As I write this first editorial in 2016 we look back on last year with some anguish, but we also look forward to a new year with some confidence. Confidence that we can overcome some of the negatives thrown at us by the Chancellor George Osborne, and that we can deal positively with the bureaucracy and red-tape we’re going to have to deal with.
My view is that if you develop the right strategies and get yourself organised, dealing with the challenges of buy-to-let investment should be relatively straightforward.
Speaking of bureaucracy and red tape, Monday next (1st February) we see the introduction of “Right-to-Rent” immigration checks in England. Judging by the trouble that the (far simpler) deposit protection rules brought, I foresee some problems within the landlord community with this. But done, right there is no reason why it should cause us problems.
Our leader article this month gives a good introduction and a straightforward guide to completing the checks, which in most cases will not be all that difficult. We’ve produced a “Right-to-Rent Declaration Form” which allows landlords or agents to gather evidence that they are processing these checks correctly; it’s a statement from the tenant that they are being honest about their claim and providing the correct documentation – see our Documents Section under the Moving-In heading for a free download: www.landlordzone.co.uk/documents
What is so sad to my mind is the that landlord bashing which reached a peak before last year’s election still persists in the national press; it’s so obviously written by people without the faintest idea of what it’s like to let property out to tenants, and who use spurious statistics that bear no resemblance to reality.
Take a recent article published by CityAM where the headline read: “Insecurity of tenure, inadequate legal protection and a lack of publicly available information: The UK’s dysfunctional rental market is due a shake-up.”
The article goes on to read:
Around 89 per cent of landlords in England were private individuals in 2010.
“Insecurity of tenure, inadequate legal protection and a severe lack of publicly available information on individual rental properties are just some of the woes reported by this country’s nine million renters.
“But for me, by far the worst characteristic is the breath-taking amateurishness which underpins every aspect of the rental experience.
“The Private Landlords Survey in 2010 found that 89 per cent of landlords in England were private individuals, 92 per cent of whom were part-time.
“There’s nothing fundamentally wrong with this, of course, but when you consider the private rental sector’s increasingly important role in our society, it seems anomalous that we leave the housing of so many people in this country up to a raggle-taggle cottage industry of (mostly) well-meaning individuals. Nevertheless, we are doing exactly that.”
Or what about the one published in the Independent newspaper this week headed: “One in four private tenants have been kicked out of their home by a landlord for no reason.”
This article continues:
“A quarter of tenants have been kicked out of their homes at the whim of their landlords and through no fault of their own, according to new research.”
“Private renters across Britain lack legal protections from so-called “no fault” eviction where a landlord decides to move them on without having to give a reason.”
Doesn’t it just make your blood boil? Where on earth do they get these stories come from, written by people who don’t have the first clue about what it’s like to let-out property to tenants?
In my 30 years or more of operating as a small-scale landlord, along with many thousands of other responsible semi-professional landlords, I’ve never removed a tenant from one of my properties for no reason. What’s more all my tenants, and over the years I’ve dealt with a lot of tenants, have been treated with respect and provided with safe and well maintained properties.
We all know there are “rotten apples” in the landlord barrel, but they are by far in the minority and there are laws in place to deal with them. What’s more these laws are being strengthened as I write this.
My contention here is that the above statistics on unlawful evictions are a wild exaggeration, designed to stereotype the landlord community. It takes six to nine months to remove a tenant from a property, so claiming that tenants are being “kicked out”, which is a criminal offence under the Protection from Eviction Act, is definitely a wild distortion of the truth. What’s more, and the writer seems to be ignorant of this fact, there is now a “retaliatory eviction” law in place.
Perhaps the biggest challenge now facing some landlords, and not all will be affected, is the withdrawal of mortgage interest rate relief introduced last July in the Summer Budget. It will be introduced gradually over four years but with a 20% allowance of interest charges against income. It will definitely have its desired effect, to cool down the buy-to-let market, which the Government and the Bank of England are concerned about.
Carl Bayley and Nick Braun of Taxcafe® have produced an excellent guide “Landlord Interest” reviewed in this issue which provides landlords with a good understanding of the new rules and some strategies for avoiding the worst of these measures.
We will be doing our best to provide landlords with the information and materials they need to make a success of their investments in 2016.
You might be interested in an analysis I did of the new “Smoke and CO alarm Regulations” for residential property I did for the UK and the differences in – England, Wales, Scotland and Northern Ireland – see here
Tom Entwistle, Editor.