The Nationwide says that house prices rise for 4th month in a row

Figures released by the Nationwide Building Society this week claim that house prices have now risen for the fourth month in a row. Does this signal the end of the property crash and that good times are just around the corner?

What the figures don't mention is that in the period from September 2007 to the start of 2009 house prices fell by over 25%. They also fail to acknowledge that getting a mortgage is still difficult and even more so when it comes to Buy-to-Let. From a height of over 3,000 different Buy-to-Let mortgages we are now left with under 200. Every major BTL lender has either stopped lending altogether or cut their lending back severely. The only ray of good news in the BTL mortgage market recently has been the decision by the Bank of China to enter the BTL market.

So why aren't the lenders lending? Why aren't banking groups like HBOS and Bradford & Bingley using the money that we, the taxpayers, have poured into them to help us, their customers? Why are there so few BTL mortgages and why are such large deposits demanded for the few mortgages that are available?

There is no doubt that a significant number of landlords would buy property if only they could get mortgages. There is also little doubt that many first time buyers would also like to get onto the housing ladder. The rise in 'reluctant landlords' proves that there are many thousands of home owners who would like to sell and buy. The problem is that the banks won't lend. The irony is that they won't lend the money we have lent them. The worry is that the Government still cannot or will not make them lend - even though the Government now owns so much of the banking sector.

Maybe we need to spend less time hoping for someone to wave a magic wand and more time waving the big stick at the banks that got us into the mess in the first place.

NetRent.co.uk launch a major website upgrade and a brand new Landlord Resource Centre

NetRent.co.uk are delighted to announce the launch of a major upgrade to our website and in particular the launch of The Landlord Resource Centre.

The Landlord Resource Centre is a major new source of information and help for landlords in the UK with a huge amount of information, advice and links to help you run your business safely and profitably. Best of all The Landlord Resource Centre is completely free.

Included within The Landlord Resource Centre are special sections on Working with Local Authorities and a Find a Letting Agent Service.

NetRent.co.uk will add to the already impressive amount of information available through The Landlord Resource Centre and we encourage landlords to contact us with suggestions about how we can make The Landlord Resource Centre even better.

We hope you like the changes we have made to our website and especially we hope that you will make full use of The Landlord Resource Centre. If you have any comments or suggestions please email us at enquiries@netrent.co.uk

Is the Government racing to register landlords to boost tax receipts?

John Denham, the Communities Secretary (pictured), wants to fast track the proposed database of private landlords by introducing legislation as early as this autumn. The stated aim is to crackdown on rogue landlords who fail to maintain their properties or fail to manage tenant deposits correctly.

However, according to an article in The Times the real reason could be to allow HMRC (the Taxman) to have access to the database. In particular HMRC are interested in people who rent out rooms in their own homes.

According to the Abbey homeowners taking in lodgers now earn £3.5 billion a year, with each household receiving an average of £6,412. HMRC admitted that it has few details about tax income from private landlords, as it is split between personal self-assessment forms and corporate returns. Nor does it have any idea how many evade payments.

Officials from the Department of Communities and Local Government said that the measures were not intended as a tax crackdown but to strengthen local authorities in tackling bad landlords with a record of exploiting vulnerable tenants. In our experience Local Authorities are so badly stretched that they struggle to deal with their current workload and we seriously doubt that many could cope with an increase if the Government were to introduce such a crackdown.

So we are left to wonder what is the real purpose of Mr Denham's race to bring in legislation that most of the industry is against. In our opinion it is simply a way of raising Tax. Whilst we have no problem with HMRC raising what is due it would be nice for the Government to be honest and tell us why this Minister is in such a desperate rush.

Read The Times article here.

New Rights for Tenants Facing Eviction

Housing Minister John Healey today set out plans to give new legal protection to tenants vulnerable to being thrown out on the street with little or no notice if their private landlord is repossessed.

