Written By Em

Em

Em Morley

HMO Landlord Ordered to Pay £29,000 for Failing to License

Published On: January 19, 2016 at 12:42 pm

Author:

Categories: Landlord News

Tags: ,,,

A landlord in Leicester has been ordered to pay around £29,000 in fines and court costs after renting out a House in Multiple Occupation (HMO) without a license.

HMO Landlord Ordered to Pay £29,000 for Failing to License

HMO Landlord Ordered to Pay £29,000 for Failing to License

Samsud Wadi, of Evington, appeared before Leicester Crown Court on Thursday 14th January for a series of offences relating to the management of the property that he owned and failed to license.

The court was told that Wadi’s HMO, at 14 Humberstone Drive, contained eight bedsits over three storeys with some shared facilities, meaning that it should have been licensed as a HMO.

Wadi, 40, was informed that he required a HMO license in April 2015, but he did not act upon the advice.

On 10th December, he pleaded guilty to the offences before Leicester Magistrates’ Court. However, the case was referred to the crown court, as it has greater sentencing powers.

Leicester Crown Court fined Wadi £12,000 for operating an unlicensed HMO and fined him a total of £13,000 for breaching five HMO management regulations. Additionally, he was ordered to pay £3,700 in prosecution costs.

The Assistant City Mayor for Neighbourhood Services at Leicester City Council, Councillor Kirk Master, comments: “Licensing regulations for HMOs are there to protect the rights of tenants, and landlords have an obligation to ensure their properties are correctly licensed.

“In this instance, that was not done, despite the landlord being advised that he needed to do so, leaving us with no option but to take legal action against him.”1 

If you own a property that is rented to five or more people that form more than one household, is at least three storeys high and contains shared facilities (such as a bathroom or kitchen), then you must apply for a HMO license.

Don’t be caught out! Check LandlordNews.co.uk for all the landlord law you need to know.

1 https://www.leicester.gov.uk/news/news-story-details?nId=88535

 

 

 

 

House prices up 7.7% in November-ONS

Published On: January 19, 2016 at 12:13 pm

Author:

Categories: Property News

Tags: ,,,,

Figures released today from the Office for National Statistics (ONS) reveal that average property prices in the UK rose by 7.7% in the year to November 2015. This figure was up from the 7.0% recorded in the year to October.

Rises

Property price annual inflation was found to be 8.3% in England, 1.3% in Wales, 0.4% in Scotland and 4.6% in Northern Ireland. Annual house price increases in England were propelled by a yearly increase of 10.2% in the East, 9.8% in the South East and 9.8% in London.

With the exception of the capital and the South East, UK property prices rose by 5.8% in the twelve months to November of last year.

In November 2015, property prices paid by first-time buyers were 7.4% greater on average than those recorded one year previously. For existing owner-occupiers, values increased by 7.8% over the same period.

‘House prices in November saw the biggest annual increase in eight months, despite traditionally being a quieter time in the housing market,’ observed Brian Murphy, head of lending at the Mortgage Advice Bureau. ‘Those lucky enough to already be on the property ladder are the clear winners of this boom, as homeowners trading up to the next rung take advantage of improving property values. Increased equity means even those not looking to sell can benefit by switching to a more affordable mortgage deal.’[1]

House prices up 7.7% in November-ONS

House prices up 7.7% in November-ONS

Rush

Murphy feels that, ‘the heat is set to rise in the buy-to-let and second home market in the short-term, as buyers rush to complete before the changes to Stamp Duty kick in in April.’ Continuing, he said, ‘in the long-term, the dearth of properties available combined with rampant demand means house price growth isn’t likely to slow any time soon. This creates clear affordability concerns for first-time buyers.’[1]

‘Government schemes to increase affordable housing will put a bandage over the wound: but without a significant and sustained increase in the construction of new homes, the current housing crisis isn’t likely to be cured any time soon,’ he concluded.[1]

Adrian Whittaker, Sales Director at New Street Mortgages, noted, ‘these figures from the ONS are typical of the strong growth that the housing market experienced last year, as house prices rose well above the level of inflation. A supply deficit and rising demand as more people looked to purchase property is squeezing the market and this puts vendors in a position where the can select the most appropriate buyer.’[1]

‘Increasing gulf ‘

Stephen Smith, Director of Legal and General Housing Partnerships, also said, ‘house prices are continuing to rise well above inflation which is pricing many prospective buyers out of the market. Prices have also risen significantly on an annual basis, exposing the increasing gulf between supply and demand.’[1]

‘Suitably sized housing needs to become more readily available at both ends of the market, to enable first time buyers to take their first steps onto the housing ladder and help last time buyers to ‘rightsize’, making life better for all. The Government needs to build  around 250,000 extra houses this year to give potential buyers any hope of finding their dream home. There are currently a number of constraints which elongate the house building process and the country should consider exploring alternative avenues to help speed up construction, such as modular housing,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/november-house-prices-gained-77.html

 

Property market enjoys positive start to the year

Published On: January 19, 2016 at 10:38 am

Author:

Categories: Property News

Tags: ,,,,

Latest index figures released by Rightmove suggest that the residential market has seen a positive start to 2016.

