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Government Issue Response To Tax Relief Petition

Government Issue Response To Tax Relief Petition

Government Issue Muted Response To Tax Relief Petition

The Government has published a response to the online petition that opposes the proposals to change the amount of tax relief on buy to let mortgages announced by the Chancellor, George Osborne, in the post election summer budget.

From April 2017 onwards landlords will only be able to claim the basic rate tax relief rather than the higher rate tax relief on buy to let mortgage payments. It is widely feared that the move will severely affect the profitability of the private rented sector (PRS).

The online petition to reverse the planned tax restrictions on individual landlords has attracted more than 23,600 signatures since being posted.

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New Proposals Could Critically Damage The Private Rented Sector In Wales

New Proposals Could Critically Damage The Private Rented Sector In Wales

New Proposals Could Be Costly For
Landlords With Properties In Wales

There Residential Landlords Association (RLA) have released alarming news that will cause major concern for landlords who own rental properties in Wales

Cardiff city council released two new consultations before Easter 2014,

  • Considerable change in planning guidance
  • The extension of additional licensing to Plasnewydd

Rent controls appear to be quite a crucial political issue and with another general election looming the RLA feel that it is imperative that the facts are understood by landlords with rental properties in Wales.

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Former Deputy PM Wants Action Against Rogue Landlords

Former Deputy PM Wants Action Against Rogue Landlords

Former Deputy PM Reckons “Rachmanism” Is Back!

We need to take action against private landlords and protect society’s most vulnerable people” – John Prescott

Former deputy PM, John Prescott has used his weekly column in the Sunday Mirror to hit out at rogue landlords in the UK’s private rented sector (PRS).

Mr Prescott wrote: “We tackled Rachmanism through legislation, housing finance and building more local authority housing. But 50 years later Rachman lives on in a new generation of unscrupulous landlords. More than a million rented homes in the private sector are now substandard. But for years, the taxpayer has subsidised them through housing benefit. Research has revealed that at least 36% of London’s council houses sold off by the Thatcher government are now in the hands of private landlords. Rents are at their highest ever to maximise obscene profits.”

Peter Rachman was a Polish migrant, who earned the poor reputation of being the archetypal slum landlord, because he subdivided houses into flats and rooms, forced paying tenants out of their properties to replace them with migrants from the West Indies, as it was easier to charge the migrants higher rents because they weren’t covered by UK rent protection legislation.

Mr Prescott also commented on mega landlord, Fergus Wilson’s decision to evict tenants on benefits and rent to Eastern Europeans instead, writing: “We pay out £9.3 Billion (GBP) in housing benefit every year. It helped people like Wilson build their property empires. But cuts to these benefits and the introduction of the bedroom tax means they’re looking to maintain their margins. Now, only one in five landlords rents to people on benefits. Cutting benefits has led to landlords kicking out the poorest people in society. We must get tough and follow Newham Council’s lead by licensing all private landlords to stop them kicking out the vulnerable to feather their own nests.”

It appears that the former deputy PM must have had a small lapse in his memory because it was the Labour government that introduced Local Housing Allowance, (LHA) – which replaced housing benefit and slashed the amount of money that tenants in private rented sector properties could claim towards housing costs, paving the way for the current unpopular bedroom tax that is affecting tenants in the social housing sector. The Labour government also introduced the ATOS Work Capability Assessments that have been attributed to the welfare reforms that the UK is also currently seeing.

Owning rental properties and letting them to tenants is a business and rental prices are dictated by local area demand as well as the LHA rates in each region, so it is unfair of the former deputy PM to tar all landlords with the same brush. Yes there are some unscrupulous landlords out there, and there are unscrupulous bankers and businessmen too, but they are not being targeted by former politicians who use the media to their own ends.

Wind your neck in 2 Jags, and stick to commenting on matters that you know about, rather than wading into a debate on which you know very little!

