Rogue landlords who break overcrowding rules

Rogue landlords who break overcrowding rules by packing their rental properties with migrant workers should be punished, the National Landlords’ Association has said.

InsideHousing.co.uk - 29 February 2008

The association said it backed local authorities that took legal action against the ‘minority’ of landlords that flouted fire safety laws.

Fire brigades have expressed concern that some homes are so overcrowded they would be impossible to escape from in the event of a fire - full article

Buy to let: the tax crackdown begins

The Revenue is after property investors who don’t declare income. We show how to save thousands legitimately.

THE taxman declared war on amateur landlords last week, sending out hundreds of letters to investors who it thinks are not declaring enough tax on their buy-to-lets. This is just the beginning of what is expected to be a wide-ranging crackdown, with thousands likely to be targeted over the next year.

David Budworth, The Sunday Times - 24th February 2008

Accountants are concerned that landlords who have quite innocently failed to pay the correct tax could be caught up in the campaign and be subjected to prosecutions and fines.

Chas Roy-Chowdhury at the Association of Chartered Certified Accountants said: “Tax rules for renting out property are confusing and it’s easy to make a mistake.”

The first Revenue letters are being targeted at landlords suspected of renting out property without declaring the income. Accountants say many people, especially those who are not charging much rent, may be unaware that the income should be declared even if no tax is due - full article

LandlordZONE Newsletter - February 2008 - Energy Performance Certificates

This month’s edition of the LandlordZONE Newsletter is devoted to Energy Performance Certificates (EPCs) which are being phased in this year.

Read the Full Newsletter

Read back issues of the Newsletter

It’s important that landlords are aware of this development as all residential and commercial buildings are affected from 1st of October at the latest, with some commercial buildings being affected earlier.

Remember, heavy fines are on the cards for non-compliance.

Energy Performance Assessors are likely to be in demand so prudent landlords may consider getting their properties up to standard and assessed early, especially if re-letting is likely.

The Landlord’s Energy Savings Allowance scheme (LESA) allows landlords to claim the cost of buying and installing energy saving measures against their tax bill, so take alook.

Content for this month’s newsletter has been supplied by Jane Needham B.Sc(Hons) MRICS, Chartered Surveyor, Accredited Domestic Energy Assessor.

Jane, who answers questions on the LandlordZONE Forum as a Topic Expert on Energy Assessment, Business Rates and Council Tax matters, has 18 years’ experience as a property professional.

It’s property show season again and we start off with one of the UK’s biggest events: 7-9 March 2008 at ExCeL London, The Homebuyer & Property Investor Show
Friday the 7th has been designated “Landlord’s Day” so there will be more exhibitors of interest to landlords that day.

LandlordZONE will be exhibiting and Editor Tom Entwistle is giving a presentation:

15:45—Tom Entwistle—LandlordZONE—Investing in Commercial Property: Successful Strategies for the Private Investor in 2008

Other seminars of interest:

10:45 - Paul Shamplina of Landlord Action—Dealing with Tenants From Hell

16:30 - David Lawrenson, consultant, author & regular contributor to the LandlordZONE Newsletter -  What type of property will show both capital and rental growth over the next 5 -10 years?

13:30 - John Socha - of the National Landlords’ Association—Lettings 2008 - Threats and Opportunities (also on Saturday & Sunday)

12:45 - Christopher Tanner - Blevins Franks Mortgage Brokers—The state of Buy-to-Let mortgage finance post-Credit Crunch

13:45 - Andrew Callen—lawyer, HMO’s and Positive Cashflow
Full Seminar Details —We look forward to seeing you at the event!

Tom Entwistle, Editor

EPCs for all sales and lettings of property are due to come into force on a phased scheme. By 1 October 2008 let residential property MUST have a valid EPC when it is let.

The EPC scheme will apply to commercial property from 6 April 2008 (1000 sq M+) 1 July 2008 (500 Sq M +) and 1 Oct 2008 (All)

An EPC can only be carried out by an Accredited Energy Assessor. For let residential property this must be an accredited Domestic Energy Assessor.

Registered EPCs are held on a central register and can only be accessed by the landlord or person who is responsible for commissioning the EPC, although it must be made available for viewing by prospective buyers or tenants.

An EPC is valid for ten years on let property. If changes are made to the property which may affect the energy efficiency of a property, then a new EPC should be commissioned before a new letting takes place.

The theory goes that from the EPC, a potential tenant can see just how much it is likely to cost to heat and run the house for a year. Publicity will be aimed at tenants encouraging them to assess properties through the EPC before taking up a tenancy. The impact of this for the landlord is that tenants will be more aware of these issues and will become more selective on energy efficiency.

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Apartment walls will come tumbling down

From Leeds to Leicester and Nottingham to Ipswich they have sprung up. Block upon block of new apartments in the centre of town. The acres of timber flooring could surface a medium-sized county. Countless Smeg fridges, Brabantia rubbish bins and Gaggia espresso machines have been harnessed to give the show flats just the right tone. But if Alastair Stewart, a housebuilding analyst with Dresdner Kleinwort, is even half-right, the roof is caving in on this dreamy world of loft-style living. There just aren’t enough affluent young urbanites to buy or rent all this new space without big price falls. Ipswich, bluntly, is not Manhattan.

Patrick Hosking, The Times - 21st February 2008

Moreover, the boom of the past few years has been fuelled not only by reckless bank lending but also by a “conspiracy of acquiescence” between developers and valuers at best and, in many cases, downright fraud. That is likely to make the ensuing bust all the more painful.

