Written By Em

Em

Em Morley

New Advice on Serving Section 21 Notices

Published On: December 2, 2015 at 12:27 pm

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Categories: Landlord News,Law News

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The Association of Residential Letting Agents (ARLA) has teamed up with Fixflo, a repairs software specialist, to create a series of timelines that help letting agents understand the changes to section 21 notices.

The new rules apply to every new tenancy in England that started on or after 1st October.

The timelines highlight the importance of providing an adequate response to each repair request from a tenant, if an agent or landlord wishes to be sure that a section 21 notice cannot be invalidated.

Managing Director of ARLA, David Cox, states: “It has become apparent through speaking to our members that the full scope of the changes has not been fully understood across the industry.

“Put simply, if you provide what the legislation considers to be an adequate response to every repair request, then any section 21 notice that you serve cannot be invalidated for being retaliatory.

“While each agency will need to make its own assessment of the legislation, as the law remains subject to interpretation by the courts, in the absence of further Government guidance, we consider that the Fixflo method for handling the need to provide an adequate response constitutes best practice for the lettings industry.”1

Legal lettings expert Tessa Shepperson adds: “I’m a trained lawyer who specialises in this area of law and it took me several hours to fully get to grips with these changes, which should, if properly drafted, have been readily understood by non-lawyers.

“While it’s still open for the courts to interpret the legislation as they see fit, providing an adequate response to every repair request and being able to evidence that response is the best way for anyone managing a property, whether landlord or agent, to protect their business.”1

Any cases under the new rules will not reach the courts until April 2016, due to timing restrictions.

Check back to Landlord News for the latest landlord law updates.

1 http://www.fixflo.com/blog/2015/12/Section-21-Changes-New-Guide-For-Letting-Agents

Bank of England Stress Tests Results Revealed

Published On: December 2, 2015 at 9:14 am

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Categories: Finance News

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Bank of England Stress Tests Results Revealed

Bank of England Stress Tests Results Revealed

The Bank of England (BoE) has revealed the results of its stress testing on the UK banking system. It plans to take action to cool the buy-to-let sector, as the market continues to grow.

The BoE has also informed UK banks that they could be forced to hold up to £10 billion of capital ahead of a potential economic downturn.

The stress tests were designed to measure how banks would deal with another financial crisis. The BoE reports that Standard Chartered and the Royal Bank of Scotland (RBS) are in the weakest financial positions.

It believes that both would have been unable to endure a shock to the financial system had they not already taken action to strengthen their financial position over the year.

For months, the BoE has raised concerns over the buy-to-let mortgage market. Although it has not taken immediate action to cool this sector, it announced that it is reviewing the lending criteria used by firms and is “ready to take action”.

It will also observe the impact of the extra 3% Stamp Duty imposed on buy-to-let landlords, as announced by Chancellor George Osborne in last week’s Autumn Statement.

The buy-to-let sector has experienced “rapid growth” recently, with lending rising 10% in the first nine months of 2015.

It is expected that changes to landlord taxes, including the reduction in buy-to-let mortgage interest tax relief from April 2017, will cause some investors to leave the market altogether or sell some of their properties. The additional Stamp Duty may also cool the market.

Read the Bank’s complete stress tests results here: http://www.bankofengland.co.uk/financialstability/Documents/fpc/results011215.pd

How do you think the buy-to-let sector will change in the short term and further into the future?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dress Up Your Front Door for the Festive Season

Published On: December 1, 2015 at 4:32 pm

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Categories: Property News

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Recently, we reported that many prospective tenants are hoping to find a new home by Christmas and be moved in. If you’re a landlord with a void period or a tenancy coming to an end, now is the perfect time to really let your property make an entrance.

You may not have the means to give your rental property a complete makeover, but as the festive season kicks in, there is one easy way to instantly improve the look of a rental home. Landlords, why not give your front door an update with a new lick of paint?

Repainting your front door can cost as little as £40 in materials, but makes a huge impact on first impressions. This is particularly important if you are looking to sell your property at this time – did you know that Rightmove reported a whopping 15.7m visits to its site between Christmas and New Year in 2014? With figures like this, make sure these keen Christmas buyers notice your property.

If you’ll be having viewings over Christmas, either with hopeful tenants or prospective buyers, further dress up your front door with a festive wreath that complements your new colour.

So which colour should you choose? Some of the top paint brands have revealed which colours are most popular at present and which they think will be big in 2016. Could one of these grace your front door in the next couple of weeks?

Farrow & Ball 

Farrow & Ball reports that one of its current bestsellers is Calke Green No.34, a rich, forest-y hue that would look perfect on a country cottage. It predicts that Dix Blue No.82 will be a hit next year – this vintage-inspired colour would add a quirky touch to a modern townhouse.

Sandtex

Sandtex’s exterior gloss paint is long lasting and classic. Its Pillar Box Red is traditional yet stands out on any street. It expects its calming, retro Gentle Blue to be popular in the New Year.

Little Greene 

At present, Little Greene’s bestsellers are very dark hues, such as the deep navy Dock Blue. But the company is expecting things to be a little brighter in 2016 – it predicts the daring, mustard yellow Mister David will be revitalising front doors everywhere.

Mylands

It seems that duskier colours are also proving popular at Mylands, with its shadowy-grey Oratory No.237 noted as a bestseller for this year. It forecasts a similar theme for next year, with the historical architecture-inspired Blueprint No.50 set for a hit year. Could your property reflect traditional blueprints worthy of the National Archives?

Paint by Conran

Paint by Conran’s Poppy Pop has been popular this year – a modern take on the classic red front door. The colour is inspired by Remembrance Day poppies and would really make your house pop. In 2016, the company expects the pale, musky November Gorse to make a splash.

