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Labour Manifesto Aims To Change PRS Forever

Labour Manifesto Aims To Change PRS Forever

Labour’s PRS Rent Control And Tenure Plans Under Attack

Labour’s manifesto confirms their plan to introduce 3 year tenancies and a ceiling on excessive rent rises in the UK’s private rental sector (PRS).

Previous Government’s have tried introducing rent controls and the result discouraged the building of new homes as well as reducing more financial investment in their rental property portfolios by landlords.

For years rent controls caused damage to the nation’s housing market, reducing the number of properties being built and recovery took almost a decade. The current rhetoric being touted around by politicians could have disastrous consequences for house builders and landlords alike.

The introduction of longer term tenancies is very much geared towards tenants but fails to address the problems already faced by landlords when tenants abscond without giving any notice, leaving the landlord out of pocket and looking for new tenants.

The UK’s private rental sector (PRS) has improved dramatically over recent year’s thanks in part to the introduction of tighter legislation, but there remains a delicate balance between regulation and altering the relationship between tenant and landlord. Intervention on rents and security of tenure has in the past damaged both market liquidity and good business values within the PRS.

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How Landlords Are Affected By 2015 Pre-Election Budget

How Landlords Are Affected By 2015 Pre-Election Budget

How Landlords Are Affected By 2015 Pre-Election Budget

During the pre-election budget last week, Chancellor of the Exchequer, George Osborne MP announced some significant changes that could have a detrimental impact on landlords the UK’s private rental sector (PRS) and residential property owners.

Below are the highlights of the pre-election budget that are of relevance to landlords and property owners:

  • £13 Billion (GBP) sale announced of the mortgages of UKAR – Northern Rock and Bradford and Bingley (Mortgage Express) to reduce national debt which followed the bailing out of the banks.
  • Introduction of 20 new housing zones.
  • The economy of the North grew faster than the South during 2014.
  • The UK has the highest rate of employment in its history!
    Employment is growing fastest in the North West, Yorkshire having the biggest employment.
  • Living standards are higher in 2015 than 2010.
  • Inflation forecast downgraded to 0.2%.
  • Low interest rates to be “locked in”.
  • Original target of debt reduction set in 2010 budget has been met.
  • 13 years of rising national debt has now been stopped.
  • UK achieved the largest and most sustained debt reduction of any major economy according to the IMF.
  • Government borrowing is falling.
  • The wealthy are making the biggest contributions to reduce debt.
  • End of austerity in 2019.
  • The annual tax return is to be abolished. New digital tax accounts to be created.
  • The personal tax free allowance has been raised to £10,600 (GBP) and will be raised to £11,000 (GBP) in 2017.
  • The higher rate tax threshold will rise to £43,300 (GBP) by 2018.
  • Class 2 national insurance contributions abolished for self-employed.
  • Stronger measures against tax avoidance and tax evasion.
  • Review of avoidance of inheritance tax through deeds of variation.
  • New penalties for tax evasion and those professionals who assist them.
  • Crime down 20%.

There was some good news contained in the 2015 pre-election budget too:

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PRS Landlords Victory On Selective Licensing By Local Authorities

PRS Landlords Victory On Selective Licensing By Local Authorities

PRS Landlords Victory On Selective Licensing By Local Authorities

Housing Minister, Brandon Lewis

Housing Minister, Brandon Lewis

Government Housing Minister, Brandon Lewis MP (pictured right), has announced that the selective licensing of private rental sector (PRS) landlords by Local Authorities will require Government approval from 1st April 2015, if they plan to license a large geographical area within borough or city boundaries.

Local authorities have had the power to licence landlords across an entire borough since 2010, in an attempt to combat community issues, such as anti social behaviour in troublesome areas. This blanket approach has seen a sharp increase in the number of selective licensing schemes being introduced by local authorities across the UK, much to the chagrin of landlords.

The changes to local authority selective licensing powers mean that councils will now need Government approval before they are allowed to implement a selective licensing scheme that covers a large geographical area of their council borough or covers an area that contains a proportion of private rented properties, expected to be around 20% of the local private rental market.

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UK Private Rental Sector Landlords Fear Upcoming General Election

UK Private Rental Sector Landlords Fear Upcoming General Election

UK Private Rental Sector Landlords Fear Upcoming General Election

With The UK’s next General Election less than 80 days away it is feared by some economists that many UK private rental sector (PRS) landlords will choose not to expand rental property portfolios this year.

Fluctuations in regional property prices and housing legislation changes have already hit the UK property market, and now the electioneering hype being spouted by MP’s from all political parties is doing very little to encourage landlords to increase their rental property portfolios.

Already there is a great deal of talk and speculation about the possible introduction of rent controls and the threat of increased taxes for landlords as the current Government and opposition MP’s attempt to leverage the strength of the UK’s buy to let property market.

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National Housing Federation Reveals Most Unaffordable UK Areas To Rent Property

National Housing Federation Reveals Most Unaffordable UK Areas To Rent Property

National Housing Federation Reveals
Most Unaffordable UK Areas To Rent Property

Towns and cities such as Oxford and Brighton have overtaken many London borough’s as the most unaffordable places in the UK to rent, according to the National Housing Federation.

London boroughs may have the monopoly on the most expensive rents in the UK’s private rental sector (PRS), but when factored against average local earnings, UK towns and cities such as Oxford, Brighton and Bath are calculated to be more unaffordable than many London boroughs.

The most expensive area outside of London is the Three Rivers area in Hertfordshire, where the average PRS rent swallows up over 50% of the average income of residents in the area.

