Updates & News
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It is that time of year again to submit your tax return. It's a necessary evil for all self employed people (including buy to let Landlords). The deadline for 2018/2019 is 31 January 2020. If you don't use an accountant and are going it alone, click on the image below to see support & guidance from the Government website:
Don't delay …. get your tax return done by 31st January. We are always prepared for the last minute requests from our Landlords for a tax year statement, some go right down to the wire.
Until next time...
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Landlords of the properties with a low energy efficiency rating will be required to upgrade their properties ahead of new rules requiring energy efficiency upgrades. Since April 2018, new rules have been in place across England and Wales, setting out minimum energy efficiency standards (MEES).
These regulations made it illegal for landlords to issue a new lease for properties that have an energy performance certificate (EPC) rating below E, from 1 April 2018, unless the property is registered as an exemption.
While April 2018 saw the initial change in the rules regarding energy efficiency standards, the new regulations will affect ALL rental properties, irrespective of the length of tenancy. As of April 2020, it will be illegal to rent out any property that has an existing or continuing tenancy that fails to meet the minimum required energy rating.
The government may raise this target in the not too distant future and its expected that a rating of ‘D’ will be the minimum EPC rating. Its recommended that you make the improvements now to prevent having to do even more work in a couple of years. To help Landlords understand the rules changes, Fladgate, a city law firm, has shared some information below:
Do I benefit from an exemption?
If your property is caught by the EPC regime, you must comply with the MEES Regulations, unless you can rely on one of a few exemptions available to landlords, including but not limited to:
1. Exemption due to devaluation – a temporary exemption of 5 years will apply if a landlord can demonstrate that the installation of energy efficiency measures would reduce the market value of the property by more than 5%;
2. Exemption for new landlords – if a person becomes a landlord recently or suddenly in specified circumstances under the MEES Regulations, a temporary exemption of six months will apply; and/or
3. Third party consent – if a landlord cannot obtain necessary third party consents to improve the EPC rating of the property (including but not limited to lender consent, superior landlord consent and/or tenant consent), then a landlord may let a “sub-standard” property.
A landlord wishing to rely upon an exemption must register an exemption on the online Private Rented Sector Exemptions Register. Local authorities give and keep these fines and so are incentivised to enforce the legislation.
What if I don’t comply with the MEES Regulations?
If a landlord fails to comply with the MEES Regulations, there are financial penalties, which vary depending upon the length of the breach.
A landlord renting out a “non-compliant” property (less than three months in breach) may be fined up to either £5,000 or 10% of a rateable value up to a maximum of £50,000, whichever is greater.
A landlord renting out a “non-compliant” property (three months or more in breach) may be fined up to either £10,000 or 20% of the rateable value up to a maximum of £150,000, whichever is greater.
There is also a fine of up to £5,000 for providing false or misleading information, or failing to comply with a compliance notice. Click on the image below to see the full guidance published by the Government.
What should I do?
The tightening of the MEES Regulations imposes further onerous obligations on landlords operating within the private rented sector.
If you have a property with an EPC rating of F or G then unless one of the exemptions referred to above applies, you should begin preparing now for the extension of the regulations to existing tenancies to take effect on 1st April 2020.
As the deadline fast approaches, landlords would be well advised to consider the following, in order to protect their assets:
1. Review your property or property portfolios to identify whether or not properties are compliant;
2. Consider the cost and extent of any works required;
3. Consider access to the properties (lease terms permitting) to carry out works required to bring the properties up to the minimum ‘E’ rating; and
4. Consider whether any exemptions may be relied upon.
Failure to do so will impact upon landlords’ abilities to market and deal with their properties.
Until next time
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Happy new year! I can't quite believe its 2020
For those of you who are old enough to remember the Millennium bug hype of the late 90's; Weren't we all lead to believe that life would never be the same again? Our bank accounts would freeze, our cars wouldn't start and we were destined for a life of mayhem and digital disaster. I recall my car starting perfectly on the 1st January 2000 & I'm pretty sure that most folk who needed cash on 1st January 2000, got cash. I purchased my first house in 2000 (wait for it) for £19,000! Imagine buying a two house for that amount of money now? Those were the days.
So, we are leaving the EU on the 31st January...right? This news was music to my ears, after the last 12 months of the waiting to see what happens approach of sellers & buyers. We have never known a year quite like it since the credit crunch of 2008,
We are starting to see some of the pent-up demand from the wait and see buyers starting to show signs of turning a corner (particularly first time buyers), which we are hoping will lead to an active first part of the year.
There has been much talk of the "Boris Bounce" within the property industry (indicating that a healthier housing market in on the horizon) with the stalemate hopefully coming to an end, & those would be movers who have sat on their hands springing into some action.
Will the pound suddenly drop once we leave the EU? Will property prices suddenly come crashing down on the 31st January 2020? My honest answer and in my opinion (for what its worth) probably not.
Until next time......
