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Government publishes right-to-rent code of practice

The Government has issued guidance for landlords affected by the introduction of right-to-rent immigration checks.

The new code of practice is available on the Government website. It explains:

• if your property is affected
• if any exemptions apply
• how to carry out a right-to-rent check
• what documents individuals can show you as evidence of their right-to-rent
• when and how to request a right-to-rent check from the Home Office

From 1 December 2014, some landlords will need to check that someone has the right to live in the UK before letting a property to them. This includes landlords who take in lodgers or sub-let property.

In most cases you’ll be able to carry out the checks without contacting the Home Office. All you need to do is check evidence of a person’s identity and citizenship, for example a passport or biometric residence permit.

During the pilot phase the right-to-rent checks only apply to:

• landlords in Birmingham, Walsall, Sandwell, Dudley and Wolverhampton
• all adults aged 18 and over living at the property
• new tenancy agreements starting on or after 1 December 2014

If you let a property after this date to someone who doesn’t have the right to rent, you could be fined up to £3,000.

If you need more help, call the Government landlords helpline on 0300 069 9799

 


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Buy-to-let celebrates 18th birthday

The year 1996 was the year that John Major was in power, a little known band called the Spice Girls stormed the charts and just 4% of the UK population had access to something called the internet. It was also the year that buy-to-let was born.

ARLA and a small select panel of lenders including Paragon Mortgages, were instrumental in recognising the growing demand from private landlords for specifically tailored mortgage finance to help meet the rapidly growing demand for private rented property.

Over the past 18 years the buy-to-let market has developed considerably, supporting growth in the UK’s Private Rented Sector (PRS) whilst driving up quality and improving choice and competition. Today the PRS is the second largest housing tenure in the UK – over taking the social housing sector for the first time since 1961 in 2012/2013.

In 1996 there were 2.4 million households in the PRS – 18 years later this has more than doubled to 4.9 million. At the same time the sector has seen the fastest rate of improvement in the quality of accommodation of all three major tenures, and tenant satisfaction in the PRS now exceeds those in the social rented sector.

The profile of tenants living in the PRS has also changed since 1996, with more families living in private rented homes. In 1996, 13% of tenants living in the PRS were families – this has now increased to 20%.

John Heron, managing director of Paragon Mortgages, said: “The buy-to-let market has been a force for good for the wider UK housing market. Before the development of buy-to-let landlords had few options when considering how best to finance a rented property. The finance that was available was expensive and poorly matched to the customer’s needs. It was particularly difficult for new landlords to start to build a portfolio.

“Buy-to-let has changed all this. It enabled landlords to access finance that was better designed to meet the specific needs of the rental market at much more competitive interest rates and thus helped expand quality and choice in the PRS.

“Whilst most people continue to aspire to home ownership, and the mortgage industry plays a critical role in facilitating this, for many the PRS remains a housing choice out of both convenience and need. Mortgage lenders can and do work alongside landlords and the letting agency industry to make sure that renting privately provides safe, efficient and flexible housing for those that rely upon the sector for a home.”

Valerie Bannister, president of ARLA, said: “With the deregulation of the industry through the 1988 Housing Act, combined with the introduction of a suitable financing model through buy-to-let, the private rental sector has grown substantially since the 1990s.

“It’s now a thriving force in our housing market that’s growing year on year. Without a vibrant buy-to-let market, landlords couldn’t provide the much needed, good quality and affordable accommodation for tenants that they do.”


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October auction could be highest value event, says Allsop

Auctioneer Allsop has released the residential catalogue for its next sale on Thursday 30th October, taking place at The Cumberland Hotel in London. 
 
There are over 300 lots from locations across the UK set to go under the hammer from 9.30am.
 
The firm has confirmed that due to the significant number of high value properties on offer - 16 lots over £1m, five of which are valued at over £3m – this could be Allsop’s highest value auction. 
 
Two of the most interesting and highly valued lots are lot 26, a six storey building currently arranged as a hostel guided at £5.5m and lot 70A, an office building with planning permission for up to 51 flats (guided at £5m).
 
Allsop has confirmed that distressed properties comprise 17% of the catalogue, which, the firm believes, demonstrates a shift towards private sellers.
 
Ninety of the lots are in the capital and 23 are being sold on behalf of the Salvation Army and the NHS. 
 
The full catalogue can be seen online at: http://www.auction.co.uk/residential/onlineCatalogue.asp 

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Property auctions this week

Detailed below is a selection of four auctions from across the country taking place over the next week. The auctions, from four different auctions houses, are taking place in Manchester, Cornwall, Durham and Sheffield respectively. 
 
