Posts with tag: legislation

Rogue landlord fined for health and safety breach

Published On: July 27, 2016 at 11:02 am

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Another landlord has been handed a substantial fine after refusing to adhere to an improvement notice on his property.

Sunderland Magistrates’ Court issued a fine to Joseph Benedikt, after repeatedly refusing to carry out improvements on his cold and damp property in Chardmore Road, London.

Fines

Benedikt was given a fine of £2,000, told to pay £998 in costs and a £200 victim surcharge as a result of his negligence.

This hearing followed a previous guilty plea to further non-compliance with an Improvement Notice, relating to a different property in Corporation Road, Hendon, Sunderland. Mr Benedikt left the property in a poor state of repair, despite receiving a schedule of works from Sunderland City Council’s private housing team.

The property was found to have:

  • structural damage
  • inadequate heating
  • no insulation
  • damp
  • mould

As a result, conditions in the property were found to pose a serious health risk to the pregnant teen and her two children residing there. Despite this, Benedikt refused to bring the property up to acceptable standards.

Rogue landlord fined for health and safety breach

Rogue landlord fined for health and safety breach

Enforcement

Councillor Graeme Miller observed, ‘this prosecution is a demonstration of our willingness to take enforcement action against landlords whose rental properties fail to meet the required standards and a reminder of what can happen if they fail to meet their legal responsibilities.’[1]

‘It also shows what an important part the selective licensing scheme played in beginning the continuing process to improve private rented properties in Hendon, Miller added.[1]

Concluding, he said, ‘we always strive to work in partnership with private landlords and encourage them to join the accredited landlords’ scheme. We can achieve so much more by providing people with standards of rented accommodation they deserve and landlords with the type of tenants who will respect their properties and contribute to the communities that they’re living in.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/7/landlord-who-put-young-familys-health-and-safety-at-risk-fined

Would-be BTL investors urged against alternatives

Published On: May 17, 2016 at 8:46 am

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A leading online letting agency is urging would-be buy-to-let landlords deterred by the Government’s legislation changes to resist investing in other alternatives.

An investigation into 500 investors by PropertyLetByUs found that many are considering overseas investment. European destinations such as France and Spain were found to be popular countries.

Challenges

However, the agency is warning investors tempted to invest abroad to think about the challenges of different fiscal regimes.

Managing director of PropertyLetByUs, Jane Morris, said, ‘each country has different tax laws relating to property and they can change quickly, with little warning. For example, in 2012 the French Government imposed a 15.5% social charge on capital gains from the sale of second homes or rental income-a measure which was estimated to bring in €250 million a year. Tax on rental income rose overnight, from 20% to 35.5 % while capital gains tax on property sales rose from 19% to 34.5%.’[1]

‘These new tax measures hit overseas investors hard and meant that a British couple who bought a French property for €200,000 20 years ago and were selling it for €750,000 would have to pay almost €60,000 in charges, on top of the existing capital gains tax. They received no credit against their UK tax bill for this amount,’ Morris continued.[1]

Would-be BTL investors urged against alternatives

Would-be BTL investors urged against alternatives

Tax

This tax implication was overturned last year by the European Union, which decided the measure was illegal. As such, France was ordered to repay tens of millions of euros to UK and other EU non-resident owners, who had rented or sold their properties in the last two or three years.

Morris noted that, ‘clearly, overseas property taxation can be more costly than the UK, despite often much lower property prices. It is important that landlords take into account potential tax hikes and don’t get sucked into the marketing hype that surrounds overseas property investment.’[1]

‘Property experts will often highlight new markets they appear to be investment hotspots and you may be able to find bargains in countries where prices have fallen dramatically, but it’s often wiser to buy in more established markets,’ she concluded.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/5/letting-agency-warns-against-easy-alternatives-to-buy-to-let

CML lambasts Government for out of date information

Published On: March 24, 2016 at 10:23 am

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The Council of Mortgage Lenders (CML) has lambasted the Government for failing to update its Private Landlords’ Survey for the past six years.

If it had done so, the CML believe it may have had a ‘better understanding’ of the requirements of the private rental sector.

