candidate-will-solve-housing-crisis/

We will keep you updated as the results of the London mayoral election are revealed.

1 https://www.lettingagenttoday.co.uk/breaking-news/2016/5/agency-chief-warns-new-london-mayor-to-treat-rental-sector-as-an-ally

Agent who Conned Tenants Out of Deposits is Jailed

Published On: May 6, 2016 at 10:03 am

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A former estate agent who conned student tenants out of deposit money has been jailed.

Barinder Uppal, who worked for Reeds Rains in Coventry, conned overseas students and a man wanting to buy a property into paying deposits for housing that he could not offer them.

Uppal, 29, who allegedly turned up to property viewings in a Bentley, placed advertisements for the student accommodation online.

He would then arrange viewings before taking deposits from the students, some of whom were offered the same properties.

Prosecuting, Paul Dhami said: “All bar one were students who had come to study in the UK, so English was their second language and therefore there was a degree of vulnerability because he appeared to be bona fide.

“Some described him arriving in a white Bentley, giving the impression of being a successful businessman.”1 

Uppal made a total of £13,560 from the scam. He had already been given a conditional discharge for fraud in 2014.

After complaints were made to the police, Uppal said he had carried out the fraudulent activity to fund a gambling habit. He then lost his job.

The court was told that Uppal had only worked for Reeds Rains for six months, and is now going to Gamblers Anonymous.

Judge Sylvia de Bertodano jailed him for one year, after rejecting a defence argument that if he was given a suspended sentence, he could pay back the stolen funds with the help of his family.

The judge stated: “I don’t see why your family should bail you out – and this is not the sort of offence you can buy your way out of. There must be a custodial sentence that will be immediate.

“The message must go out that someone who uses their position to defraud vulnerable people in this way must go to custody.”1

There will now be a Proceeds of Crime hearing.

1 http://www.coventrytelegraph.net/news/coventry-news/overseas-students-conned-out-thousands-11289948

Call for action after agent jailed for £400k theft

Published On: May 6, 2016 at 9:08 am

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A property boss has warned that the alarming case of a rogue letting agent has underlined the need for urgent change in the private rental sector.

This week, rental manager Angela Clift from Tyneside, was jailed for two years after stealing £400,000 that she was supposed to have collected on behalf of landlords. The money was intended to have been taken on behalf of Newcastle based property firm Keith Pattinson.

Breathtaking

On raiding Clift’s property, police found expensive handbags, clothing and jewellery, not to mention an expensive sports car parked outside.

Upon sentencing, the judge described Clift’s actions as ‘breathtaking.’

Now, Ajay Jagota, founder of sales and lettings firm KIS, believes immediate change is needed to stop this kind of action happening again. At present, an estimated £500m worth of rental deposits are thought to be illegally held.

Jagota said, ‘although I wasn’t in court to hear the exact details of this case, incidents like these are the inevitable outcome of an industry where too much money is flowing around unnecessarily with inadequate oversight over where it ends up. You’ve got tenants handing over hundreds and thousands of pounds in deposits and rent and landlords acting in good faith that it will be money will dealt with appropriately. Of course most agents do just that, but five minutes on Google will show you that is not always the case.’[1]

Call for action after agent jailed for £400k theft

Call for action after agent jailed for £400k theft

Solution

Mr Jagota continued by saying, ‘we’re not just talking about a few quid here and there. We’ve got £500m of rental deposits apparently held illegally and firms collapsing owning hundreds of thousands of pounds-sometimes having been given a clean bill of health by industry watchdogs. And those are just the cases we hear about. That can’t be right.’[1]

‘The simplest solution is to stop taking deposits and move to an insurance-backed model. It’s not just that it works perfectly well in other industries, it’s that you’ think it was ludicrous if people did it any other way. If you rent a car, you don’t hand over hundreds of pounds before you’re given the keys on the understanding that you’re guaranteed to crash it!’[1]

Concluding, Jagota said, ‘the overall value of UK rental deposits is estimated to be £3.2bn. Having people handing over so much cash to an under-regulated industry is something which can’t continue-not when there are simple and effective solutions under our noses.’[1]

[1] http://www.propertyreporter.co.uk/landlords/letting-agent-jailed-after-breathtaking-%C3%A3%C2%A2400k-theft.html

Renting is More Expensive than Buying in Most of the UK

Published On: May 6, 2016 at 8:31 am

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The cost of renting a home is more expensive than buying a property in the majority of the UK, according to new data from Halifax.

The mortgage lender found that it takes longer to reach rental freedom day than it does to reach mortgage freedom day – this means that tenants spend more of their disposable income on housing than homeowners.

Renting is More Expensive than Buying in Most of the UK

Renting is More Expensive than Buying in Most of the UK

On average, mortgage borrowers would have earned enough to pay off their annual mortgage payments by 19th April, while renters will have only earned enough to cover their annual rent by 5th May.

The Halifax found that homeowners spend 29% of their disposable income on their mortgage, compared to 34% by tenants on their rent.

The figures were calculated by using average rent prices, house prices, net annual income and mortgage rates. The bank found that renting is more expensive than buying in all but one area.

For tenants in London, it takes more than half the year to reach rental freedom day, at 195 days. Londoners must wait until 13th July to have earned enough to cover their rent for the year. It takes homeowners in the capital until 26th June to cover the cost of their annual mortgage.

Contrastingly, renters in the North East take less than half the time to cover annual rent costs, at 96 days.

It takes 143 days to reach rental freedom day in the South West, 137 days in the South East, and 122 days in the North West.

After the North East, the regions with the shortest periods are Yorkshire and the Humber at 100 days, the East Midlands at 104, the West Midlands at 112, and 113 days in the East of England.

The Mortgage Director at Halifax, Craig McKinlay, comments: “For most homeowners, mortgage payments are the biggest outgoing every month; knowing they’ve earned enough to pay off their mortgage for another year should be a reassuring thought.

“On the other hand, those who rent will need to work a further couple of weeks to have earned enough to cover their annual rental cost.”

In Scotland and Northern Ireland, homeowners have earned enough to pay off their annual mortgage payments by 12th March, while in Wales, it is 1st April. There is no data available for rent costs in Scotland, Northern Ireland or Wales.

Rental freedom day is calculated by taking annual rent payments as a percentage of average disposable income.