Tag Archives: legal
Landlord campaigners should know soon if tax challenge can go ahead
The legal campaign to overturn the proposed UK Government’s decision to phase out the tax relief that residential landlords can currently claim on their mortgages will know next month if its challenge can be taken further. There will be a hearing around the end of the month to determine whether or not there will be a judicial review of the move to reduce the tax relief from 2017 to 2020 until it meets the basic tax rate. Landlords and organisations have warned it could put off new landlords coming into the private rent sector and also hit existing landlords who will have little choice but to pass on the extra cost to their tenants in the form of higher rents. Landlord campaigners Steve Bolton and Chris Cooper said that they also have a meeting with the new housing minister Gavin Barwell on 09 September when the issue will be discussed. ‘We will obviously be raising our serious concerns about the impact, making him aware of our legal challenge and doing the best job we can to help him become a supporter of our cause within Government,’ they said. It is not the only tax change landlords have faced recently. Earlier this year a new 3% extra stamp duty was levied on the purchase of additional properties which included buy to let investments. The Scottish Association of Landlords (SAL) and the Residential Landlords Association (RLA) have both warned that these tax changes threaten to increase costs, making it easier for irresponsible landlords to provide sub-standard housing to tenants and threaten housing supply for those who believe renting is the most suitable option for them. The Scottish Association of Landlords (SAL), along with the Residential Landlords Association (RLA) south of the border, have launched a joint campaign to convince the new Chancellor of the Exchequer to reverse or amend tax changes in his Autumn Statement expected later this the year. They pointed out that a recent YouGov survey for the Council of Mortgage Lenders suggested that 34% of landlords will reduce their investment in the private rented sector as a consequence of these tax changes. Alongside this, the Scottish Government has introduced a 3% levy on the Land and Buildings Transaction Tax (LBTT) for those buying additional properties, including properties to rent out. ‘We know from our regular branch meetings around Scotland that landlords are already seeing increased costs as a result of tax changes. As well as impacting on individual landlords, we are concerned this could make it harder to tackle the current housing crisis by making it more difficult to attract much needed investment,’ said John Blackwood, SAL chief executive. ‘With the uncertain investment environment that has been created by the Brexit vote, at least in the short term, the last thing anyone in the housing sector needs is tax rises which will only make things worse,’ he explained. ‘Furthermore,… Continue reading
UK needs more home lending solutions for retirement, research suggests
More than one in three equity release customers in the UK are still paying off mortgages highlighting the growing need for retirement lending solutions, new research suggests. A study from national specialist Bower Retirement Services shows that 36% of over 55s seen by advisers are still paying home loans and advisers are seeing a surge of inquiries from customers with interest only loans. The firm’s quarterly Adviser Tracker Research report also shows that 68% of equity release specialists have seen a rise in customers with interest only loans looking for solutions. Advisers are also reporting an increase in customers who have considered downsizing as a solution but then decided not to go ahead. Some 23% of clients who looked at downsizing did not go ahead with key reasons including staying near family and friends and not being able to find a suitable home. Around 75% of those who did not go ahead said they wanted to stay near family while 54% could not find a suitable home. Bower believes the recent launch by Santander and Legal & General of a partnership to offer lifetime mortgages as an option to customers facing the possibility of repayment shortfalls demonstrates the growing need for new solutions. ‘The Legal & General and Santander deal is a significant move for the launch of retirement lending but much more needs to be done. Significant numbers of people aged over 55 are paying off mortgages but do not have the range of options they need,’ said Andrea Rozario, chief corporate officer at Bower Retirement Services. ‘Downsizing will be appropriate for many but it is also clear that many want to stay in their existing home for emotional and financial reasons and should be able to do so as long as it is in their best interests,’ she pointed out. She added that one potential problem for clients is their home not being worth what they thought and around 18% of advisers say clients who went ahead with equity release found their house was valued at lower than they had expected. Continue reading
Airbnb popularity is a growing threat to residential landlords
The Airbnb phenomenon that is soaring in popularity is a growing issue for private sector landlords as tenants embrace the trend without checking if their tenancy allows them to do so. According to the UK’s tenant eviction firm Landlord Action the number of cases where tenants have sub-let properties without their landlord’s permission has trebled. It point out that aside from breach of tenancy agreement and additional wear and tear to the property, landlords are left exposed to being in breach of their mortgage terms and buildings insurance. The share economy is a growing phenomenon, with models such as Airbnb giving people a platform to view themselves as a business. But according to Landlord Action founder Paul Shamplina it is also enabling those who do not have the right to do so, from profiting from someone else’s asset. An example is Joy Philips, a landlord who decided to let out her West London home so she could afford to take time out to volunteer at an orphanage in Africa. She thought she had found the perfect tenant in a young doctor who wanted her home for a three year lease. It all seemed very promising until she started receiving emails and calls from her neighbours complaining about the volume of people coming and going at her house. Joy was shocked to discover that her house was not being used as a home for the young doctor, but being rented out room by room as a boutique hotel on the Airbnb website. Making thousands over the rent being paid to Joy, her tenant was breaking the no sub-letting clause in her contract. By having so many people in the house, Joy’s home insurance was also at risk of being void. She was forced to give up her volunteer work in Africa to return to the UK and got in touch with Landlord Action in the hope of getting her property back. ‘We have had concerns for some time now regarding the protection of properties which are being uploaded and offered as holiday lets via Airbnb. We continue to receive a growing number of instructions from landlords who want us to start possession proceedings against tenants who have sublet their property via Airbnb without consent,’ said Shamplina. ‘Whilst Airbnb do provide a level of protection for hosts, naturally certain conditions and limitations do apply. My concern is that there is not enough safeguarding with regards to obtaining proof from the individual who is advertising the property that they are the legitimate owner. Or, if they are a tenant, that they have consent from their landlord to rent out the property in this way,’ he pointed out. ‘We have seen cases where, quite clearly, tenants are making thousands of pounds from exploiting the service to a high volume of holiday makers on a weekly basis. In a recent case, it… Continue reading