Resist reforms

Communications manager at the Council of Mortgage Lenders Bernard Clarke feels that the Government needs to resist with further reforms affecting the buy-to-let market.

Writing in a blog on the CML website, Mr Clarke said that landlords have yet to fully take in the series of tax changes that come into force next Friday-the 1st of April.

In addition, Clarke believes that buy-to-let lenders are extremely diverse, so will not be suited to the Government’s ‘one-size fits-all’ regulatory regime.

CML lambasts Government for out of date information

CML lambasts Government for out of date information

Limits

Mr Clarke went on to say that proposed legislation will allow the Bank of England’s Financial Policy Committee to put limits on buy-to-let loan LTV ratios. He also said that the Committee would be able to impose limits on interest cover ratios, which assess rental income relative to the total overall cost of the mortgage.

‘We believe that (tools to control buy to let lending) should only ever be used with great sensitivity and preferably only after consultation and the publication of analysis and assessment of the likely effects,’ Clarke observed.[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/3/mortgage-lenders-tick-off-government-for-out-of-date-lettings-info

 

 

Legislation could seriously affect accidental landlords

Published On: March 10, 2016 at 11:55 am

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So-called accidental landlords are being warned that they could be refused cheaper mortgages, due to a lesser-known piece of legislation.

The EU Mortgage Credit Directive, coming into force at the end of the month, has been designed to stop, ‘risky’ mortgage lending. In addition, the initiative redefines landlord mortgages as ‘consumer lending,’ forcing them to be subject to tighter lending criteria.

Checks

In addition, new mortgage affordability checks will be introduced as part of the scheme. These are being implemented to ensure borrowers can afford their repayments-not only at their initial rate, but also if rates were to spiral by up to 6%.

These rules will also apply to those who are remortgaging. This means homeowners who are changing mortgage deals in order to take advantage of lower rates could be told they are unable to make repayments cheaper than what they are already making.

This move is most likely to impact on so-called accidental landlords-those who did not purchase a home intending to rent it out, but circumstances have forced them to do so.

Unaware

Alarming research from Direct Line indicates that 62% of new buy-to-let mortgage applicants are unaware of the changes. This figure increases to 71% for accidental landlords.

From next year, alterations to mortgage tax relief will see landlords unable to claim tax relief on mortgage repayments. At present, landlords can deduct mortgage interest repayments from their bill. However, the changes will see them instead receive a tax credit equivalent to 20% basic-rate tax on this amount. If interest rates were to rise, some landlords could well finish up paying tax on losses.

Legislation could seriously affect accidental landlords

Legislation could seriously affect accidental landlords

Ludicrous

Ajay Jagota, founder and MD of sales and lettings firm KIS, noted, ‘it sounds completely ludicrous for lenders to deny people cheaper mortgages because they can’t afford them and there’s good reason for that-it is completely ludicrous!’[1]

‘There is no question that this directive will create mortgage prisoners, people stuck overpaying on loans at a time when mortgage rates could be falling to their lowest ever levels. Literally anyone can end up an accidental landlord-through inheritance, through family breakdown or through having to relocate for work. Most of the time they have no ambition other than to cover their costs until their circumstances change and there’s a real risk that they might have to raise their rents just to cover those costs,’ he continued.[1]

Concluding, Jagota said, ‘lenders should have the right to waive the affordability criteria when they’re remortgaging if there’s no increase in borrowing. If nothing else, this directive seems to fly in the face of EU’s commitment to a free market by denying people access to the full range of financial products available to them.’

[1] http://www.propertyreporter.co.uk/landlords/eu-tells-accidental-landlords-they-cheaper-mortgages.html

Many landlords still not prepared for Right to Rent

Published On: January 24, 2016 at 11:49 am

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A concerning new report has indicated that only half of UK landlords are ready for the Right to Rent rollout, which is set to come into effect in less than 2 weeks (February 1st).

Urban.co.uk conducted a survey of 5,000 landlords and found that 20% wrongly believed that they had until April 2017 to prepare for the changes. 3% thought they had until 2018!