According to the data, property prices in England and Wales have risen by 0.5% month on month. In addition, values are up by 6.5% year on year, taking the average price of a property to £290,963. This represents the second highest festive period rise since 2007.

Positivity

There was good news for people looking to get onto the property market, with prices in the lower reaches of the sector, typically two bedroom homes, increasing by just 0.1%. Rightmove also said that traffic to its website was up by 21% on the same period in 2015.

Miles Shipside, Rightmove director and housing market analyst, said, ‘upwards price pressure remains, with the second highest rise seen at this time of year for nine years but encouragingly for first time buyers there’s more fresh choice with more property coming to market in their target sector.’[1]

‘With their asking prices pretty much the same as a month ago, perhaps the knock-on effects of the more punitive landlord tax regime have arrived early and they now face a dilemma over whether to buy now or wait to see if prices drop in this sector over the next few months,’ he added.[1]

Location variation

Further analysis of the data indicates that there are variations in different regions. Prices dropped by 0.9% in Greater London over the month to an average of £610,741, but were up by 7.8% year on year. In the East Midlands, monthly prices slipped by 1.8% to £182,318 and by 0.2% in Yorkshire and the Humber to £165,722. However, prices were up by 2.9% and 2.8% respectively in these regions over the course of the year.

The largest monthly increase was in the South West, up by 3.5% in the month to £282,373 and by 5.5% year on year. Prices also increased by 2.3% in the West Midlands to £198,595 and by 0.6% in the South East to £383,787. Year on year, prices in these regions rose by 4.9% and 7.3%.

In Wales, prices were up by 1.6% month on month and up 5.5% year on year, with prices standing at £166,051.

Property market enjoys positive start to the year

Property market enjoys positive start to the year

Shortage

Rightmove’s report also shows that a shortage of property being made available on the market was the catalyst for both higher prices and unsatisfied demand. Encouragingly, there has been an annual increase of 1.8% in fresh to market properties.

The most prominent increase has been in two-bedroom homes, with the likely beneficiaries first-time buyers or investors looking to purchase buy-to-let property before the stamp duty hike in April.

‘Perhaps because of the increased competition among sellers and a keenness to attract buy-to-let investors before the April deadline, prices have hardly increased month-on-month for properties with two bedrooms or fewer,’ Shipside noted.[1]

‘Rather than waiting until later in the year, having a good look around now while choice is up and interest rates remain unchanged could get you onto the ladder sooner and at an acceptable price. For several years buy to let investors have been enticed by high tenant demand and attractive returns, but as their window of opportunity starts to close it already appears to be opening wider for first time buyers,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/england-wales-home-prices-2016011911450.html

Landlords Shouldn’t Pay Extra for Limited Company Mortgages

Published On: January 19, 2016 at 9:18 am

Author:

Categories: Finance News

Tags: ,,,,,,

Mortgage lenders have been criticised for charging extra on limited company buy-to-let products by Foundation Home Loans (FHL), a specialist buy-to-let mortgage provider.

Landlords Shouldn't Pay Extra for Limited Company Mortgages

Landlords Shouldn’t Pay Extra for Limited Company Mortgages

In December, the firm announced that its own limited company buy-to-let mortgage would be priced at the same rate as its ordinary range.

The Commercial Director of FHL, Simon Bayley, believes that landlords should not be expected to pay extra due to a lack of choice, at a time when they face huge changes to their finances.

From April, mortgage interest tax relief for buy-to-let investors will be cut, along with a reduction in the Wear and Tear Allowance. However, those operating as limited companies will not be subject to the tax relief changes, leading to many landlords changing the way they run their lettings businesses.

Additionally, landlords and second homebuyers will be charged an extra 3% in Stamp Duty on property purchases.

Bayley expresses his concerns: “Certain lenders are charging up to 100bps extra for this product over their core range, when the risk is no different – effectively, asking landlords to pay any tax saving from using a limited liability company structure to the lender instead.

“Fortunately, the intermediary community is far too canny to go on selecting lenders who decide on this kind of pricing model. As soon as they realise that there are lenders, like FHL, who are not in the market to take short-term advantage of landlords keen to minimise their tax exposure, then I am sure that market forces will dictate that this kind of overpricing will quickly disappear. It certainly will not win any friends among advisers and their landlord clients in the long term.”1 

How will the tax changes affect your business?

