Currently viewing the tag: "MP’s"
Universal Credit Row Rages On

Universal Credit Payment Row Rages On

MP’s Fight Among Themselves As Universal Credit Row Gets Heated!

A parliamentary debate held earlier this month (September) saw MPs from both sides of the house getting a little hot under the collar, arguing about how payment of the new Universal Credit benefit, due to be introduced next year, should be made.

Universal credit is set to take over from Local Housing Allowance (LHA) and controversy surrounds the fact that ALL payments will be made directly to the claimant rather than to their landlord or the letting agent managing their rental property – just as LHA payments are paid now.

During the debate, Labour MP Alex Cunningham raised the concern that the new Universal Credit could result in large rent arrears being accrued and an increase in tenant evictions if payments are made directly to tenants, and claimants living in private rental properties should be given the option to have the payments made direct to their landlords.

Department for Work and Pensions (DWP) minister Iain Duncan-Smith however vehemently defended the decision for direct payment stating that “Benefit claimants shouldn’t be treated like children who can’t manage their own pocket-money. Claimants would benefit more by showing them trust, and that by doing so they would be more likely to cope better when they return to work.

The Residential Landlords Association (RLA), the National Landlords Association (NLA) and homeless charities Shelter and Crisis, have all lobbied the Government to give claimants the ability to choose how the benefit is paid, but they require the support of all UK landlords.

Property professionals, letting and managing agents, property investors and landlords need to get the weight of support behind the campaign and your help is required, please Sign the e-petition here.

UK landlords are warned to prepare for the worst case scenario and act quickly to evict tenants if rental arrears exceed 8 weeks, as it remains to be seen if the current rental arrears problems will worsen with the new Universal Credit benefit system.

If you have a problem with tenants in more than 8 weeks rent arrears please contact us and we can start eviction proceedings for you. Call Now on 0844 567 4001

The UK's leading tenant eviction specialists

The UK’s leading tenant eviction specialists

Local authorities have the power to charge council tax on all rental properties as soon as they become empty, a critical point that will hit landlords hard and give lettings and property managing agents a massive administrative headache.

It used to be that when a residential property became vacant, the owner was automatically granted a period of six months exemption before council tax was payable.

Some local authorities, such as Durham Council, have already implemented this action and have been collecting council tax on empty rental properties as well as privately owned empty residential properties for a number of months.

With the Class C exemption still under debate, have Durham council jumped the gun?

A spokesperson for Durham County Council reckons not: “We have been applying full council tax liability on all empty properties within the 7 boroughs of our region since April and landlords must understand that revenue is due from all residential properties regardless of whether or not they are lived in.”

Now MP’s want to abolish the mandatory 6 month class C exemption period, for all local authorities across the UK, using the Localism Act.

The Government reckon that there is no compelling reason why the first six months should be treated so generously, so their proposal is to abolish the Class C exemption for council tax purposes and replace the exemption with a clause that would let local authorities charge whatever they wanted on all empty properties for the first six months.

Class C dwellings are empty properties that are largely unfurnished. Other classes, which would appear to remain untouched by the latest moves, include homes left empty after someone has become ill or because the property is subject to probate.

The proposal will impact hardest on landlords with void periods, as well as property vendors who may need to relocate quickly for a variety of reasons such as for work or, in the case of older people, to be closer to family.

Meanwhile, the Local Government Finance Bill, currently going through Parliament, will allow local councils to charge higher amounts for residential property that has been empty for two years or more, as well doubling rates for second homes.

A spokesman for the Local Government Association said “The proposals could have unintended consequences, but it would be nothing like as complicated as the proposal to abolish Class C”.

In the official consultation earlier this year, 169 local authorities voted in favour of the Class C exemption being abolished with only 25 councils voting against the plan.

Only five property-related businesses responded during the official consultation, with 3 businesses voting against the proposal and 2 for it.

70 members of the public were also consulted, although the proportion of landlords remains unclear. Of these, 11 were in favour of the idea and 59 were against it. Only 1 MP responded, favouring the abolition of the exemption.

With so many local authorities under a great deal of financial pressure during the recession it is hoped that councils will choose not to grant council tax-free periods, because of the major financial implications it will have for landlords and struggling property vendors.

Additionally, there will be an increased administrative burden for letting and property management agents in that they will have to continually revise information of vacant rental properties to local authorities, most of which are often only empty for a few days.

It is also likely that it will cost local authorities more to collect the small amounts of council tax owed than the additional revenue they hope to achieve.

Durham council do appear to have acted independently of all other local authorities in the UK by implementing the abolition of the Class C exemption well before everyone else.

As a landlord with properties within the Durham council area I for one remain unhappy and will be talking to the RLA (Residential Landlords Association) about lobbying the Government to review this ridiculous way of thinking and because the abolition of the Class C exemption is not approved by Government at the present time I will be demanding repayment of unfairly levied Council Tax payments already made.

There Will Never Be A Better Time To Invest In Property

MyPropertyPowerTeam.co.uk helps property investors and landlords build their own property power team to enable them to profit from property - Visit our main site now!