Knowledge

These alarming findings were part of Urban.co.uk’s Landlord Knowledge Survey Report, which questioned landlords on issues relating to the leasing market.

With a number of new legislations coming into play in 2016 and landlords’ responsibilities growing, the investigation provided cause for concern.

Key findings from the report include:

  • just 10% of landlords provide the correct information to their tenants at the start of a new tenancy
  • 90% of landlords could not articulate the characteristics of a HMO
  • 16% did not put a valid contact address on their tenancy agreements, something which could deem contracts being null and void

‘There has been an influx of new legislation relating to the rental market made in recent years and we know that UK landlords are struggling to keep on top of these changes,’ noted Adam Male, Co-Founder or Urban.co.uk. ‘Despite knowing many of the basics, many find it difficult to navigate the minefield of changing renting rights and wrongs and this is particularly so for accidental landlords.’[1]

Many landlords still not prepared for Right to Rent

Many landlords still not prepared for Right to Rent

Reassuring

Despite this perceived lack of understanding in some areas, thankfully, most landlords were found to be knowledgeable of most other rental issues. 77% were aware of the up-to-date Energy Performance Certificate requirements, with 95% of landlords able to identify their gas safety responsibilities.

76% of respondents knew their smoke alarm requirements, with 7% saying they put one in every room.

According to the research, the most knowledgeable landlords are located in Southampton, with the least located in Newcastle-under-Lyme.

Male went on to say, ‘it’s great to hear that knowledge about things such as gas safety is widely understood and implemented landlord legislation, however there is still a long way to go in educating landlords about the varying aspects of renting. New regulations such as the Right to Rent have the potential to stop back door lettings and create a better environment for all, however this will only happen if the scheme is communicated to landlords properly. We as an organisation want to do our bit to clean up the industry and help landlords protect themselves from significant financial risk.’[1]

[1] http://www.propertyreporter.co.uk/landlords/are-landlords-prepared-for-%C3%A3%C2%A2%C3%AB%C5%93right-to-rent%C3%A3%C2%A2%C3%A2%E2%80%9E%C2%A2.html

Scottish agents opposed to upcoming legislation

Published On: November 4, 2015 at 10:25 am

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A collection of 56 letting agents have poured scorn on new legislation designed to alter Scotland’s private rental sector.

The agents believe that instead of reforming, the legislation will actually make it harder for landlords and letting agents to combat anti-social behaviour in their properties.

Opposition

Representing the landlords of over 16,000 properties, the agents have signed a statement stating that they are worried about the impact of the proposed Private Housing (Tenancies) (Scotland) Bill. They argue that by removing a landlord’s right to allow a tenancy to come to natural conclusion, the Bill-if enacted-will make it more difficult for them to tackle anti-social behavior.

Some of the agents have said that are aware of landlords that have encountered anti-social behaviour in their property and have been unable to make the tenant improve their conduct. As a result, the landlord allowed a tenancy agreement to come to a natural end, which allowed for the adequate notice period as outlined in the original contract.

However, landlords are concerned that in the future, neighbours who complain of anti-social behaviour would be forced to lodge an official complaint to the police. In addition, they would have to be willing to give public evidence to a tribunal before any action could be taken to remove a tenant.

In their statement, the agents said that this will no only increase the time it takes to combat the issue, many people affected will feel threatened and may not be willing to testify.

Scottish agents opposed to upcoming legislation

Scottish agents opposed to upcoming legislation

Powerless

The statement reads that, ‘landlords will be powerless to act unless such public complaints are made.’ John Blackwood, chief executive of the Scottish Association of Landlords, said, ‘a key complaint we have heard from our own members, as well as from those in our letting agent wing, is that the measures in the Private Housing (Tenancies) (Scotland) Bill will make it harder to tackle anti-social behavior.’[1]

‘The people often most affected by anti-social behaviour are those in vulnerable groups such as older people who could feel threatened by a neighbour. They may be less likely to publicly complain, let alone be willing to take part in what is a formal legal process. These people would in future have to suffer in silence and our landlords would be powerless to help,’ he added. [1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2015/11/agents-say-new-law-would-make-it-harder-to-control-anti-social-tenants