Remember to check back to LandlordNews.co.uk for the latest landlord updates and advice.

1 http://www.financialreporter.co.uk/mortgages/industry-to-combat-limited-company-btl-charges.html

Next Phase of Universal Credit Roll Out for January

Published On: January 18, 2016 at 4:09 pm

Author:

Categories: Finance News

Tags: ,,

Next Phase of Universal Credit Roll Out for January

Next Phase of Universal Credit Roll Out for January

Last week, Universal Credit began its roll out across the country for 2016.

Today, more areas will be subject to the new benefits system, which sees six benefits roll into one. It is vital for landlords to be aware of whether their tenants will be receiving the new payments, as landlords will no longer be paid housing benefit directly.

As a result, they may see tenants fall into rent arrears.

Landlords with rental properties in the following postcode areas should discuss any financial changes with their tenants:

  • BR1 1, BR1 2, BR1 3, BR1 9, BR2, BR3 3, BR3 4, BR3 5, BR3 6, BR3 9, BR4, BR5, BR6 and BR7 in Bromley.
  • CR2, CR3 0, CR4 2, CE4 3, CR4 4, CR5 2, CR7, CR8 1, CR8 2, CR8 3, CR8 4 and CR8 9 in Croydon.
  • SE7, SE9 1, SE9 5, SE9 6, SE9 9, SE10 0, SE10 1, SE10 9, SE12 2, SE18, SE20, SE25 6 and SE25 9 of southeast London.
  • SW17 0, SW18 4, SW18 5, SE19 and SW20 of southwest London.
  • KT3 4, KT3 6, and KT4 8 in Kingston upon Thames.
  • TN16 1 and TN16 3 of Tonbridge.
  • DN8 4 and DN14 of Doncaster.
  • HU13 0, HU13 3, HU14, HU15, HU17 and HU18 in Hull.
  • S1, S2, S3, S4, S5, S6, S7, S8, S9, S10, S11, S12, S13, S14, S17, S20, S21 4, S21 5, S32, S33, S35, S36 1, S36 2, S36 3, S36 4 and S61 2 of Sheffield.
  • YO8 6, YO15, YO16, YO25, YO41, YO42 and YO43 of York.

We will be detailing all of the latest rollouts of the scheme on LandlordNews.co.uk, so remember to check back for landlord updates.

For the previous January roll out areas, go here: /universal-credit-january-roll-out/ 

Buy-to-let clampdown beginning to work?

Published On: January 18, 2016 at 2:36 pm

Author:

Categories: Landlord News

Tags: ,,,,,

The Chancellor’s clampdown on buy-to-let investment is already beginning to show signs of working, according to new research conducted by Rightmove.

Data released by the property website suggests that more properties have become available to first-time buyers, with prices also slowing. The firm suggests that there has been a 6.6% rise in two-bed flats, popular with this group, over the past year.

Availability

Two-bed flat availability is now at its greatest since 2007, according to the firm. In addition, their research suggests that buy-to-let landlords may be looking to sell their property before changes in tax relief and stamp duty come into effect.

‘With the monthly price increase in this sector at a near standstill, this suggests that some of the dynamics of the changing tax regime for buy-to-let investors are starting to play out sooner than expected,’ said Miles Shipside, director of Rightmove.[1]

‘For several years buy-to-let investors have been enticed by high tenant demand and attractive returns,’ he continued, before saying, ‘as their window of opportunity starts to close it already appears to be opening wider for first-time buyers.’[1]

Buy-to-let clampdown beginning to work?

Buy-to-let clampdown beginning to work?

Changes

During the summer, Chancellor Osborne slashed tax reliefs for buy-to-let landlords and went on to increase stamp duty on investment and ‘second’ homes in the Autumn Statement.

Prices in the mainstream market continued to rise, with Rightmove’s data suggesting the cost of a property coming to market was up by 0.5% in January, in comparison to December. In addition, demand on the Rightmove website in the first week of 2016 was up by 21% on the same period in 2015.

However, there was little in the way of relief for struggling tenants, with separate analysis by Countrywide suggesting rents rose by 3.1% in 2015. Company research director Johnny Morris said that, ‘2016 looks to be a complicated year for landlords,’ with the, ‘additional 3% stamp duty charge, stricter regulation and changes to tax relief from 2017 onwards will all take their toll on investor sentiment and impact behaviour.’[1]

‘With stock at a premium, the smaller landlords who decide to sell up will add upward pressure to rents although any rises will be tempered by affordability pressures,’ Morris added.[1]

[1] http://www.theguardian.com/business/2016/jan/18/jump-two-bed-flats-for-sale-landlords-selling-up?CMP=share_btn_tw