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This article by Graham Norwood ( Editor of Estate Agent today) is an interesting read:
A new year dawns - but will 2020 bring new change for the agency industry now that the market appears to have been reinvigorated by the General Election?
The prospect of an end to uncertainty is already monopolising many of the forecasts for 2020, even from sophisticated analysts and commentators: I share everyone’s delight that there appears to be an end in sight to the Brexit melodrama and the inability of recent governments to act decisively, but I’m a little less optimistic that it will last all year long.
And in any case my five things to watch for in the year ahead go wider than just the housing market - but as it’s in the spotlight, let’s start with that…
1. The housing market’s year of two halves: There’s little doubt that 2020 will start with more optimism than any year since 2016, and with good reason.
Demand and transactions will almost certainly rise in the first few months of the year, spurred on further if there is any helpful stamp duty reform in the government’s first Budget earmarked for February.
But by June, guess what? The government will either have to ask the EU for an extension to the one year transition process, or it will choose not to…in which case there will be ‘No Deal’ if negotiators don’t agree with the EU before the end of 2020.
Either way, there will be more speculation and uncertainty about Brexit in the second half of the year, so it’s in everyone’s interest to make hay while the sun shines in the first half.
2. Countrywide’s senior management will change: There is widespread expectation that Countrywide’s latest fund-raising package - selling its commercial property arm and consolidation its share distribution - will get the thumbs up at a special general meeting of shareholders on December 27.
However, the company is running out of options to raise funds without selling off more valuable residential assets too. While there is no sign of that happening - yet - it seems likely that shareholder pressure, plus the fact that two of the most senior figures in the organisation are in the second half of their 60s, will combine to lead to a change at the top.
3. Rightmove carries on as before: The UK’s top portal is easy to admire but hard to love, yet can anyone see a disruptive force on the horizon?
Zoopla may edge a little closer thanks to huge investment from its US owners, but will re-main a clear second; OnTheMarket is now too big to fail but too small to make an impression after all these years.
Debate about orchestrated agency departures has been around for years without any real action: with the market more buoyant for the first half of 2020, there will be less vocal dis-sent about portal fees, meaning Rightmove is off the hook - again.
By late 2020, however, the market may be less active and once more there will be vocal dissent…but no action.
4. Housing minister promotion: It’s long been a clarion call in the industry that the housing minister should have a dedicated Cabinet position and more power.
Until now, housing has lost out to other priorities in the Ministry of Housing Communities and Local Government, with the minister’s role often being a stepping stone to greater things for the individual, and a sign of housing’s low priority within Labour and Conservative administrations.
My guess? This will change in 2020 with Boris Johnson’s much-anticipated widespread reform of Whitehall departments. Expect a separate Housing Ministry with a beefed-up big name politician running it, receiving explicit help from business people in the industry - chief executives from developers will lead the charge, but perhaps an agency name too.
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it really feels like Autumn has set in, I think the central heating may be getting cranked up soon and the early dark nights will soon be upon us before we know it. Its back to business for many people who have just returned from their summer breaks ( me included) and I've spent much of the last week reading through various articles surrounding the latest "deal or no deal" saga and I was particularly interested in what the effects would be to Landlords of a change of leadership at number 10. I can't take the credit for the article below, I've shared it from "Landlord Today". but it makes an interesting read:
Hundreds of buy-to-let landlords have expressed concerns for the future of the buy-to-let industry if Labour comes into power.
Boris Johnson is attempting to trigger an October general election, but the majority of landlords in the UK’s private rented sector are unlikely to vote for Jeremy Corbyn’s party if the poll does go ahead next month, according to new research.
A survey from Landlord Today found that 93% of landlords consider the existing Labour party unfit to govern, owed in part to its housing policy, especially when it comes to the private rental sector
Last week, the shadow chancellor John McDonnell said he wanted to see the introduction of a ‘right to buy’ scheme for private tenants as well as higher taxes on landlords. In response, 91% of landlords surveyed said that they think Labour’s private tenants ‘right to buy’ policy would ‘destroy’ the private rental sector.
Earlier this year, a Labour-commissioned report called on the party to intervene to cool the housing market if it wins power by introducing a new “progressive property tax” set nationally instead of by local councils and paid for by landlords instead.
As part of Labour’s proposed major property laws shake-up, empty homes, second homes and those owned by people not resident in the UK for tax purposes would have to pay the new tax at a “significantly” higher rate.
The report states: “We recommend that a Labour government replace the regressive and unpopular council tax with a progressive property tax based on contemporary property values.
“Unlike council tax, this tax would be payable by owners, not tenants. “This would result in significant administrative savings, lower levels of arrears and less court action. “Unlike council tax, the progressive property tax rate would be based on regularly updated property values, and the rates would be set nationally, rather than locally determined.”
Some MPs have branded the proposal “extraordinary and deeply damaging” and warned that Labour’s move amounted to a “tax bombshell”, and most landlords share their sentiments.
Some 218 landlords - 94% of respondents to a separate Landlord Today poll - said that they disagreed with the radical plans being considered by the Labour Party.
Until next time ...