Author Archives: admin

The Summer 2017 Election – Is there breathing space for Landlords?

 

Yes it does feel as though the landlord bashing by the government over the past 2 years has stopped for the Election with many Government Bills being scrapped for the time being but some things may have passed us by.

But first, what do the various parties have in mind for Private Housing in their manifestos?

We are all aware that the Conservative Party has very little new on the agenda but with the 3% Stamp Duty on BTL property sales, the Section 24 Tax measures (200% for some landlords) and the Tenant Fee ban for Agents.. Do we need any more?!

Labour in their manifesto feels like a blast from the past with support for tenant fees ban, rent controls and minimum tenancy terms. Whilst the Lib Dems proclaim support for the Corporate Build to Rent firms and wish to promote schemes along the lines of Trip Advisor for lettings!

We also have the situation where Gavin Barwell the Housing Minister is located in a marginal seat having only a 165 vote majority. Will there be Cabinet changes to be made after June 8th?

At fresh move we are aware that some legislation has somewhat slipped under the radar but may be very important for landlords such as:

The Housing and Planning Act 2016 which essentially means that Rent Repayment Orders can be imposed on landlords for certain offences since 6/4/17.

– A tenant or Local Authority (if they have been paying benefits) will be able to claim a Rent Repayment Order if the landlord is guilty of certain offences. (Note that they do not necessarily need to be convinced of the offence).

– Offences such as unlawful eviction, using violence to gain entry or possibly operating a HMO without a licence fall under this legislation.

– Failing to comply with an HHSRS Prohibition/improvement Order. Up to 12 months rent can be repaid. There can also be a FIXED PENALTY as an alternative to prosecution which cannot be more than £30,000!

One thing we can be sure of is that housing is such an emotive and political subject there will be more to come.

If you require further infromation on any of the above feel free to contact our head office address:

exeter@fresh-move.co.uk

Warmest regards

The fresh move team

Rules for ending a tenancy

As if getting rid of tenants who are reluctant to leave wasn’t already hard enough, the Government has made it even harder for landlords in England to bring tenancies to an end.

Changes in October 15 for Section 21 notices (S21s) means that a landlord who wants to get their property back will have to follow some changes in rules, otherwise their tenant will be allowed to legally remain in their property, even after the lease has expired.

If you’re not familiar with Section 21s, they’re the official forms used by landlords to give the tenant two months’ notice to leave. They’re often referred to as “no fault notices” or “notice to quit” as the tenant doesn’t have to have done anything wrong, it’s usually just that the landlord wants the property back, often to sell it or to move back in themselves.

Landlords don’t have to give a reason for serving notice on their tenant, as long as the fixed period of the tenancy has ended, so some landlords use S21s as an easier way to get rid of problem tenants than evicting them via the courts.

However, for all new tenancies starting from October 1 2015, landlords need to be aware of the following changes.

First of all, you can no longer just write tenants a letter telling them you want your property back. You’ve got to issue the S21 notice on a new form, known as Form 6A Notice Seeking Possession of a property let on an Assured Shorthold Tenancy.

You won’t be allowed to evict a tenant by issuing a Section 21 notice if the tenant has already made a written complaint about the property, if the tenant has reported an issue that hasn’t had an adequate response prior to being served with the S21. This is to prevent so-called “revenge evictions”, where the landlord decides that rather than sorting out a problem they’ll just get rid of the tenant instead.

Also, landlords now have to provide new tenants with a Government-issued How to Rent guide, which sets out all the tenant’s and landlord’s rights and obligations. And with all these changes, landlords will need to be able to prove, should it go to a dispute that these have been provided – so getting confirmation from your tenant has received them is also important.

Landlords won’t be able to issue tenants with a S21 unless they’ve provided tenants with the latest version of this guide, either by email or as a hard copy, along with valid Gas Safety Records and Energy Performance Certificates, both of which were previously required.

They also can’t evict tenants unless they have correctly protected any deposit, although this rule is not new.

Another change is that landlords will no longer be able to issue S21s during the first four months of the tenancy and the notices will automatically expire after six months. If the landlord hasn’t started possession proceedings in this time, the notice will have to be re-issued.

This change means that landlords can no longer use the safety net of issuing tenants with a Section 21 notice at the start of their tenancy, which is something we’ve previously recommended in this blog to ensure that they get repossession on the last day of the lease.

Instead, if landlords want to be certain their tenants will leave at the end of the contract, they’ll have to remember to issue the S21 at least two months but not more than six months prior to the last day of the lease, otherwise the tenant will be legally allowed to stay and the lease will become periodic.

You can see that this poses problems for landlords with tenants on a six-month contract because they can’t issue the S21 for the first four months but as they have to give tenants a full two months’ notice they will have to make sure they give notice on the first day of the fifth month!

The (slightly) good news is that these changes won’t apply to tenancies that existed prior to October 1 2015. They will, however, apply to ALL tenancies, regardless of when they started, from October 2018.

Goto the tenant section on this website to download the “How to rent guide” for tenants.

Regards

The fresh move team.

Non-UK Resident Landlords; Change to Capital Gains Tax

Further to a number of recent enquiries from overseas landlords (and owners of off shore companies) regarding the introduction of the New Capital Gains Tax for Non UK Resident Landlords, fresh move have researched this in depth and we have found the following salient points and a useful government link which we can pass on to you.

The new Capital Gains Tax came into force on the 6th April 2015. Any sales of UK residential property made before that date, whether of a main residence or an investment home, owned directly by non-resident individuals should not incur a tax charge. However, from 6th April 2015, a charge to CGT will arise on non-UK residents who dispose of UK residential property. The charge will only be applicable to gains accruing after 6th April 2015.

To summarise capital gains will apply: To non-UK resident individuals, trustees, certain closely-held fund structures and companies on the disposal of UK residential property, including rental properties, and Capital gains tax will be charged on the increase in value of the property from 6th April 2015 onwards. Capital Gains Tax rates of 18% and 28% apply dependent your circumstances.

The general advice seems to be that Non-UK residents should get their properties valued now, even if they have no intention of selling. Failing to get a valuation could possibly mean paying more tax when the property is eventually sold.

If you do sell in the future HMRC may query the amount of tax due on a sale and they will refer the matter to their District Valuer who will then determine the value as of the 6th of April this year. The landlord can of course employ a surveyor at that point to do the same and they will negotiate with the District Valuer. This would obviously cost more than getting your property valued now. We can arrange for a valuation on your behalf.

For further information please view the following link https://www.gov.uk/capital-gains-tax-for-non-residents-uk-residential-property

If you have any queries in relation to this please do not hesitate to contact me.

Regards

James Gardner