Recent news items of interest to local landlords, use the search option above to find specific topics.
We have received a request from the RLA that anyone adversely affected by the changes to mortgage interest relief get involved in their lobbying activity - full details below and as in so many previous newsletters, we do urge all members to check the impact of these changes using our simple calculator on our home page as many landlords continue to think they will be unaffected only to find that the changes will push them into a higher rate tax band and potentially, taxes could be greater than profits.
Who knows whether Flick Drummond and Alan Mac, our local MPs, were influenced by the PDPLA's plea for support delivered by our own Tony Athill, but on Friday (28/10) they helped vote the Bill on to its next stage. If and when enacted, the bill will stop our Local Authorities advising tenants issued with a section 21 repossession order to sit it out and make us get a court order and perhaps even employ bailiffs.
(Note the picture above was taken recently outside the council offices in Portsmouth's Guildhall Square - all other photos in this article were taken in the same vicinity)
The government is running a new consultation to get feedback on its proposal to extend mandatory licensing to all properties with 5 or more tenants (today a property needs to be spread across 3 or more floors to need a mandatory licence) and also, to impose minimum room sizes on tenanted accommodation. The consultation runs until 13th December and you can make your views known here.
Tenancy agreements are being broken by one in seven renters breaching one or more rules according to Direct Line company. From its research it also claims that 11% of tenants were unaware of whether they had in fact broken any of the rules outlined in their agreement.
HMRC are keen to get landlords submitting quarterly returns by 2018, they state, "The way you interact with the tax system is changing. From 2018 it will become increasingly digital and most businesses, the self-employed and landlords will need to use software or apps to keep their business records, and to update HMRC quarterly. The underlying tax rules will be simplified to support these changes."
The Government is imposing lower caps on household benefits. This is the next stage in their attempts to force more people into work and to ensure they are better off in work. For some families this will have a dramatic impact on their finances and they will have to make changes. If they do not, they may find it difficult to pay their rent. If you have tenant families who are not exempt you are advised to talk to them soon especially if they are inclined to put off difficult decisions. The caps will apply some time after November 7th. DWP are writing to everyone they expect to be affected.
Earlier this month the PDPLA was contacted by a desperate student who said, "I want to ask what can I do if my landlord is ignoring me? I am from Malaysia just arrived Portsmouth yesterday. I"ve been calling the number that he gave me in the agreement but there's no answer. If you can guide me, it would be much appreciated. I made the agreement on 9th July and already paid the rent and the deposit. I hope it is not a scam because he gave me all the right details and a copy of his passport etc."
The bad news is that this was a scam, the good news is that all the appropriate organisations pulled together and this student now has a room in one of the University student halls, though he has lost a lot of money. Read on for details of the scam and how it can be avoided...
In response to a consultation being run by the government, the PDPLA has put its weight firmly behind the introduction of a scheme to regulate letting agents, forcing them to protect any monies they receive from landlords or tenants.
We stated, "There is general agreement that CMP is a necessary evil. In a small survey of agent members only one felt that he was already overloaded by regulation and CMP was not justified.
In Portsmouth alone members and tenants have lost thousands of pounds when four specific agents ceased trading.
One of our members is an experienced landlord who is cautious and streetwise. He manages his own rental properties but occasionally uses an agent to find tenants. A local firm that he had used before (Professional Tenant Finders) found him tenants for two properties. They took two deposit and the landlord ('W') assumed they had protected them as required but they had not. 'W' ended up having to repay the tenants £14750 deposits out of his own pocket."
Read on for more of our feedback on the consultation....
This months governance team meeting was cancelled but we did learn some interesting facts about the progress of HMO licensing in Southsea (PO1, PO4 & PO5) and also received a plea about student rubbish when they move out in the summer.
A Portsmouth City Council Planning Committee decision to block a conversion of a 15 room care home into a 12 room HMO because of local residents concerns about the impact on parking and traffic has been overturned on appeal.
The inspector who reviewed and overturned the decision, stated "There was no substantiated evidence submitted with the appeal to demonstrate that the use of the property as a 12 bedroom HMO would generate a significantly greater number of movements than the former nursing home"
The Council were also ordered to pay all costs involved on the basis that they had acted unreasonably. This is the 2nd case this month that they have lost on appeal.