More Red Tape For LandlordsRed Tape Increases For Private Sector Landlords
Despite Government Promises

Despite numerous promises to reduce the amount of red tape property professionals had to deal with, there are now even more legal requirements to let and manage rental properties.

The coalition Government started an initiative called the Red Tape Challenge, aiming to reduce the time and associated financial costs incurred by businesses and consumers in complying with unnecessary legislation.

However, recent Government announcements will increase the amount of red tape and infuriating processes that landlords and letting agents have to deal with

The Residential Landlords Association (RLA) say there are currently over 100 national regulations governing the letting of a rental property in the private rental sector.

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Thousands of landlords with rental properties in Wales will be forced to sign up for a new Buy-To-Let licensing scheme before they can rent out a home in the region.

The proposal is included in a housing white paper launched by the Labour-controlled Welsh Assembly Government and applies to every landlord letting a rental property within the Wales region, regardless of where they live in the world.

Buy-To-Let (BTL) and House In Multiple Occupation (HMO) landlords will have to show they are ‘fit and proper’ to hold a licence and must not rent out a property until they have successfully registered.

Once registered, the landlord must follow a code of practice aimed at improving tenant living standards.

Housing minister Huw Lewis said: “This is about much more than putting a roof over someone’s head. Housing issues affects people’s health and wellbeing and their ability to find and keep a job. For children, it is the foundation for the rest of their lives. Housing is fundamental to delivering many of our goals as a progressive government. This paper reflects our strong commitment to equality and social justice and our desire to do all we can to help people to meet their housing needs. We will be ambitious, innovative and collaborative to deliver real change to help reduce poverty, tackle the inequalities that exist between some of our communities, increase skills and jobs, tackle climate change and help improve health and well-being.”

The code of practice will also be applied to all property lettings and management agents across Wales.

The Government white paper states “Some people have to endure poor conditions, insecurity and, sometimes, threats of eviction. The latter, combined with the lack of other options, means that many people, often vulnerable people, put up with the questionable practices of some landlords and lettings and management agents. Accreditation will secure full registration status, which is effectively a licence to operate as a private landlord in Wales. Failure to do so could result in penalties or other sanctions, proportionate to the failings in compliance. Codes of practice will be developed for landlords and agents.”

Landlords advised to seek student tenants

Landlords advised to seek student tenants

The Association of Residential Letting Agents (ARLA) has issued advice on the UK student lettings market to first time landlords.

UK Landlords should look to the student lettings market in order to get their empty properties rented out, according to ARLA.

With over 600,000 students starting university courses in major UK cities this September, the student lettings market is a thriving business sector.

UK landlords who are used to renting to working tenants and securing the rent with Rent Guarantee insurance may be wary of entering the student rental market but ARLA insist that the student rental market is a thriving business concern.

ARLA has issued advice on the best steps to take when renting to students that is invaluable information, especially for new or first time landlords.

Guidance for landlords includes ensuring students understand their obligations as tenants, (even when they are likely to be away from the property during long university holidays), joint or several liability clauses, in case students leave the property unexpectedly and conducting a comprehensive inventory, as students don’t always have the best reputation for looking after properties.

Specialist UK Landlord and Letting Agent service providers, Legal 4 Landlords, also urge new or inexperienced landlords to seek advice from a reputable property managing agent, with a proven track record in successful HMO and student lets, before entering the student lettings market and advise landlords to enquire with the relevant local authorities about licensing and compliance with any local legal requirements.

The Property Ombudsman’s 2011 report, released last week, has shown a large increase in the number of complaints made against UK letting agents managing residential Buy To Let (BTL) properties in the Private Rented Sector, (PRS). .

The Association of Residential Letting Agents, (ARLA) have backed the UK Property Ombudsman, Christopher Hamer, in his call for proper regulation of the UK letting agency industry.

Mr Hamer’s report noted the need for a dedicated council that promotes the importance of using letting agents that are recognised members of either ARLA or the Property Ombudsman Scheme.

However, ARLA want legislation be put in place which demands the registration and licensing of all UK letting agents.

