National Landlords Association

Encouraging renting


2 Comments

Zac Attack!

The NLA fear London landlords will be in for a major shake-up whoever is elected.

ZGImage3

Zac Goldsmith is the Conservative Party candidate for the 2016 London Mayoral contest

In his newly launched Housing Manifesto, Conservative Mayoral candidate Zac Goldsmith outlines his plans to “move away from the amateur buy-to-let model” and “make way for a more professional approach”. You can read his Housing Manifesto here.

The future’s now.

Zac’s vision for the PRS of the future is made clear – large institutional landlords and the expansion of the build-to-rent sector. His plain for this “more professional approach” includes:

  • Guaranteeing that a significant proportion of homes built on public sector land are offered for rent and not for sale
  • Amending the London Plan so it is clear the build-to-rent proposals should be considered favourably in planning decisions
  • Creating a new viability assessment specifically for the build-to-rent sector
  • Working with local authorities and setting up a ‘Local Authority Housing Fund’ which will directly invest in large scale build-to-rent developments.

Overall, this isn’t too much of a surprise. Zac’s Tory colleagues in the Treasury and DCLG have made clear their preference for larger build-to-rent developments becoming the norm.

Just last week, Housing Minister Brandon Lewis gave evidence to the Lords Economic Affairs Select Committee and stated that his department wanted to create a more professional PRS – that is institutionally led.

And as we all know by now, George Osborne isn’t the biggest fan of buy-to-let landlords…to put it politely.

What is this, Amateur Hour?

With his plans for the future of London’s PRS established, Goldsmith also lays out what he wants to do to tackle the ever-increasing “amateur” buy-to-let landlord market.

First and foremost he will seek new powers to regulate lettings agents, making the London Rental Standard scheme mandatory: “lettings agents should only be able to rent out homes which meet the standard.”

This would mean the devolution of powers for central Government.  But just how far would the Government go given that in four years a Labour Mayor could be in charge? The aim of improving standards in the PRS is admirable, but as we have already shown, standards in the PRS have been improving for the last decade anyway.

By arbitrarily squeezing supply, at the same time Osborne is squeezing landlords’ ability to actually invest in their properties, you’re just asking for a crisis. It’s quite clear who the real amateur is in this scenario.

Length matters

On top of making it mandatory for all letting agents, Zac wants to “strengthen” the Standard to that all landlords must offer three to five year tenancies, with any yearly rent increases agreed upon and set out in the contract.

While not going as far as full on rent control – as landlords will be able to ask whatever rent they want initially – Zac certainly wants to regulate rents. He is doing this under the guise of providing certainty for tenants, which is a noble cause.

However, good landlords also need certainty  – the certainty that the rent they charge can actually cover their costs. Limiting landlords’ abilities to react to rising costs (such as another attack from Mr Osborne) will result in landlords leaving the sector because it is unaffordable, or ensuring their rents go up by a healthy percentage year-on-year to budget for the worst.

Either of these consequences will certainly be bad for tenants.

Letting agents under fire

Zac also turns his regulatory gaze onto letting agents – specifically, their fees.

High tenant fees charged by some letting agents are apparently “opaque and unpredictable”. So, he plans to ensure all fees which are charged upfront, and for specific services like credit checks, are “cost reflective”.

He doesn’t delve as far into the practicabilities of letting as Labour’s Sadiq Khan in relation to scrapping tenant fees altogether. But we’re sure the devil will be in the detail. Transparency in letting agent fees is good for the landlord just as much as the tenant, as long as costs for service aren’t just shifted to the landlord.

Appy-go-lucky?

In contrast to Sadiq’s plan to create a London-wide Letting Agency, Zac plans to go the opposite route – circumvent the need for letting agents altogether by backing apps that allow tenants and landlord to connect, provide background checks, references, rating schemes and payment facilities. He cites the apps Cozy.co and Zumper available in the US, and if they can provide the services “at a fraction of the cost of traditional lettings agencies” as he claims then that’s good for landlords (but potentially very bad for letting agents!).

The good, the bad, the ugly.

In good news, Zac doesn’t go as far Sadiq in calling for rent controls and he doesn’t even mention landlord licensing.

Not so good though is his clear preference for the build-to-rent sector and large institutional developers, coupled with a clear disregard for the smaller, “amateur” landlords.

We said the NLA feared that London landlords will be in for a shake-up whoever wins, and this manifesto makes it quite clear we’re in for an ugly shock no matter the result.

 

CAVEAT: Although the NLA is unashamedly pro-landlord, it remains politically neutral. You can view our previous appraisal of Sadiq Khan’s manifesto here.


