Here we are again with some more news stories for you from the week.
Armed services hit by tax problems
This news item comes from the RLA who tell me that the new tax rules, designed to discourage buy to let landlords, is having an unfortunate effect on the military.
Many military personnel own homes which are rented out while they are on duty elsewhere. However, the new tax rules are making things very difficult.
David Smith, Policy Director for the Residential Landlords Association, said:
“Today’s report is yet another indictment of the Government’s confused approach to the taxation of private rented housing which is leading to a loss of affordable homes.
“The country will rightly be angered that armed forces personnel wanting to rent property out whilst on active service are being hurt by this needless, ideologically driven assault on rental housing.
“Faced with a severe housing crisis we need a tax system that supports growth and encourages the provision of the new homes to rent we need to meet rising demand. It is time for the Treasury to think again.”
The Treasury defends the tax rules
In the meantime, a petition calling for the reintroduction of full mortgage interest relief for landlords and the abolition of the 3% Stamp Duty surcharge has attracted over 14,000 signatures and a government response. Although this is not what landlords would like, the statement saying:
Higher SDLT on additional dwellings and restricting finance cost relief seeks to support first-time buyers and level the playing field for homeowners. Neither measure is expected to impact rent levels
You can read the response in full and sign the petition here.
Broken Building Regulations
Timothy Waitt reports on the Anthony Gold site on the Hackitt Report.
Apparently, it’s not just cladding! Dame Judith says
“Cladding is just one issue – there are many other features and shortcuts that could result in disasters in the future…
You can see the Hackitt report here.
A new misselling scandal?
Property Industry Eye has reported that non regulated alternative deposit schemes could result in big problems down the line and indeed turn into the next big misselling scandal.
Jon Notley, one of the pioneers of alternative deposit schemes, whose own scheme, Zero Deposit is FCA-regulated, is calling for regulation. In his letter to MPs he says
“There are a small number of DRPs [businesses] that have launched fully regulated insurance or insurance-backed products.
“As regulated businesses, they are required to operate under clear rules set out by the FCA. These rules are designed to ensure that customers are treated fairly, that they understand what they are buying, and all with a particular focus on vulnerable customers.
“Regulated businesses also need to show that they are financially sound, and are controlled by FCA-authorised people who carry personal accountability.”
“I am concerned that there are a number of unregulated DRPs entering the market.
“These entrants will no have the protections in place that the regulated sector provides.
“In one example, launched by a letting agent in 2017, the tenant pays 4% of the monthly rent (plus VAT) every month.
“If the tenant stays in the property for just over two and a half years, they will have paid the equivalent of the full deposit and yet they will have to pay for any damage in full.
“There are other DRPs that – although seemingly offering a very similar product to regulated DRPs – have bypassed the FCA’s regulation.
“As such, they are not bound by the same rules, meaning that the risk of mis-selling increases.”
His recommendation is that only fully regulated schemes should be allowed to operate.
Landlords heading for the exit?
There are lots of stories in the press about how landlords are scrambling to sell their properties, put off by aggressive tax changes.
- ARLA Propertymark have published a guide to GDPR and consumer rights
- The Guardian wants to hear from landlords and tenants about right to rent.
- Giles Peaker has a useful update on new legislation on Nearly Legal here.
- A landlord has been fined a whopping £370,000 for converting eight small flats without planning consent.
- A new inventory clerks professional body is launching today