John Healey said "It is wrong that through no fault of their own these families can find themselves out on the street with little prior warning. That's why I want to change the law to give new protection to those tenants who have no rights when the property they live in is repossessed.

"This will give them much needed breathing space to find another home. But I also want to see more lenders use alternatives to repossession, such as appointing Receivers of Rent to collect rent."

The Government expect that between 2000-3000 households could be affected this year.

Read the full statement here Communities Website

Government Ignores Landlord Petition

The Government has made it clear that it intends to ignore a Landlord petition to reinstate direct payments of Housing Benefit.

The petition on the Number 10 website called for the Government to revert to direct payments of Housing Benefits. Two things stand out, first a shockingly low total of just 1,318 landlords actually signed the Petition and second is the way that the Government have totally dismissed the reality faced by many landlords who accept Housing Benefit.

NetRent attend many landlord events and forums. We have heard time and again landlords complain that tenants are abusing the new system and not paying landlords. Many landlords have decided to stop offering their properties to people on Housing Benefit. And yet when given an opportunity to register their concerns only 1,318 bothered to take the time to add their names to the Petition. Is it any wonder that the Government take no notice of landlords?

We have to ask why landlords did not sign this Petition in significant numbers. We would also question what landlord associations at both national and local levels have actually done about this situation. If landlords and landlord associations cannot be bothered to campaign vigorously then Government will continue to ignore their legitimate concerns.

In their reply to the Petition the Government state that they are happy that the current system works "We are satisfied that these safeguards will ensure that vulnerable customers do not fall into unmanageable difficulties and that their rental payments will be met." We are sure that many landlords will disagree.

Click here to read the full response Reply to the Petition

Electrical Safety Council issues new Landlord Guide

The Electrical Safety Council (ESC) has published a new guide – the Landlords’ Guide to Electrical Safety – as part of its campaign to improve electrical safety in privately rented accommodation.

The guide aims to help landlords understand their responsibilities for electrical safety in rental properties and offers practical advice on the actions required to meet their legal obligations and help keep tenants safe and. It also includes information on electrical certification, when it is required and who can carry out electrical work.

Phil Buckle, director general of the Electrical Safety Council said “Landlords have a legal obligation to make sure that the electrical installation in their rented properties is safe. An inspection of the electrical installation by a registered electrician, known as a ‘Periodic Inspection’, checks for any lack of earthing or bonding and can identify potential dangers. Tenants should ask to see a copy of the Period Inspection Report before moving into a rented property to check that the electric installation has been confirmed as safe for use.”

As well as working with landlords, the ESC will also be targeting tenants in privately rented homes – particularly students and migrant communities. This aspect of the campaign aims to raise tenants’ awareness of their landlord’s legal obligations and to highlight what tenants can do themselves to improve electrical safety in their rented home.

To download a copy of the Guide click here Landlords' Guide to Electrical Safety

Rent in Advance

A number of landlords are charging money from tenants described as 'Rent in Advance' to avoid taking a deposit. The belief is that by doing this landlords and tenants avoid the tenancy deposit protection rules.

However, a court case Piggot v Slaven in Grimsby earlier this year ruled that 'Rent in Advance' was in fact just the same as a deposit. The Court ordered the landlord to pay 3 times the deposit to the tenant.

The warning to landlords is clear - don't try and get around the tenancy deposit rules by charging 'Rent in Advance', it could be very expensive.

The Taxman announces plans to target landlords

Consultation documents released by HMRC on 9th July confirm the Taxman's intention to target residential landlords in an attempt to triple the amount of extra tax raised from UK landlords.

The move could force letting agents and others to hand over names and addresses of landlords, past and present. Currently the Revenue can only demand data on landlords who use an agent to receive rent. According to the Revenue the new proposals would allow HMRC to make sure that people with income from letting property pay the right tax.

According to The Times newspaper "the Revenue sifts through classified advertisements and scours Land Registry data to find undeclared properties. It has also set up a whistleblower hotline and at one stage offered landlords an amnesty on penalties to encourage them to come forward. It has also targeted 80,000 landlords who wrongly claimed a refund for their mortgage payments".