Leave a comment

Have you got what it takes to be an NLA Telephone Adviser?

The NLA is on the hunt for additional Telephone Advisers to join our highly respected and renowned Advice Line, which is expanding due to a swelling membership base.

The Advice Line is a key benefit of NLA membership and provides essential support to landlords. The team receives over 1,000 calls per week relating to a host of private rented sector (PRS) matters including:

  • Responsibilities and statutory obligations
  • Tenancy agreements and best practice
  • Court action
  • Rental arrears and property possession
  • Deposit protection
  • Housing benefit
  • Landlord licensing

About the role

This challenging and highly rewarding role requires the ability to help solve problems/disputes between our members and their tenants and to get to the heart of the matter quickly. It will involve a minimum of 15 hours (part-time) per week working to a pre-planned roster.

About you

Successful candidates will need practical experiences as a landlord and a solid understanding of the private rented sector housing law. You will need to be aware and keep up-to-date with relevant landlord and tenant case law and have proven customer service skills in order to deal with highly pressured situations.

About the NLA

The NLA is committed to raising the standards in the PRS, countering the negative perceptions of the industry and reducing the calls for restrictive legislation which prevents growth, penalises the responsible majority, and adversely affects private renting for both landlords and tenants.

With a head office in the heart of central London and a committed network of regional representatives, the NLA is actively engaged in influencing policy and opinion, as well as building working relationships with the Government and Local Authorities on behalf of private landlords.

NLA members have access to and discounts for its numerous services, from a telephone advice line, landlord information library, as well as courses in professional development, legislation, and how to run an effective lettings business.

Interested?

If this sounds like a role suited to you then please get in touch for further information by emailing hr@landlords.org.uk with a short accompanying letter stating why you wish to be considered for this position, and your salary expectation.

 

 


Leave a comment

Don’t be an April fool!

April 1 Info

As we approach the end of March, the NLA’s Steve Kirkwood looks ahead to the changes facing landlords this Spring.  

The first week in April can be a confusing time for businesses – for two important reasons.

Tax Ahoy

Firstly, it marks the beginning of the new financial (1 April) and fiscal (6 April) years. Awareness of these dates is crucial as it is with reference to these that Governments tend to institute tax changes – and this year will be no exception.

We already know, courtesy of George Osborne’s infamous second Budget Statement of 2015, that 6 April will see the withdrawal of the 10 per cent wear and tear allowance, replacing it  with a relief for replacements of furnishings.

Further, the Chancellor laid out the final details of his SLDT changes in last week’s Budget. The three per cent SDLT levy for purchasers of ‘additional properties’ will be introduced on 1 April 2016, and you can read more about the policy details here. The Scottish Government is following step and has passed legislation to introduce a similar levy for additional properties on their Land & Building Transaction Tax, also commencing in April.

For those of you with employees it is also worth noting that 1 April sees the introduction of the ‘National Living Wage’, whereby over-25s must be paid at least £7.20 per hour.

It’s the Law!

However, it is not just for tax purposes that April is an important month. Governments also use April for the start of legislation which will have an impact on businesses, and significant changes to existing regulation or arrangements.

As such there are a couple of changes which landlords need to be aware of:

  • ‘Right-to-Request’. From 1 April tenants will have the right to request permission to improve the energy efficiency of their homes where government support is available to help pay for them. Landlords must not “unreasonably” refuse permission to a legitimate request, but the improvements must be funded at no upfront or net cost to the landlord. 
  • Specific to landlords, and in particular those housing tenants in receipt of LHA, the Government also uses 1 April to introduce the new year’s Local Housing Allowance (LHA) rate, details of which are available here.

Finally, and just to be awkward (and to ruin the April fools theme), from today (21st March) BTL mortgage providers lending to ‘accidental landlords’ have to be regulated. The implementation of the EU Mortgage Credit Directive creates a distinction between ‘consumer’ and ‘business’ BTL mortgages.

Applicants without a track-record of letting property, who apply for a loan against a former home, inherited property or otherwise ‘unplanned’ purchase will be restricted to ‘consumer BTL’ products which will be subject to greater restrictions and controls.

Although, as consumer products they will also provide access to consumer protections similar to those currently available to residential mortgagors – such as taking a complaint to the Financial Ombudsman. You can read all about it here.

There are quite a few more changes coming up this year, such as a complete reform of tenancies in Scotland and Wales, criminalisation of landlords who fail right-to-rent regulations, and a new, faster abandonment repossession procedure.

So, to be continued…


Leave a comment

Balls to the EU – will landlords kick us out of Europe?