Mr Stewart has been bearish about the prospects for apartment valuations and for builders for some time, but now he is being heeded. His report yesterday thumped the shares of Persimmon, Taylor Wimpey, Bovis and others. Their values are less than a half of what they were a year ago and there could be further falls - full article

UK housing market close to collapse, analyst says

Britain’s housing market is a “house of cards” that is set to implode after years of reckless mortgage lending, chronic oversupply of new flats and widespread fraud, a leading analyst said yesterday.

Robin Pagnamenta, The Times - 21st February 2008

“We believe it is payback time for years of speculation and sharp practice,” Alastair Stewart, of Dresdner Kleinwort Wasserstein, said in a note to clients issued at the start of British housebuilders’ results season.

The warning came amid rising fears of endemic fraud in the housing market. The Financial Services Authority (FSA) said yesterday that it had banned a further two mortgage brokers for submitting false applications to lenders, in what appears to be a growing trend.

The action – against two partners in a mortgage broking firm in Ilford, Essex – came after a speech last week by Philip Robinson, director of the FSA’s financial crime unit, in which he urged the housing industry to tackle the problem. He said dozens of lenders had contacted the FSA with 200 allegations of mortgage fraud and more were coming in every week - full article

Buy to Let Landlords need advice

Advice from brokers will be vital to help landlords maximise their returns in the Buy-to-Let market, according to research from Alliance & Leicester Mortgages.

Housefund.co.uk - 19th February 2008

According to brokers, landlords will continue to turn to them first and foremost for qualified advice (59%), then for exclusive Buy-to-Let deals (20%) and great rates (11%). It is evident that brokers play an important role in helping the Buy-to-Let investor make the right purchase decision to maximise profitability. With the right advice, brokers predict that over a third (33%) of all investor landlords could make an operating profit in 2008 while 43 per cent of professional landlords could achieve a positive net yield.

Mark Blackwell, Director of Intermediary Sales at Alliance & Leicester, said: “Investing in Buy-to-Let properties should be seen as a long term investment. Despite this, brokers expect nearly 80% of landlords to make a positive return on their investment this year.”

According to the research, brokers cite the principal stumbling blocks for the buy to let market as being the fluctuating base rate (32%) and cooling house prices (27%). One in ten of brokers (10%) however, expressed a concern that rising house prices are reducing the rental return on properties, which could cause difficulties when landlords come to re-finance - full article

Landlords seen as “Extended Family”

One in ten (10%) renters aged between 25 and 34 count their landlord as a friend, while nearly one in five (18%) say they would happily send a gift or card to their landlord to express their gratitude if they had gone out of their way to help them.

Housefund.co.uk - 2nd February 2008

Research from Alliance & Leicester found more than one in five (21%) tenants aged 25 to 34 say they spend time chatting and catching up socially with their landlord when they phone up or drop in to visit.

With one in ten landlords (9%) checking in on their tenants at least once a fortnight, this regular contact seems to form the basis of some flourishing friendships. Contrary to stereotypical tales of frosty relations between landlords and tenants, only 3% of tenants overall don’t get along with their landlord.

Positive relations also bode well for landlords and could be seen as good business practice to be on good terms with tenants in a bid to ensure the property is treated with respect and care. One in seven (15%) landlords said they consider renters to be friends and nearly one in five (17%) say they would buy their renters a present or card if they moved away from the property on good terms - full article

Private rental sector can’t wait for government

Enhanced professional qualifications all the way up to Foundation Degree level has been put in place to help drive the rental market forward, delegates to the annual ARLA conference has heard.

Housefund.co.uk - 7th February 2008

The ARLA delegates heard new Group Chief Executive Peter Bolton King condemn recent government initiatives and explain how it would be necessary for ARLA to push ahead with licensing and the professional bodies to consider an industry-wide board. “We cannot wait for government,” he said.

“Most baffling of all, government has ignored all calls to include lettings agents in the Consumer, Estate Agents and Redress Act. Meanwhile, new Housing Minister Caroline Flint is considering ejecting from local authority housing those who will not work. Whatever the rights or wrongs of that, it will be the self-regulated Private Rented Sector that would be expected to pick up the pieces and house these people,” Peter Bolton King added.

Mr King explained that it is likely that an Industry Board covering the property spectrum would look to take over the ownership of the various codes of practice from the professional bodies. However, it will not in itself be a regulatory body - full article

Skyscraper flats left high and dry

A developer has “pulled the plug” on plans to create apartments in one of Bradford’s least-loved buildings amid fears over the stability of the city centre property market.

JM Construction had wanted to buy High Point, once the headquarters of the Yorkshire Building Society, to convert into flats in a multi-million pound facelift for the concrete-clad office block.

Will Kilner, Bradford Telegraph & Argus - 18 February 2008

But John Mulleady, managing director of JM Construction, today revealed his Morley company had pulled out of a deal with the building’s owner, Manoj Aggarwal, because the apartment market in Bradford had “died a death”.

Mr Mulleady’s viewpoint has been hotly disputed by other developers and agents, although one city living specialist admitted that some apartment prices had fallen by up to 20 per cent as first-time investors panicked in the face of the Northern Rock crisis and the global credit crunch - full article

It’s a great time to be a property developer

Most people in the UK have probably thought at some time or another that life would be better if they were a full-time property developer.

It’s an easy dream to feed. Rather than sit at work all day in a job you don’t like, slaving to fill someone else’s wallet, you can spend your time doing what you want to do, that will make you a profit down the line.

PropertyToday.co.uk - 18th February 2008

Many of the property shows on TV appear to show how easy it is to be a property developer. You watch someone with no developing experience buy an outdated house, make a series of apparently basic mistakes while doing it up and completely ignore the advice of the expert, and STILL make a serious profit when they sell it.

Faced with that kind of thing happening around you, it would be easy to believe you should jack everything in and go for it, follow that dream and become a property developer - full article