Commentary RF

Demand for ‘lock up and leave’ homes boosting London’s Built to…

Lock up and Leave homes or also known as Built To Rent is becoming more and more popular in places like London. One of the reasons for this is because the airports are offering more and more destinations to come and go to. To direct consequence of this is that more people are travelling for work and leisure. More and more people are wanting to save money and Air BnB type rentable homes are more desirable than hotels.

Key Takeaways:

More homes in London are built to be rented out rather than bought. A big change in London.
Many more international people are coming to London and many of them are renting homes.
Built to Rent is something fairly new, but important in the UK

“Many also include tenancies of up to three years in length, low deposits (just one month’s rent). pet-friendly homes, and dry cleaning services.”

Government issues new HMO and licensing guidelines

The MHCLG released new guidelines regarding the new laws passed regarding HMOs and selective licensing. These guidelines, meant for landlords, gives information regarding the extension of licensing for HMOs that are smaller. These laws establish minimum dimensions for bedrooms in an effort to protect the habitability of tenants’ living spaces. According to government calculations, this will increase the number of properties that will be subject to government regulations and will thereby aid authorities in taking on landlords who are responsible for subpar living conditions.

Key Takeaways:

In 2018, the Ministry of Housing and Local Government issued some regulatory changes for landlords.
These stipulated that landlords leasing units to five or more individuals from two or more separate households must be licensed by their local housing authority.
The strictures were put in place to crack down on those few landlords that see fit to abuse the system, by leasing unsafe or overcrowded units.

“Last month’s legislative changes are designed to protect tenants’ living conditions by specifying minimum room sizes for HMOs.”

Can I evict using a section 21 notice if I have used a license agreement for my rented HMO property?

Under an agreement someone can provide a room to a person as a licensor, but there is some confusion on whether the licensee can be evicted using the Section 21 Notice. The issue pertains to the license agreement. The answer is that in the case of the Section 21 Notice, the law pertains to short hold tenants, and not licenses. However, in this case the agreement between licensor and licensee is most likely a tenant and landlord situation in which case the law does apply. There are several legal stipulations required to use Section 21 to prove tenancy, and among them are a secured deposit, if the room is licensed, the month of occupation, and gas safety.

Key Takeaways:

Under English law, a section 21 notice can be used to evict a tenant, but not under every circumstance.
For example, if a deposit was exchanged it must be returned with proof that the landlord can show.
One regulation requires that a gas safety certificate be issued to the tenant prior to occupancy. This lack could nullify the use of a section 21.

“In fact, landlords (and agents) need to be VERY careful about giving ‘sham licenses’ as you can be prosecuted for this.”

Where to move for… affordable rents

Residents of London spend high portions of their earnings on rents in London, and London’s rent prices are the highest worldwide. Residences outside of London have lower rents, but for those who need to stay within London’s city limits some eastern boroughs such as Dagenham have the best rents. Residents of Wales and England have been paying lower rents compared to 2007, and the regions with the lowest rents include Swansea, South Shields, and Barnsley. The north-east has the most preferable rent prices in relation to residents’ wages, with Na h-Eileanan being a particularly great place in which to rent.

Key Takeaways:

Residents of London spend high percentages of their paychecks on rent.
Rental prices in London are not going up as quickly, although they remain high.
The north-east tends to have the most favorable rent prices relative to residents’ paychecks.

“Money Supermarket proposed Bexley and Barking & Dagenham as the cheapest boroughs, with Havering just a notch up.”

Tax bombshell may curb Airbnb-style short lets

Tax systems can be a friend or foe to entrepreneurs. So it’s wise to always keep one highly aware and leery eye gazing in the direction of the tax man when you own a business. For example, a recent change in regulations for those utilizing the rent a room system could have repercussions for those utilizing platforms like Airbnb. In 1992 the British government wanted a way to stretch housing potential to cover a dearth of vacancies. To that end, they landed on the idea of incentivizing individual homeowners to rent out space in their homes. Owners could earn almost 8000 pounds annually, tax-free. Unfortunately, the sweet deal is now set for a slight pickling process, but only for those expanding the original premise to rent out an entire property. Treasury officials have decided that those that use the original tax-free offering to make a side income from renting out a spare bedroom are not subject to more taxation. However, those that commit to renting out larger sections for longer periods of time are in effect moving towards a path normally reserved for commercial landlords and will be subject accordingly.