Flag_of_Europe.svg

Liverpool fan (and NLA Public Affairs Officer) Matthew Oliver gives his take on the EU Referendum

It was a bad week in Europe for British clubs with Liverpool and Man City the sole British survivors.  As a Liverpool fan I don’t care about the others frankly, especially as the Premier League is still likely to keep hold of its four Champions League places, BUT I digress…

On Thursday 23 June there will be a Referendum on whether the UK should remain a member of the European Union or leave the European Union.

The NLA is a non-politically aligned membership organisation. We are therefore not taking a position on whether the United Kingdom should remain a member  or leave the European Union as it would be inappropriate to do so.

We have no idea how our members feel about this issue and to date have not polled them on the matter.  We are doing so in the next round of our quarterly surveys and you can participate here.  http://bit.ly/LLPQ12016

In the meantime we in the office have been debating how Brexit could affect the UK buy to let market and whether football could be an influencing factor in some people’s decision in how to vote.

Lets face it, the economic arguments for staying or leaving have been largely based on ‘Project Fear’. There may be some fluctuations in the share prices amongst major financial and building institutions, but then aren’t there now?  Are the storm clouds not circling now?  The Prime Minister has claimed mortgages would be more expensive but this has been criticised as fanciful.

So back to the national game and its possible impact on voting behaviour.  Of course the club football season will be long over.  However, the referendum falls right in the middle of the European Championships,  at the end of the group stages.  Apparently ‘Conservative High Command’ is banking on a wave of European togetherness and a good showing from the Home Nations.

Could the ‘Match of the Day millions’ swing it for Cameron, or will the only possible swinging be going on the MOTD studios if / when Gary Lineker presents the show in his pants?

Now I really digress…

Truthfully then it is hard to predict what BREXIT might mean for UK landlords.  Some might be looking in envy at our European counterparts who get more tax incentives from their respective governments to stay in the sector, hardly difficult to imagine given this Chancellor’s attitude towards the PRS.  Until we get the results of our polling (take part here http://bit.ly/LLPQ12016 ) then we don’t know for sure.

One last factor to consider is that there has been a large amount of speculation that a LEAVE vote would mean the Prime Minister would have to resign shortly thereafter, though he has repeatedly said he wouldn’t.  A leave vote would also mean every landlord’s favourite Chancellor’s chances of becoming Prime Minister would more than likely go up in smoke giving his support for the Remain campaign.

Perhaps that will be enough to make landlords says Balls to the EU?*

Legal Caveat.

*I stress again the NLA is a politically neutral Trade Association and has no position on either the EU referendum or the future leadership aspirations of the Chancellor, or anyone else.

Football Caveat.

*The NLA is equally committed to sporting neutrality – although the author may not be. 


6 Comments

Sugar’s taxed, but not so sweet for landlords

After last year’s Budget Statement we suggested that if the Chancellor wants to do away with private landlords, he should just come out and say it.

Screen Shot 2016-03-16 at 12.38.09

Well it looks like we got our wish.

Today the Chancellor made it abundantly clear we are not welcome, in fact he made a couple of telling statements which outline his opinion of landlords.

Firstly, he said that this government will “tax the things it wants to reduce, not the things it wants to encourage”.

On which basis landlords are obviously considered surplus to requirements.

Secondly, page 48 of the Red Book states – when referring to the fact that sales of residential property will be excluded from the reduction in CGT rates – that “This will ensure that CGT provides an incentive to invest in companies over property”.

A clear cut statement that the Government does not want investment in residential property.

Unfortunately the policy announced in Mr Osborne’s Budget make for even worse reading than the rhetoric.

The 3 per cent SDLT announced last year was confirmed, as was the decision not to provide any exemptions for larger or corporate landlords. Surprisingly this will hurt not just smaller landlords looking to invest for their retirement but large funds looking to enter the market. Details of which can be found here.

Agonisingly close to what we have been calling for, Capital Gain Tax (CGT) rates will be reduced to 10 per cent for basic rate tax payers and 20 per cent for higher earners. This represents a significant 8 per cent reduction. However, an 8 per cent levy is to be introduced on the sale of residential property meaning that landlords’ CGT bills will remain unaffected.

On a slightly more positive note the Chancellor did announce that the personal tax free allowance is to increase to £11,500 and the threshold for the higher rate of Income Tax will be set at £45,000 from April 2017. Additionally HMRC are to publish, and consult on, plans to ‘simplify’ landlords’ tax payments as part of the proposed quarterly ‘pay-as-you-go’ digitisation of returns.

Osborne also announced a tax allowance of £1,000 pa for ‘digital entrepreneurs’ making a small profit from trading related to property online. Apparently it is ok for amateurs with no-grounding in the law or best practice to let property through AirBNB (or similar) but not for established property professionals.