Pugh
Date: 23/10/2014
Start time: 12:00
Location: 
Manchester City Football Club, Etihad Stadium, Ashton New Road, Manchester, M11 3FF
Lots so far: 89
Guide price range: £10,000 - £,675,000
Auction catalogue: http://www.theauctionpeople.co/Auctions/SummaryOfLots
 
Miller & Son
Date: 23/10/2014
Start time: 14:00
Location: Preventon Park Hotel, Redruth, Cornwall
Lots so far: 9
Guide price range: £40,000 - £299,950
Auction catalogue: http://www.millerson.com/auctions-results/ 
 
Auction House North East
Date: 28/10/2014
Start time: 19:00
Location: Ramside Hall Hotel, Carrville, Durham, County Durham DH1 1TD
Lots so far: 54
Guide price range: £15,000 - £175,000
Auction catalogue: http://www.auctionhouse.uk.net/northeast/ 
 
Mark Jenkinson & Son
Date: 28/10/2014
Start time: 14:00
Location: The Platinum Suite, Sheffield United Football Club, Bramall Lane, Sheffield S2 4SU
Lots so far: 47
Guide price range: £10,000 - £500,000
Auction catalogue: http://www.markjenkinson.co.uk/auctions/tuesday-28th-october-2014/?start=40 
 
See a full list of upcoming property auctions on our dedicated page.
 
 

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Over £2 million raised at latest Goldings auction

Goldings Auctions has announced the results of its most recent sale on October 1st. 
 
The firm sold 95% of the 17 lots offered at the event in Ipswich, raising over £2 million. 
 
Lot 12 – a 2.2 acre residential plot on Bergholt Road - secured the highest price of the day at £422,000.
 
Meanwhile, the bargain of the sale was the previous lot (11), a piece of residential land in East Ipswich which sold for £20,000.
 
In his auctioneer's note, Goldings auctioneer Tim Golding thanked the 400 people who turned up on the day. 
 
“We are privileged to work with such interesting and diverse properties and grateful for the opportunity to form partnerships with Vendors who entrust us to deliver results,” he wrote. 
 
Golding also took the opportunity to apologise to all the auction’s online viewers who lost their live video stream, promising that measures have been implemented so that this doesn’t happen again.
 
Goldings’ next auction takes place on December 3rd at the Atrium in Ipswich and Tim Golding said the line up for the final sale of the year is already looking promising. 
 
 For more information, visit: http://www.goldingsauctions.co.uk/prop/next_auction.html
 

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Hertfordshire landlord fined £20k for 28 offences

A Hertfordshire landlord has been fined more than £20,000 after pleading guilty to 28 offences in court.

Terence Higgins, 51, of Ware, appeared at Watford Magistrates Court on Friday 17 October after prosecution by Welwyn Hatfield Borough Council relating to two private rentals in Hatfield.

Twenty-three charges relating to a multiple occupancy property at 12 Fern Dells included failures in gas, electrical and fire safety measures which placed the tenants at significant risk of injury. 

There were other failures to protect the safety of tenants and inadequate maintenance of the building including extensive damp and mould that had been allowed to develop in one of the bedrooms, disrepair to windows and flooring, and unkempt front and rear gardens. 

Five offences relating to a property at 10 Badger Way were as a result of failure to comply with Improvement Notices. The notices had been served on Higgins in February 2014 and required him to rectify serious hazards in the property, including a collapsing ceiling.

The court imposed fines of £14,000 (£500 for each offence), and ordered Higgins to pay costs to the council of £6,782.81. A victim surcharge of £120 was also ordered making a total of £20,902.81. Higgins had already incurred costs of £1,375 as a result of the Improvement Notices.

Both properties have since been put on the open market, and one has subsequently been purchased by the council. This will be converted into a family home as part of its programme to increase the amount of good quality council housing throughout Welwyn Hatfield.

Councillor Roger Trigg, executive member for planning, housing and community, said: "It is only a few weeks since our last successful prosecution of a private landlord who was risking the health and safety of their tenants; once again we are delighted with another successful outcome. It is a stark warning to other landlords that we will not tolerate such disregard for the wellbeing of residents.

"These offences were serious breaches of the law and could have led to severe injury or worse. What makes this outcome even more pleasing is that one of these properties will now provide a high quality council home to a family seeking accommodation in the borough."

 


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Tenant jailed for fraud following civil case

A tenant has been jailed for two years following a civil case in which she confessed to fraudulently supplying false references and pay slips to letting agents.

Sharon Watts, 47, from Land’s End in Cornwall provided the false documents to Miller Countrywide and Anthony Richards Property Services to obtain tenancies on two occasions in 2013.
 
Truro Crown Court, which had adjourned the case in June to examine sentencing options, sentenced Watts to two years in prison.
 