Key Takeaways:

Modifications to the Rent A Room program may lead to higher taxes for property owners that let via Airbnb.
Tax breaks will only be given to property owners who let a portion of their property.
The government seems to be reducing tax breaks to property owners that let extra rooms.

“However, in its response to a consultation document on the Rent A Room system it appears the government is to offer the tax relief only if part of a property is let – not the entire property, as is often the case in modern internet-booked short lets.”

Shock results as 30 lettings agencies probed by undercover teams

Secret shoppers happen in a lot of businesses and home buying is one of them. There were a few agencies that went out to see what is going on in the home buying world and this is what they found. One out of five properties that had dampness issues in them. Most of the times they would not comment on the problem because they needed a professional to get the right facts out, so they don’t want to give out the wrong information.

Key Takeaways:

20% of the homes and properties visited had dampness issues.
Upselling and increasing fees was a big part of the negative reviews on some of the agencies.
Home safety knowledge like carbon dioxide was less than desirable.

“Another, when asking about a damp stain on the carpet, was told that the agent couldn’t comment, because they didn’t have the “technical expertise” to work out whether it was a damp problem.”

AirBnB market – Don’t let the bed bugs bite!

The Airbnb market is rapidly expanding, and a new cohort of homeowners are entering a hospitality marketplace that they may not be prepared for. It is one thing to own one’s home but another to operate a hotel. Bed Bugs are a common problem in the hospitality industry. Most bed bugs can be found in the summer months around the sleeping areas of a room. Most people will not notice a bed bug bite at night and instead discover marks typically around their ankles in the morning. It is very hard to eradicate bed bugs so it pays to be vigilant and prevent an infestation.

Key Takeaways:

Depending on where you are check for bedbugs in the home.
During the Summer and Autumn times are the most common times where bed bugs start showing up.
Bed Bugs will try to hide, but they are visible to the human eye.

“You can identify potential infestations by black marks, bed bug’s droppings, around the edges of the mattress, buttons, springs and headboard.”

Almost one in five landlords say they are in the business for the long term

One out of every five landlords say they intend on doing business in the UK long-term. Even with changes to tax policy, 18% of landlords said that they intend to do business indefinitely. 24% of landlords in East England, the largest amount in the country, said they also intend on doing business long-term. Landlords with a portfolio of properties tend to remain invested for 15-years. Jeff Knight believes that rumors of landlords exiting are exaggerated, but believes that policy must still be sufficient for landlords to not exit.

Key Takeaways:

One in five landlords are planning on staying remaining in the UK housing market.
20 percent of landlords have 16 to 20 years of landlord experience.
There are some concerns about the the possibility of a large number of landlords leaving the market.

“What’s more, today’s portfolio landlords expect to stay invested in the market for an average of 15 years, compared to 10 years for non-portfolio landlords.”

Tax bombshell may curb Airbnb-style short lets

The government is considering tax policies that will increase taxes for those who let Airbnb rooms. The government relaxed these tax policies in 1992 to incentivize renting. The government would alter the Rent A Room system to only give tax preferences to those who rent a room, not entire properties. This is because those who rent an entire property tend to generate more income. Airbnb has been clear that the relief is intended for those who rent a room, not an entire property.

Key Takeaways:

If the government has its way, Airbnb and similar companies will be paying higher taxes than they do right now.
If it is passed, the government will only offer tax relief to those that rent out one room or a portion of a property.
Those that rent out entire properties for higher rental rates will be taxed accordingly as if they are a business.

Demand for ‘lock up and leave’ homes boosting London’s Built to…

London has always been an up-and-coming urban area to live in. A wide variety of people call London home, so the area has developed a large community of flight attendants and travelers. Because of this community’s specific needs, London has developed homes they can ‘lock and leave’ without worry. Homes for these frequent travelers have added security guards and locked gates, so they can travel without fear of their homes being burgled or broken into.

Key Takeaways:

There is a huge increase in demand for ‘lock up and leave’ rental properties in London.
Developers are designing new properties with gated entrances and on-site concierge services.
Located in Hayes, The Gatefold project is located near Heathrow airport, which is ideal for those travel for work.

“The firm says that with London’s airports serving such a wide range of destinations, those travelling overseas for both work and pleasure are looking to ensure that their homes remain safe while empty and for many, a purposefully designed Build to Rent home is the answer.”