For those more interested in Corporations Tax than personal income, the news was good. Corporation Tax rates will drop to 17 per cent in 2020 – down an incredible 11 per cent in a decade.

Above all, and perhaps the most significant good news of the day, beer, cider and whisky taxes will remain frozen for another year. So at least we can drink to blot out the memory of another disastrous Budget for landlords.

Cheers George!

 

For more details click here to download the NLA Budget Briefing 2016

 


Leave a comment

The National Landlords Association is on the lookout for two new Board members – could you be the one we’re looking for?

Carolyn Uphill, Chairman of the National Landlords Association (NLA).

The NLA represents private landlords across the United Kingdom, providing advice, guidance, professional development, and working to affect positive change for both its members and everyone involved in the private rented sector (PRS).  We are the largest representative body for private landlords, and currently work with over 66,500 landlords, 31,000 of which are paying members.

About the Role

To improve its effectiveness, market penetration, membership and commercial income, as well as to provide for fresh ideas and successors to the current directors and Chairman in due course, the NLA is seeking to strengthen its Board by recruiting up to 2 new Non-Executive Directors (NEDs) able to contribute to its ambitious growth and development plans.

The role of the Board is to develop strategies that ensure that the NLA is effective, robust, and financially capable of supporting its members, plotting an often difficult course through campaigns, support, advice, and the provision of best practice in the PRS.

NEDs need to remain abreast of legislation and issues affecting the PRS, have rational, independent and timely decision making abilities and to commit between 18 to 24 days per year to NLA business.

Duties will include attendance at Board meetings in London (normally 5 per year) plus associated preparation and fiduciary duties, for which a flat fee of £5,000pa is payable. In addition, NEDs may be co-opted to serve on one or more sub-committees and some special projects or events for which an hourly rate is payable.

About You

Commercial experience at director-level is desirable and the Board is particularly keen to identify a suitable candidate with a strong understanding of IT issues in a services environment.

Candidates will be, or have recently been, active in the private rented sector, preferably as landlords, or in a related and relevant way and be able to demonstrate a strong understanding of and empathy with the private individual landlord.

They must have a working knowledge of relevant company law and corporate governance. Sound presentation skills and media interview experience would be an advantage.

About the NLA

The NLA is committed to raising the standards in the PRS, countering the negative perceptions of the industry and reducing the calls for restrictive legislation which prevents growth, penalises the responsible majority, and adversely affects private renting for both landlords and tenants.

With a head office in the heart of central London and a committed network of regional representatives, the NLA is actively engaged in influencing policy and opinion, as well as building working relationships with the Government and Local Authorities on behalf of private landlords.

NLA members have access to and discounts for its numerous services, from a telephone advice line, landlord information library, as well as courses in professional development, legislation, and how to run an effective lettings business.

How to apply

If you’re interested in applying we’d love to hear what you can bring to the role. Email hr@landlords.org.uk for an information pack. The Closing Date for applications is 11th April 2016.


1 Comment

Race for London 2016 – Sadiq Khan

800px-Sadiq_Khan

Shadow Minister for London, Sadiq Khan is Labour’s candidate for London Mayor

Sadiq Khan has fired the starting pistol in the race to become London’s next mayor by being the first to publish an election manifesto.

I’d recommend that any landlords living, or letting property in the Capital download a copy at: http://www.sadiq.london/homes_for_londoners_manifesto

Before I lose the interest of all those readers outside of the M25 (who will be understandably annoyed at all of the media coverage the Capital’s elections receive), it is worth bearing in mind that politicians take notice of London and it has a disproportionate influence on the policies which eventually govern all of our lives.

Kicking off the policy debate Mr Khan presented the Capital’s electorate with ’10 priorities for London’ three of which seem really pertinent for a blog aimed at private landlords.