Full details follow....
Hopefully by now, all of our members will be up to date on the tax changes announced over the past year that will affect them.
As mentioned last month, if you have any mortgages and you do not operate as a limited company, your tax liability will change - see our calculator (accessible on our home page or here).
Conversely, see the details of our July members meeting 'Tax for the Terrified' or come to our September meeting where a local accountant will talk about various ways to cope with the impact of these changes.
Alternatively, read the summary of changes as published recently by HMRC and sent to us kindly by member, Dave Heard.
This question comes up every year - obviously in a purpose built hall of residence a student would expect to be able to lock the door to their room, but in a well maintained Victorian house, let to 3 or 4 friends, is it justified for them to ask for locks on the doors to their rooms?
Most landlords understandably want to maintain the character (and value) of their houses and don't want Yale locks throughout the property making it look less like a home and more like a bedsit.
Advice from the relevant authorities varies but there is a solution....
I think we all know there is no such thing as a typical landlord - we all come from different backgrounds with differing aims and objectives, indeed many never intend to be landlords at all and just find themselves with an empty property for some reason.
However, we frequently see surveys that try to summarise the key attributes that define a landlord - if only it was so easy, we could send them all a letter asking them to join the PDPLA! The latest such survey has been commissioned by the Council of Mortgage Lenders (so not independent) and does not state how large the sample population was or how it was comprised. Whilst not ignoring this dubious authenticity, it does come up with a key finding that does ring true - most landlords see property rental as a part-time activity that supplements their income. (We do hope they did not pay too much to work this out - but anyway, for more information do read the full article from the CML below).
The Government has addressed the confusion over rules regarding Right to Rent checks on foreign students coming to start courses in the UK.
The RLA approached the Home Office asking for clarification on whether checks must be carried out twice - when agreeing the tenancy, potentially months in advance, and again 28 days or less before students were due to move in.
The Law Society has released a new practice note on electronic signatures with the aim of increasing confidence in the use of electronic signatures for commercial contracts.
This confirms the PDPLA position, presented by Alwin at our April 2016 members meeting, that members should look at this option as a means of reducing paperwork and saving time and money, it also confirms once again that the PDPLA are 'ahead of the curve' with new developments in the practice of letting. (Original April article here)
The question to the Information Commissioners Office raised jointly by the PDPLA and Portsmouth City Council, asking for clarification on the councils interpretation of the Housing Act - specifically whether the council is obliged to give names and addresses of landlords of licensed HMO's in Southsea to anyone who asks, has resulted in a ruling that what PCC are doing is correct and legal.
We fear that our question was not properly understood and plan to appeal.
Being a landlord is more complicated than most of us realise. The laws affecting us are changing all the time and even experienced landlords are omitting to carry out some mandatory requirements.
The PDPLA Landlords" Checklist has been created to assist landlords, especially less experienced landlords, in managing a tenancy.
As our use of the internet continues to grow so too does our list of usernames and passwords for the various websites we build a relationship with. We also know that many of you have difficulty remembering your PDPLA login credentials - so we have written this article to help you with this problem.
In an ideal world passwords should be a non-dictionary long mixture of upper and lowercase alpha-numeric characters with symbol/s included - and not used on more than one site. Keeping track of these passwords (and even creating them) is an ongoing and increasing challenge for all web users. However, there are systems available that have been widely adopted, tested and found to be very secure and are available to all that can take much of the pain away.
Solutions do exist for this problem...
We commented previously on the proposal for a new student hall on the site of Chaucer House and the former Navigators pub. Full details of what is proposed are now available here.
Unite, who will own and manage the property, said:
We received the following update from John Saulet of Saulet Townshend Limited, Solicitors which includes a useful update on recovering abandoned premises.
We advertised a webinar being hosted by the Sheriffs Office about evicting problem tenants last month and this is the review we received from a member:
"Other people from the PDPLA may have attended the webinar on eviction. I have not got much out of it as I was unable to turn back to any slides either then or now. I would not be able to carry out an eviction procedure using the advice given though I might take the advice and use the sheriff officers to review the case, do all the work in court and what have you.. I think the speaker whizzed past critical details as part of a sales pitch and why not? The webinar was scheduled to be 1 hour but went on longer without me. It had a delightfully homespun approach to technology.