With so many delightful, different and distinctive shades to choose from, it couldn’t be easier to give your property a colourful edge and give your tenants a home to remember.

Bridging Specialist Launches Product to Release Landlord Equity

Published On: December 1, 2015 at 4:04 pm

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Categories: Finance News

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Bridging Specialist Launches Product to Release Landlord Equity

Bridging Specialist Launches Product to Release Landlord Equity

Recent research found that £70 billion has been added to buy-to-let equity in the past two years, as property prices have increased by 15% across the UK and by a huge 30% in London.

As a result, commercial bridging specialist JustBridging.co.uk has launched a product and dedicated broker/financial intermediary channel. The product aims to release the billions of pounds in property professionals’ portfolios.

Director of JustBridging.co.uk, John Davies, explains: “Our research shows property professionals are equity rich but options poor. This is because prior to the financial crisis, many had the foresight to take out tracker mortgages around just 0.5% to 1% above base rate.

“Understandably, the last thing they want to do is unlock equity in their portfolios by remortgaging, as this would significantly increase their overall borrowing costs. This can be extremely frustrating, as they are unable to use their equity to take on additional properties or improve their housing stock.”

This annoyance has led to JustBridging.co.uk launching its PortfolioBuilder product, which provides flexible funding solutions from £10,000-£500,000 for established property businesses in the UK that own at least one commercial property, including buy-to-lets.

The product works as a replica of a second charge bridging loan, but with a much higher than standard loan-to-value (LTV) required. It is also an exact replica of a normal bank overdraft, which aids landlords with late rent payments and allows the release of funds for repairs and maintenance work.

Davies concludes: “We are a lender to the business model and not a property lender. We focus on how the business is being managed and who is managing it. This results in potential access to loans at significantly higher LTVs if security is taken over real assets.”

Have you seen your equity change in the last two years?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxman recoups £301.8m in unpaid tax

Published On: December 1, 2015 at 2:45 pm

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Private client law firm Collyer Bristow has estimated that the British taxman snared £301.8m in unpaid property tax during the last year. This has been called an aggressive clampdown on those who actively avoid paying stamp duty.

HMRC’s new Counter Avoidance Directorate collected the monies during the last twelve months as part of an increased no nonsense policy on Stamp Duty and Land Tax (SDLT) avoidance.

Success

The firm said that this data was provided to them by HMRC and indicates that the scheme is proving a success. The Counter Avoidance Directorate was set up in April 2014, with the intention of bringing together HMRC’s work on tax avoidance and policy.

James Badcock, partner at Collyer Bristow, noted, ‘the Government’s aggressive clamp down on SDLT avoidance schemes over the last few years is now bearing fruit. The high returns from compliance investigations mean that this area is likely to remain under the spotlight for some time to come.’[1]

He went on to point out that property values have soared over recent years, particularly in London and the South East. As a result, many taxpayers have seen a more substantial SDLT bill.

Taxman recoups £301.8m in unpaid tax

Taxman recoups £301.8m in unpaid tax

‘Avoidance schemes were being used to reduce SDLT on what for London are relatively modest properties in the £1m region as well as very high value properties. As well as the Government closing down schemes with legislation, HMRC has tackled previous planning through the disclosure regime, better resourced investigations and litigation,’ Badcock continued.[1]

Advice

Mr Badcock also observed that in many cases, there is likely to be a legal justification for transactions that allowed an SDLT liability to be missed. ‘Individuals who decided to engage in the planning because it seemed so easy at the time may not have the stomach for the fight once faced with a HMRC challenge. This can be expensive but another critical factor is a climate in which engaging in abusive tax avoidance can cause reputational damage to those in the public eye,’ he said.[1]

[1] http://www.propertywire.com/news/europe/uk-property-tax-crackdown-2015120111265.html

 

Millionaires Finding the London Property Market Too Expensive

Published On: December 1, 2015 at 1:11 pm

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Categories: Property News

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Millionaires Finding the London Property Market Too Expensive

Millionaires Finding the London Property Market Too Expensive

It appears that the London property market is too expensive even for the millionaires looking to live in the capital, according to new research.

A new report from London agent Beauchamp Estates and New York estate agent Leslie J Garfield found that UK millionaires are now searching for homes in New York, as London is too pricey.

The firms saw a 7% increase in London-based high net worth individuals looking to buy prime residential property in New York.

Additionally, there has been a rise of 10% in London-based buyers searching for luxury homes in Miami and Los Angeles.

In a recent wealth report, the agents found that prime property is twice as expensive in London than New York on a cost per square foot basis.

For example, a large property in Knightsbridge costs around £2,195 per square foot, compared to £1,196 per square foot in the Upper East Side of Manhattan.

However, homes in Manhattan are typically larger than in London, so the overall prices are higher.

UK buyers looking for a home in Manhattan generally wish to spend up to £3.95m on a luxury apartment, while New York buyers searching in London spend around £4.1m.

There are currently over 120,000 British expats living in New York and more than 197,000 American expats living in the UK, mostly in London and the Home Counties.

Both London and New York offer luxurious lifestyles, with 76 Michelin-starred restaurants in Manhattan and 65 in London. London has more museums – 173 compared to 131 in New York – and more art galleries – 857 to 721. However, London is double the size of New York City, at 305 square miles.

Prime property buyers are also hit by 12% Stamp Duty in London. In New York, vendors pay a real estate transfer tax, which is calculated at almost $2 for every $500 of the purchase price. However, buyers do pay a mansion tax of 2% of the price when the home costs more than $1m.