Sadiq’s 10 Priorities

  1. Tackle the housing crisis, building thousands more homes for Londoners each year, setting an ambitious target of 50 per cent of new homes being genuinely affordable, and getting a better deal for renters.
  2.  Freeze London transport fares for four years and introduce a one-hour bus ‘Hopper’ ticket, paid for by making TfL more efficient and exploring new revenue-raising opportunities. Londoners won’t pay a penny more for their travel in 2020 than they do today.
  3.  Make London safer, with action to restore neighbourhood policing, tackle gangs and knife crime, a plan to tackle the spread of extremism, and a review of the resourcing of our fire service.
  4.  Be the most pro-business Mayor yet, working in partnership with industry to deliver on skills, infrastructure, and growth.
  5.  Restore London’s air quality to legal and safe levels, with action to make travel greener and pedestrianise Oxford Street, while protecting the green belt.
  6.  Set up ‘Skills for Londoners’ to ensure all Londoners have the opportunity to train in the skills that our economy needs.
  7.  Tackle low pay, working with employers to make London a Living Wage City.
  8.  Challenge gender inequality, working to close the gender pay gap and support women to break the glass ceiling while helping to remove the barriers to women’s success.
  9.  Make cycling and walking safer, with more segregated cycle routes, action on dangerous junctions, and safer lorries.
  10.  Make London a fairer and more tolerant city, open and accessible to all, and one in which all can live and prosper free from prejudice.

Why these three?

Well No.1 is pretty self-explanatory, he wants a ‘better deal for renters’. It could mean almost anything, but it’s about the PRS.

No.4 outlines plans to be pro-business. Property is BIG business in London – so a big tick on that count. Although it remains to be seen whether landlords constitute the type of business this candidate wants to encourage in London.

And No.7? I’ve highlighted this one because affordability is an issue in the City and should be looked at from the point of view of income versus outgoings. If incomes go up, affordability becomes less of an issue and the pressure reduces. Easier said than done though. 

So far so good….. Maybe?

Headline pledges tend to err towards generic, and have to appeal to the largest possible section of society. However, when the candidates start to focus on the important issues of the day, the rhetoric can become more divisive.

So how does the Labour candidate plan to work with the PRS?

All of the candidates for Mayor are likely to have two kinds of manifesto commitments. (1) Those things that they would like to have control of, but don’t. (2) Those things they can do.

Firmly in the first category, as Mayor, Sadiq Khan would:

“Fight for the Mayor and London councils to have a greater say in strengthening renters’ rights over tenancy lengths, rent rises, and the quality of accommodation”

Enough said: security of tenure and rent control. Not exactly original, but not very surprising either. In fact the previous Labour candidate (Ken Livingstone) included the  commitment to campaign for…..

“legislation for a fairer system of controlling rent increases based on successful schemes in other countries”

…….in his 2012 manifesto. So little change there.

All of which would require primary legislation and a great deal of agreement from Westminster, for which I suspect Mr Khan would have to wait for a Corbyn government. So lets worry about that later.

Moving on to the issues under the control of the Mayor…

So far as the sector is concerned Mr Khan goes on to highlight three policies of direct importance:

  • Setting up a London-wide not-for-profit lettings agency for good landlords, building on the work that councils have started, and ending rip-off fees for renters.

Nothing especially exciting, but equally nothing devastating. ‘Rip-off’ fees are an easy target for politicians of all all sides, although rarely defined or understood. They have also been the subject of a fair amount of regulation of late, much of which is yet to be truly tested.

  • Naming and shaming rogue landlords and ensure tenants have access to this information online.

Again, assuming we are talking about criminals, convicted of serious housing or related offences, this is already public information. Likewise driving wilful criminals out of business should be good for us all – although I suspect the devil will be in the detail.

  • Working alongside boroughs to promote landlord licensing schemes to drive up standards, and make the case to government for London-wide landlord licensing.

Here’s the one which I find a little odd. Driving up standards is of course good and to be supported, but time and time again we see licensing being justified on the basis of standards without any real evidence of success.

Don’t get me wrong, licensing can be very effective, but usually only when used sensibly and targeted at problem areas. Surely even the most cynical of Londoner would find it difficult to argue that all of London’s 32 boroughs (and the City for good measure) are in dire need of licensing.

If this is the case, why aren’t they already licensed?

This makes me a little concerned about Mr Khan’s attitude towards the London Boroughs. After-all they already have the legal powers to introduce licensing if they feel (and can justify) the need. At present fourteen boroughs have opted for additional, or selective licensing, or a combination of both and most only license a small proportion of their local area.

Were city-wide licensing thrust on the entire Greater London area I have sincere doubts about the ability of town halls to cope with its administration.

On a positive note Sadiq Khan and his team have grasped the importance of increasing supply, and have some interesting things to say about tenure blind developments and housing for older people. The latter of which is far too often overlooked and is a growing issue.

Above all it is great to see housing taking such a prominent place in a major manifesto – but to what extent he has the right approach, that’s reader’s choice.

CAVEAT: Although the NLA is unashamedly pro-landlord, it remains politically neutral. As such we have not singled out Sadiq Khan, he simply published his manifesto first. An appraisal of Zac Goldsmith’s policies will follow – just as soon as we know what they are.
Follow

Get every new post delivered to your Inbox.

Join 20,368 other followers