At our June members meeting Jane Hoskins and the team from Southern Water gave an enlightening talk on how sewer blockages occur and why they believe that in some cases they are legally able to reclaim costs from the landlord of the property.
Their talk was informative and logical, though many key elements were subsequently contested by a number of PDPLA members.
Some members may have seen the brief item at the bottom of the Streetwise column in The News on 16th June, thanking the PDPLA for our comments and signposting readers either to PCC Private Sector Housing Standards or the PDPLA. Whilst it was positive PR for us, it was still a small and somewhat reluctant correction to the original misleading comments.
Read our full response here:
For those who like to plan their expenditure, B&Q have kindly sent through a copy of the masterfile used to calculate our discounts on products when we use our B&Q Tradepoint cards. The full list is available here.
However, to whet your appetite, some of the best discounts compared to 'normal Tradepoint users' (who themselves are seeing discounts of 5-15% over retail customers), read on...
According to the RLA, their campaigning to challenge proposed restrictions to mortgage interest relief is starting to make an impact in Westminster, with a surge of support from Tory backbenchers.
A number of Conservative MPs are now openly challenging the Government on the changes, which will see mortgage interest tax relief restricted to a basic rate, even for higher rate-paying landlords
From the RLA Landlord News Hub:
Rogue landlords can be banned from renting homes under new rules brought in by the Government"s Housing and Planning Bill.
New legislation also includes plans for the creation of database of criminal landlords and agents - as well as powers to impose civil penalties of up to £30,000.
The Government"s Housing and Planning Bill finally received Royal Assent last week after a prolonged period of Parliamentary ping pong. So what happens next?
RLA policy director David Smith has produced a new document updating landlords on changes relating to the Government"s Right to Rent checks following the introduction of the Immigration Act 2016.
Ahead of our July members meeting, where we plan to cover the basics of how to manage your paperwork as a landlord - from forms and records to taxes and expenses, Morris Crocker Chartered Accountants have issued a very useful guide to the tax implications of being a landlord - covering details such as 'when you become a landlord' for tax purposes all the way through to 'when you stop being a landlord' for tax purposes.
The PDPLA are very concerned that many landlords still do not understand how much more tax they will need to pay on let properties under new rules - see our new calculator - just enter 4 numbers: Your total letting income (rents received), your income from other sources, the amount you pay on mortgages and the other expenses you pay to maintain and keep your houses - the calculator will then tell you what tax you would have paid on this before last years changes and how much you will have to pay now. If you have not used it, please do so now - find it here: PDPLA Letting Tax Calculator
Copied from the Daily Telegraph Steven Swinford, DEPUTY POLITICAL EDITOR 13 May 2016 â€¢ 10:00pm
"Buy-to-let landlords should to be made to "squeal" under George Osborne's crackdown to help people to buy homes, a Treasury minister has suggested.
The Residential Landlords Association said it was "shocked" by the response of the minister, during a private meeting earlier this month as it tried to raise concerns about a crackdown.
Since our article summarising the new student halls planned in the city back in February, one more site has been identified and design work is currently underway ahead of initial planning submissions.
We have spoken to our friends at University Student Housing about the high prices and long contracts advertised by the companies who operate these halls and have assurance that this practice is being discouraged.
And we have also raised the issue of 'Right To Rent" with Prof. Graham Galbraith, Vice Chancellor of the University of Portsmouth with a request for more support in this area, especially when offering accommodation to international students.
Universal Credit is very doctrinaire and full of well-meaning ideas. It is designed to reduce the cost of benefits, particularly housing costs. Enforced rises of housing standards could combine with it to cause major problems for landlords. The RLA"s view is that the system could run perfectly well, it is just that landlords will need to be much more involved with their clients and to work with them. Threat of destitution is the main driving force used on the tenant by the DWP and this will be re-enforced by homelessness when rent is absent, the landlord will take the blame for eviction even though he has satisfied his end of the bargain. The following is a list of the key points from the housing providers point of view. Culled in great part from Bill Irvine"s RLA course on 14 April 2016 by committee member and director, Julian Clokie.
The BPF has published a paper which endeavours to balance the pro's and con's of EU membership for the UK property industry.