Other places such as Oxford, South Bucks and Brighton are now more unaffordable than London boroughs such as Greenwich and Lewisham, with renters spending over half their salary on rent before they’ve covered any other bills.

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Recent Survey Discovers UK Landlords And Tenants are happy!

Recent Survey Discovers UK Landlords And Tenants are happy!

Four Out Of Five Tenants Happy
With Their Landlords

The majority of tenants living in private rental sector (PRS) rented properties have nothing but good things to say about their landlords, according to a survey conducted by Saga Home Insurance.

In a poll of UK tenants conducted by the insurance company, 77% of tenants who responded rated their landlord as either ‘good’ or ‘excellent’.

Fewer than 8% of tenants, (1 in 10) described the quality of service they received from their landlords as ‘poor’, which the insurance firm claimed to be contrary to popular stereotypes.

The survey surmised that UK landlords are largely a morally sound, ethical group of business people!

However, 56% of the tenants polled by Saga still identified room for improvement in their tenant-landlord relationships. With:

  • 23% of tenants complaining about hard-to-reach landlords
  • 21% of tenants had reservations about the quality of tradesmen used for repairs.

The insurance firm also spoke to landlords themselves about their relationships with tenants, and the biggest obstacles to a cordial co-existence with their tenants were:

  • Late rent payments cited by 37% of landlords,
  • Damage to rental property – 32%
  • Failure to provide notice when vacating rental property – 20%.

Finally, the insurance company also discovered that at least 10% of landlords, an alarming one in ten,  had not paid tenants’ deposits into one of the three the Deposit Protection Schemes currently in operation, which as well as being illegal, can result in problems when tenant eviction becomes necessary.

Saga’s head of home insurance, Sue Green, commented on the survey results, saying “In the age of housing shortages and escalating rents, landlords have been getting some bad headlines, but the research shows the extent to which this portrayal is unfair. The vast majority of landlords are conscientious and ethical, although tenants do believe more can be done which is why we have released a guide with practical tips to help them improve their ethical credentials.”

Tenancies Reform Bill Fails On Technicality

Tenancies Reform Bill Fails On Technicality

Tenancies Reform Bill Fails On Technicality

UK private rental sector (PRS) and social landlords were able to breathe a sigh of relief on Friday 28th November 2014, when the controversial Revenge Eviction Bill, or to use its correct title, the Tenancies Reform Bill, presented by Lib Dem MP Sarah Teather, failed to progress past its first reading in the House of Commons.

Rather than failing on a vote, the bill failed on a technicality after MP’s Philip Davies and Christopher Chope chose to talk it out, known as filibustering, because there were not enough MP’s present in the House of Commons to vote for the Bill. The debate started at approximately 9.30am and parliamentary procedure dictates that only Bills which remain unopposed after 2.30pm may make further progress.

MP’s who supported the Bill tried bringing forward a closure motion, to end the debate and call for an early vote, however for a successful majority, at least 100 MP’s must support it, but the motion was only supported by 60 MP’s and the debate on the Bill subsequently ended.

In order for the Tenancies Reform Bill to become law by the next election it must pass a second reading stage in the House of Commons, but it is not certain whether the Government will commit more parliamentary time to debate the Tenancies Reform Bill to try to force it through.

UK PRS and social tenants do need to be protected from the small minority of rogue landlords, and so do good, reliable, law abiding landlords.

It is far from fair that the majority of upstanding landlords should be expected to alter legal business practices because of criticism drawn by a few rogue operators within the UK’s private rented sector.

The Tenancies (Reform) Bill proposed restrictions on the serving of section 21 notices even where only a “hazard awareness notice” has been issued by a council. Landlords wouldl also be prevented from serving a section 21 notice where an improvement notice has been served on a rental property relating to category 1 or category 2 Hazards under the HHSRS rating system, or where the rental property requires emergency remedial action.

Tenants would also be able to challenge section 21 notices where they had complained to the landlord or council before the notice was issued, but the council was still deciding whether to even inspect the property in question.

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New Right To Rent Immigration Legislation Now In Force

New Right To Rent Immigration Legislation Now In Force

New Immigration Legislation Dictates That Landlords Can Only
Let To Tenants Who Have The Right To Rent

As of today, 1st December 2014, new legislation has come into force in Birmingham, Walsall, Sandwell, Dudley and Wolverhampton. The requirement will come in to force in those areas dictating that all UK private rented sector landlords must only let properties to immigrants that have the right to rent property in the UK and the landlords of the West Midlands are the legislative guinea pigs.

The introduction of the Right To Rent law has particular importance to UK PRS landlords who house foreign nationals or operate Houses of Multiple Occupation (HMO’s or multi-let properties) and those landlords using Rent 2 Rent (R2R) strategies.

Under the Immigration Bill (2014) private rented sector landlords are responsible for checking the immigration status of all potential tenants, with fines of up to £3000 (GBP) for landlords who fail to conduct this procedure. Employers will also face “more substantial” fines for employing illegal immigrants.

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Increase In Mortgage Lending Reported By CML

Increase In Mortgage Lending Reported By CML

Property Market Remains Healthy As Gross Mortgage Lending Rise Reported By UK Council Of Mortgage Lenders

There are plenty of media reports suggesting that the UK property market may have stalled and some economists have even gone so far as to predict another property price crash may be on the cards.

However new figures published by the CML show that these statements are far from true as there has been a considerable rise in the value of gross mortgage lending recorded in the UK over the last month.

Figures published by the Council of Mortgage Lenders (CML) highlight a significant rise in mortgage lending volume during October 2014, with gross mortgage borrowing increasing by 5% from September this year to £19 Billion (GBP) making the total gross lending value 8% higher than during October 2013.

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