The Times goes on to say "Tax evaders who have not come forward and are discovered could face penalties amounting to 100% of tax owed for up to six years, and could be prosecuted". Click here for The Times article.

The Revenue's Property Campaign has already netted more than £100 million. The Revenue believe that there is at least another £200 million to be had from landlords. However when we alerted landlords to the Property Campaign last year we were contacted by several landlords who told us that in their opinion the Revenue had bullied them into paying tax. The story seemed to be roughly the same in each case. The landlords were presented with a demand for a relatively small amount, in the region of £100. Because of the cost involved in fighting their case they had chosen to pay the Revenue's bill rather than fight.

One landlord told us it was a straight choice between spending over £1,000 to fight the demand or paying the £100 that his Accountant assured him was not due. He chose to pay the £100, but as you can imagine he was less than happy.

We are also aware that a large number of landlords do not complete their tax returns correctly, especially so-called 'reluctant landlords'. These are generally people who have been unable to sell their homes due to the current economic conditions and have chosen to rent their property for the time being. Our surveys indicate that many of these landlords not only fail to make correct tax returns, they are also less likely to have an EPC, to have gas safety certificates or indeed comply with other legislation.

It is correct that these landlords should be made to adhere to the same standards as 'professional' landlords. Our worry is that it always seems to be the 'professional' landlords who suffer. Just like the Government proposals to register all landlords (see previous posts in this Blog) it is likely that honest landlords will be targeted first and that many 'non-professional' landlords will slip through the net. Honest landlords end up paying more tax, directly or indirectly, they have to bear more costs to comply with legislation and therefore end up making a smaller return than these other landlords. Or, honest landlords are undercut by these other landlords who have smaller costs because they do not pay tax on their rental property or incur costs complying with legislation.

If the Revenue could guarantee that they will target and catch these 'other' landlords and at the same time force them to comply with the rest of the legislation that affects honest landlords we would support this initiative. Sad to say, we believe that this is unlikely to be the case. In our opinion is it is likely that it will be honest, professional landlords who will be targeted simply because it is too difficult to target landlords who are expert at 'staying below the radar'.

For more information about the HMRC proposals click here HMRC consultation document.

If you have any comments you would like to make you can make them on our forum The Landlords Club. You can also contact NetRent.co.uk by email at enquiries@netrent.co.uk or use this form Contact NetRent.co.uk.

We would welcome your comments.

Foxtons ruling means landlords can recover £millions

A landmark High Court ruling against London letting agents Foxtons could mean that landlords throughout the UK are able to recover £miilions in fees previously paid to agents.

Mr Justice Mann ruled that leasing agreements made by Foxtons unfairly overcharged commission to landlords. Foxtons was among many letting agents in London and the South East to run these agreements. As a result of the court ruling, landlords across the country can now issue proceedings to recover overpaid charges for the past 14 years on existing contracts.

For more information click here The Times article.

Warning over landlord licence scheme

Introducing a licence scheme for the private rented sector in England may not lead to significant improvements in conditions for tenants unless it gets good buy in from councils, landlords have warned.

British Property Federation director Ian Fletcher told the Chartered Institute of Housing annual conference that councils in Scotland and Northern Ireland, where such schemes already exist, “have made little use of them” to crack down on bad practice.

Under the proposals on which the government is currently consulting, all private landlords will have to apply for a licence which will be revoked if tenants are offered a poor service, for instance if maintenance or repairs are not undertaken.

Councils will police the system, which has been estimated to cost £2.5bn.

Mr Fletcher told the Local Government Chronicle: “The reason councils have not made the most of the schemes in Northern Ireland and Scotland is possibly down to resources but if it is going to work in England, councils need to be a bit proactive about it.

“The landlords we represent want a good system but they need to see that it is going to be useful and not something that they pay for and then bad landlords continue operating as they have done before.”