ARLA Operations Manager, Ian Potter, said “As an organisation that strives to achieve the best possible standards within the private rented sector, we are disappointed to see a rise in lettings complaints over the past year. That said, it comes as very little surprise given there is no national regulation in place to stop rogue agents setting up shop and taking advantage of what is a fragile market, 26% of complaints were against agents who did not belong to an Ombudsman scheme.”

Mr Potter then went on to recommend that tenants looking to enter into agreements with letting agents should, for their own protection, ensure they are members of the Property Ombudsman Scheme at the very least.

Controversy has been ignited after Labour’s mayoral hopeful Ken Livingstone declared all-out war on letting agents and rogue landlords in London, whilst calling for rent caps.

Critics said his plans to intervene in the market, and cut rents to no more than one-third of a tenant’s wage, would result in landlords having to lower rents, leaving their yields in tatters and acting as a deterrent to further buy-to-let investment.

If elected in May, Livingstone will establish a London-wide, not-for-profit lettings agency, paid for by the public purse, and to be run by the Mayor’s office. Although  handful of local authorities do run lettings agencies, none begins to be on the scale proposed by Livingstone. There is speculation that other large metropolitan authorities could decide on a similar path.

Castigating letting agents across London, he called for rent controls and widespread intervention in the sector, including licensing.

Speaking to the Institute for Policy Research, Livingstone said: “We must actually intervene into the private rented sector.”

Livingstone said: “No tenant in the private rented sector should have to pay more than one third of their wage in rent. What London needs is a London-wide non-profit lettings agency. So I can announce today that I will work with other stakeholders to establish one that can start to make a change in the private rented sector for the better. It will put good tenants in touch with good landlords across the spectrum of private renting so that both can benefit from security of tenure and reduce the costs of letting. The new agency would get to grips with the problem of rogue landlords and tackle a series of issues on accreditation, inspection and enforcement, licensing and energy efficiency, as well as tenants’ deposits protection. Through this work we will challenge the scandal of rip-off agency fees, horrific standards and the daily experience of disputes over deposits in the private rented sector. In the coming weeks I will set out more detail of how this new arm of the Mayor’s role will work.”

The response from the current mayor of London, Boris Johnson, reckons rent controls would be devastating and he would tackle things much differently.

Mr Johnson has said as London Mayor he would introduce a new London-wide accreditation scheme for all landlords.

A new London Rental Standard, which would accredit private landlords. He would also introduce a ‘rent map’ to give tenants more information on fair rents in their local area.

But he will not countenance rent controls, hitting back at election rival Ken Livingstone’s plans and saying they would be ‘devastating’ for the sector.

A spokesperson for the Mayor said: “The proposal of rent controls would be devastating for the sector. Rent controls were ended in the UK because they were counter-productive. Whatever the ideological appeal, the mayor does not have the power to introduce them, and even if he did, they would be devastating for the construction industry. It would result in fewer homes being built and lead landlords to invest less in stock. Other major international cities such as New York are removing rent controls for precisely these reasons.”

But, chairman of the Residential Landlords Association, (RLA), Alan Ward was severely critical of both Livingstone’s and Johnson’s proposals. He said: “Livingstone’s call for rent controls is an old idea that never worked in the past. Until 1988, rent controls resulted in a shortage of supply and poorer conditions for tenants. Hardly a remedy for 2012. There is no doubt that rents in the capital remain far higher than anywhere else in the country, but the answer lies in improved supply.”

Mr Ward said of Johnson’s ideas: “With over 10,000 landlords in London already members of the London boroughs’ accreditation scheme, it would seem a waste of time and money re-inventing the wheel in this way. The Mayor should focus on supporting and encouraging existing accreditation schemes, freeing his office up better to target the minority of landlords who bring the sector into disrepute. This should be matched by a programme of serious tenant education, providing tenants with all the information needed to better hold their landlords to account for the service they provide. It beggars belief that some people spend more time assessing the state of a car they wish to buy than the homes they seek to rent.”

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