Local Cornish papers report one of the landlords involved saying that: “When she got into the property [she] never paid the rent then she basically lived rent free whilst you go through the eviction process.
 
“People always said to me that the police are not interested as it’s a civil case. That’s not correct. If a landlord can show that the application form is false and they fail to pay rent then they are deceiving the landlord out of what rightly is theirs.
 
“I must have spent hours and hours writing emails and letters to the police and Action for Fraud… I wrote to complaints at Action for Fraud, police chief Devon and Cornwall and police complaints.”


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Landlords ‘fessing up to tax evasion, says RLA

Landlords have “responded positively” to the HMRC ‘Let Property Campaign’ that encourages disclosure of past rental profits for tax purposes, according to the Residential Landlords Association (RLA).

In fact, the response has been so overwhelming, landlords could face a six month wait for disclosure forms to be accepted.

Rita4Rent, the RLA’s tax specialist partner, has spoken directly with the HMRC and has discovered that landlords are flooding the helplines, scrambling to understand obligations.

The tax man warned landlords last year that they needed to disclose their rental incomes, or heavy penalties could be expected for non-compliance. However, the HMRC has proved that working with landlords pays dividends with so many landlords coming forward to potentially benefit from more favourable terms.

HMRC provided a set of tools to help landlords understand their responsibilities and provide clear guidance on how to submit a report.

Help in registering with the HMRC, self-assessment tax return forms and guidance, and other useful bits of information are all provided by HMRC.

Whilst the campaign is likely to run for up to four years, landlords should ensure their tax affairs are in order. The RLA strongly urge all landlords to check their claims, use the tools at their disposal and demonstrate the compliance of landlords in the private rented sector.
Landlords needing further information or advice can contact the RLA’s recommended tax advisor, Rita4Rent.


 


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NLA campaigns for council tax exemptions

The National Landlords Association (NLA) is contacting all local authorities in the UK to ask for council tax exemptions for landlords whose properties become empty between tenancies.

Currently, the policy for whether landlords are liable to pay council tax for their unoccupied properties differs across the UK, and with councils soon to be drafting their budget proposals for the next financial year the NLA is keen to negotiate exemptions for landlords now.

The task is being carried out by the NLA’s 37 regional representatives who operate across the UK in order to campaign at a local level.

Carolyn Uphill, chairman and former NLA representative for Manchester, said: “We have to remember that landlords have a legal responsibility to ensure the home they provide is safe and fit to be occupied and often essential maintenance or even larger scale renovation work may be needed before the property is suitable for new tenants.

“We often hear that more should be done to improve the standard of private rented property, yet councils still insist on making landlords liable for council tax between tenancies which is simply another business cost that the landlord is faced with.

“The NLA believe that councils must play their part by allowing a reasonable exemption period of council tax. This would demonstrate they are serious about encouraging better standards in the sector and mean landlords won’t rush to re let their properties without first ensuring they are up to scratch.”


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Rate difference between LTV bands closes

There has been a sharp reduction in the gap between mortgage rates at different Loan-To-Value (LTV) ratios over the past year, according to mortgage sourcing firm Mortgage Brain’s quarterly product analysis. 
 
As of the beginning of October, the lowest rate five year Tracker with a 90% LTV (at 3.65%) is now just 8% higher than the same product with a 60% LTV (3.39%). The same analysis twelve months ago showed a 71% increase between the lowest rate 60% and 90% LTV products. 
 
Similar reductions have also been seen in the gap between the lowest rate two year Tracker mortgages. In 2013 the lowest rate 90% LTV product was 112% higher than the same product with a 60% LTV – now, the rate difference has dropped to 73%.
 
However, Mortgage Brain says the buy-to-let sector has behaved somewhat differently with current data showing that the gap between the lowest rate two year Fixed products (60% and 80% LTV) increased from 66% in 2013 to 77% as of October 1st. 
 
In October 2013 the lowest rate two year Tracker with an 80% LTV was 77% higher than its 60% LTV counterpart. A year on and the gap has widened to 87% with the 80% LTV product currently listed with a rate of 3.73% compared to 1.99% for the 60% LTV product. 
 
Commenting on the data release, Mark Lofthouse, Mortgage Brain CEO, said: “Overall the figures from our latest analysis should not come as a huge surprise. With the threat of a rise in base rates ever increasing purchase mortgages were always likely to rise.”   
 
“The drop in the gap between 90% and 60% LTV rates, however, will be welcomed by those with small deposits. It comes on the back of a number of years when the gap was increasing and should help new home owners to take their first steps on the housing ladder,” he added.
 
*The firm’s analysis, a breakdown of all main product types in the UK mortgage market for a repayment mortgage, is calculated by the lowest rate for a property worth £180,000.
 

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