Not a big week for news, but here are a few things I picked up on.
The Tenant Fee ban is inevitable
This is the message from David Cox at a webinar he gave recently (reported here) – which is also what he told Landlord Law members recently when he gave our September training webinar (which logged in Landlord Law members will find here).
David told agents at the Goodlord webinar
There’s no dissent at all. I cannot overturn the will of 650 MPs with no support in Parliament.
So, agents – you must start preparing for this now. If you charge fees to tenants, these are going to have to go and you will have to either raise your prices or replace the income elsewhere or change the service you provide.
The Tenant Fee bill is less of a problem for Landlord Law members though, most of whom are landlords who self-manage their properties with the help of the Landlord Law service.
Reconsidering Right to Rent
The government is reconvening its Private Rented Sector (PRS) stakeholder panel on Right to Rent and will be re-considering the controversial scheme.
For example, the RLA research division PEARL found last year that 42% of landlords are now less likely to rent to someone without a British passport due to fears of being hit by expensive penalties.
The RLA is also supporting the Joint Council for the Welfare of Immigrants who won the right to launch a High Court case challenging the right to rent scheme and this will be heard before the High Court on 18th and 19th December.
David Smith, RLA policy director said:
It appears the government is reforming the PRS stakeholder panel – which has been defunct for some time now.
While we welcome the news the Home Office is keen to re-engage with the sector, we want to see them take bold action.
Would-be tenants who are legally entitled to live in the UK, but struggle to prove it, are being denied homes and we believe the time has come to suspend this unfair scheme.
Let us hope so.
Shorthold long leases
An interesting article from Giles Peaker of Nearly Legal on long leases where he points out that they are probably also assured shortholds if
a) the ground rent is over £250 per year (or £1000 per year in London); and
b) the property is the only or principal residence of the leaseholder
as there is no maximum term for an AST.
This could affect possession proceedings as forfeiture (where the tenant has the right to relief) would not apply, instead, the landlord should use ground 8. Which is a mandatory ground.
There are other important implications – but go and read the post – and the erratum here.
Lib Deb proposals for the PRS
A report indicates that the Lib Dems are calling for
- Six month notice periods under ASTs
- First refusal for tenants when a landlord sells; and
- Rent rises to be linked to inflation and/or tenants’ wages
No doubt we will hear other plans from the other conferences.
Section 24 taxes
A post on Property Tribes reports that
Landlords face an eye-watering effective tax rate of 66 per cent on rental profits when mortgage interest relief changes come into full effect, figures calculated for This is Money and MailOnline Property reveal.
The post indicates that many landlords are contemplating selling up as a result. But, even with the tax increase, will they be able to get a better return on their money elsewhere?
Snippets
- An interesting case in the Valuation Tribunal on non-domestic rates for properties with property guardians.
- TPO has expelled four members
- The Law Commission has launched a consultation on leasehold home ownership
- Solicitors reveal the real reasons for conveyancing delays
Newsround will be back next week.
“Solicitors reveal the real reasons for conveyancing delays
Online agents are lambasted by solicitors for causing hold-ups in transactions”
Oh the irony!
I don’t doubt they have a point but it is a bit rich coming from an industry where many still refuse to use email or phones.
I think most solicitors have got around to using the phone.
There is a lovely bit in one of Dorothy Sayers Lord Peter Wimsey books written in about 1925 where the lawyer there (who I think is called Murbles) says how he prefers to send someone with a note rather than use this ‘newfangled’ telephone.
I’m sure you are right Tessa.
Just having a frustrating sale going through at the moment. All straightforward but the other side are using a bucket shop conveyancer where the real solicitor pops in from the golf course once a week to sign any paperwork.
Trying to get a chain sale through must be like trying to align the planets.
The effective tax rate under the new rules could be 66%, under 20% or well over 100%. Someone with low leverage and low total income {like myself currently) might continue to only pay 10% (some at 0% due to the personal allowance, some at 20%). Some one who is very highly leveraged could be paying more in tax than their net profit, i.e. over 100%.
Last year was my best with an average net yield of 8% and equity growth of over 10%, but my worst property yielded less than 2% with no capital growth. As it is my former home so I won’t have to pay CGT I can certainly do better else where and plan to sell it next year.
Solicitors may know how to use the phone, but they still seem to like to use the post when email would work much faster, Though mine does seem to have realized that email works better when a deadline is approaching.