They say, "As the voice of the real estate industry, we seek to put forward well-reasoned, thoughtful contributions to policy debates. The EU Referendum is no different in that regard. We are not able to say definitively whether remaining in the EU or leaving the EU would be the best choice in the long-term for UK Real Estate, simply because we do not know what circumstances would hold if the UK were to leave the EU. Individual member companies may be better placed to make a choice based on the impacts upon them as an organisation. An additional complexity is represented by the relative diversity of BPF"s membership - the choice for a UK-only developer may be somewhat different to that of an agent."
There has been some progress and many setbacks on the Housing and Planning Bill since we summarised it in January (read that article here).
According to the BPF, the Bill is coming to the end of report stage in the House of Lords, and the government has thus far suffered various defeats on Starter Homes, pay to stay, and other policies.
Private rental prices paid by tenants in Great Britain rose by 2.6% in the 12 months to February 2016, unchanged when compared with the year to January 2016.
Private rental prices grew by 2.8% in England, 0.2% in Wales and 0.7% in Scotland in the 12 months to February 2016.
Rental prices increased in all the English regions over the year to February 2016, with rental prices increasing the most in London (3.8%).
At our April members meeting, Alwin Oliver presented some 'easter eggs' for members that he had found on the web. These include model tenancy agreements, section 8 and section 21 paperwork, useful guides on condensation and the government How to Rent guide plus an international student guarantor service, letting agreements for pets and how to get a new car tax free!
Local solicitor and friend of the PDPLA, John Saulet, has updated us on recent regulatory changes which now allow tenants to request energy efficiency improvements to their properties. (The Department of Energy and Climate Change (DECC) published guidance for domestic landlords on tenants' rights under minimum energy efficiency standards (MEES) legislation, on 24 March 2016.)
At our March members meeting we debated accreditation of landlords and after 3 rounds of voting, we had a majority of those members attending in favour of a local scheme.
Speakers attended from Portsmouth City Council (representing the local authority run scheme), the National Landlords Association (representing national schemes based on CPD (Continuous Professional Development) and the Residential Landlords Association (representing the case for co-regulation - a mix between a voluntary self-management and a legally enforced environment).
Additionally our chair and vice chair both entered the fray arguing pro and anti positions from the landlords perspective.
Over the past few years the PDPLA has been vocal in its objections and resistance to the licensing of HMO"s (Houses In Multiple Occupation - More than 2 Unrelated Occupants in One Dwelling) in the south of Portsmouth (PO1/PO4/PO5). Our arguments have centred on the additional workload and costs for the landlords who participate and the lack of apparent action against those that don"t.
This month we heard quite a bit of positive news...
Portsmouth is changing - after 20 years in which the University campus has consolidated, from Foster Hall and QEQM Hall in Milton and 60"s architecture like Mercantile House to the new Eldon Building, the Dental Academy and the New Theatre Royal studios. The campus area south of the Guildhall is very much changed. The University has grown from a dated Polytechnic with a mishmash of acquired buildings spread across the city into a large and popular modern University with facilities to match.
We are now seeing a similar change in the way students are housed. For too long the 3,000 halls places available for the 4-5,000 new students each year has been a negative for the University even though local landlords have been happy to take up the strain at the expense of other types of tenant in Southsea.
At our February members meeting, Martin Silman re-iterated the advice given in the December newsletter that we:
- Accept that, although the council has already been recompensed by central government for the loss of council tax in student houses via the Formula Grant, we will increasingly be asked to pay council tax for short voids and periods when students cease to be students (for example after graduation)
- He recommended that we contract for 11 months (or 12) so that non-final year students can be shown to be in residence (and thus council tax exempt) for that period
- We also need to accept that in these times of constrained revenues, the council will no longer honour the '1 month exemption" previously allowed between tenancies and will now charge for the empty/void period regardless of whether the house is being refurbished or not
- We should also consider a move to joint tenancy agreements (as in that case PCC accept that any liability is the tenants not the landlords) or, if we continue to follow the Uni preference and offer individual contracts, we make clear in those contracts that any CT liability during the period of the contract is the tenants responsibility. This latter situation does not automatically solve your problem, but does give you legitimate grounds for debate
- We should also consider asking new student tenants to sign 3rd party consent forms allowing us to discuss their situation with the University and the Council should issues arise.
Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.