Top Housing Lawyer calls for delay in implementing “Right to Rent” rules

Lawyer David Smith, policy director of the Residential Landlords Association and partner at law firm Anthony Gold has, this week, called for implementation of the Right To Rent Act to be postponed from its proposed date of 1^st February 2016. 

Mr Smith reported that the Right To Rent rules had only been trialled in the West Midlands with the limited data collected being contradictory at best.  He also stated that it was not achieving what the Government had set out to achieve and was possibly leading to discrimination.

Speaking for the RLA, Smith said: “To proceed at this stage runs the very real risk of causing considerable harm to the relationship between landlords and tenants which are so crucial to the smooth operation of the private rented sector.”

Watch this space for further updates.

Burghclere Down or Charlton. Which makes the best investment?

A landlord came to our office for advice as he was considering one of two three bedrooms properties, one on Burghclere Down and one in Charlton.

We did some research and found that the three bedroomed mid terraced house on Berry Way, Burghclere Down, for sale for £225,000, would probably achieve a rent of £875pcm. The properties in this area are quite popular with families and tend to have a great demand with investors and tenants alike, making it a relatively good investment.

A slightly larger three bedroomed semi detached property in Charlton has a value of £275,000.  The possible rent for this property is slightly higher at £995pcm, as it is slightly larger.  We found that although the rent can be higher, the annual yield was similar at 4.3%.

This shows that while a property can achieve a higher rents, it does not necessarily mean higher returns.

If you would like any advice when choosing properties, you may come and see us at our offices.

Deadlines revealed for energy efficiency compliance for rental properties

The Residential Landlords Association has reported that the Government has now revealed the dates for rental properties to comply with new energy efficiency rules.  They are:

April 2018: by this date it will be unlawful to let out a property with an F or G Energy Performance Certificate rating, as a new let.

April 2020: by this date the requirement for a minimum E rating will apply, not just to new lets but also to existing tenancies;

2025: the target is for a minimum D rating;

2030: the minimum target will be a C rating.

Richard Jones, company secretary of the RLA however has stated that there is some doubt over the accuracy of a large number of EPC’s  “The Building Research Establishment estimates that around 100,000 properties have an incorrect F and G rating so these ratings should be better than they are. This means some of those currently rated at the lowest banding Band G ought to be reclassified as Band F and quite a number of those that are in Band F do in fact meet the Band E requirement. We are making repeated representations to the government on this issue because we firmly believe that EPCs must be accurate before compulsion is brought in” he says.

We will update our blog with any further changes.  With most of these things we find there is always a few along the way!

Do semi-detached properties on Saxon Fields make good investments for Buy to Let?

I was talking to someone who lives in a detached house on Saxon Fields. He wants to purchase his first Buy to Let property and has noticed our rental index and previous articles, so was interested in getting to know the industry a little bit more.

As he has lived in Saxon Fields for over 8 years and he felt comfortable investing in there as he knew it well, we started to discuss the property market in this area. 

Firstly, we found that 113 semi-detached houses have sold in Saxon Fields since the year 1999. Property values in Andover have risen on average by around 22% over the last 10 years, but most semi-detached properties on Saxon Fields have beaten that rise all be it by only a small amount of 1.5% at 23.5%.

When we look back to 1999, a three bedroomed semi-detached property in Jutland Crescent, Saxon Fields was bought for £90,000 and sold in 2015 for an impressive £234,950.  With excellent capital growth you would expect yields to be comparatively lower, but most three bedroomed properties on the development can be picked up from around £230,000 and could have achievable rents of £900 to £950 per month. This means annual yields can be around an attractive 5% which coupled with the capital growth isn’t too bad!

If you would like to talk to us about your potential investment, please come into our office on Bridge Street.

Chancellor George Osborne facing legal challenge from Landlords

Industry magazine Property Industry Eye has this week reported that two Landlords are raising funds to challenge Clause 24 of the Finance Act 2015 announced in last Julys budget.  They are hoping to raise sufficient funds to seek a judicial review claiming that Clause 24 breaches human rights and / or EU law.

Clause 24 is the ruling which reduces the amount of mortgage interest Landlords can claim against tax basically meaning that Landlords will be taxed on turnover, not profit.  This potentially may push some Landlords into higher tax brackets and could lead to them paying tax, even if they are making losses.

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Lasting Power of Attorney - should you have one?

Legal firm Moore Blatch have recently reported that they believe Landlords who rely on property to fund their retirement should put a property Lasting Power of Attorney in place before they reach retirement age.  Currently there are only 1 million in place out of a possible 5 million.

By putting this document in place the Attorney can then make decision regarding rental properties if the Landlord becomes physically unwell or no longer has the mental capacity to make appropriate decision, even if an agent is employed.

Moore Blatch also advise that this document is drawn up by a Solicitor as it can be a complicated document and if not done correctly can lead to issues at the time it is needed.