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0:01 AM, 21st March 2023, About A year ago 72
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One council has revealed that it’s going to buy 300 homes, worth up to £600,000 each, in a bid to provide emergency accommodation for those being made homeless.
Councillors at Lewisham Council have been alarmed by the rapid rise in the number of families who are reporting as being homeless – or say they are at immediate risk of losing their home.
The council says that the most common reason given by people for becoming homeless was relatives or friends asking them to leave.
However, a council report also highlights that landlord evictions in the borough are also on the rise.
The report states: “There continues to be an increasing percentage of private landlords choosing to increase their rent in line with market prices or choosing to no longer rent out their properties resulting in them disposing of the properties altogether.”
The report goes on: “In 2019/20, this accounted for 19% of all [homelessness] acceptances which has increased to 26% in 2022/23 (year to date).”
Lewisham is also building 2,000 new homes from 2026 to help reduce waiting lists but now needs specific homeless accommodation.
By purchasing the properties outright, the council says it is hoping to reduce its emergency accommodation bill and deliver ‘consistent living standards’.
The council has not yet revealed how much it is setting aside to pay for the property purchases and last year spent more than £143,962 on hotels for homeless families – that was four times higher than was spent on homeless accommodation in 2020/21.
The council says that the number of people approaching it saying they have lost their home has rocketed in two years by 31% to 3,723 – up from 2,833.
In January, Lewisham says it was housing 2,780 families in temporary accommodation – a rise of 60% in seven years.
The council’s report also warns: “Many landlords report that they intend to sell their properties due to reduced cash flow caused by higher interest rates.
“Additionally, many landlords took the opportunity of the strong sales market during 2021, supported by the Stamp Duty holidays, to sell their properties.”
The report also highlights that all of London’s boroughs have average rents that are now higher than their pre-pandemic levels – with fewer landlords willing to rent properties at LHA rates.
And it adds: “This creates a funding gap that will only increase the limitation recharge unless new ways of funding and delivering services are put in place.”
Meanwhile, Lewisham Council has also decided to push ahead with its new landlord licensing scheme.
If approved by the Department for Levelling Up, Housing and Communities, it will cover an extra 20,000 households in the borough.
Lewisham says the scheme will improve the management and quality of privately rented accommodation in an area where one in four households are renting privately.
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Monty Bodkin
13:25 PM, 21st March 2023, About A year ago
Reply to the comment left by Judith Wordsworth at 21/03/2023 - 12:43
"I cannot see why the Licence fee means increasing the rent. It's tax deductible."
Only 20% is deductible (for a basic rate taxpayer). The landlord and/or tenant pays the rest.
Plus the landlord's time spent applying is not deductible.
It all deters new investment and drives out legally compliant landlords.
If it results in just 10% fewer landlords, the obvious consequence is higher rents.
JB
14:15 PM, 21st March 2023, About A year ago
Judith - Monty has replied for me, though he hasn't added the cost of the often futile 'improvements' required.
On the tax issue, very simplified, say:
£10,000 taxable profit @20%
£2,000 tax to be paid
£8,000 for Landlord
With a license fee:
£10,000 taxable profit
£1,000 licence fee
£9,000 taxable profit @20%
£1,800 tax to be paid
£7,200 for Landlord
Grumpy Doug
15:09 PM, 21st March 2023, About A year ago
Reply to the comment left by JB at 21/03/2023 - 14:15
And let's not forget, once you are targeted for a licence, it's never just the cost of the licence. The chappie with the clipboard will want you make all sorts of amendments to your houses. My licencing cost me about £3000. The works required, about £12000.
So yes, my rents went up quite a lot, as did all the others in the area
psquared
15:12 PM, 21st March 2023, About A year ago
Reply to the comment left by Judith Wordsworth at 21/03/2023 - 12:43
I wish people would understand what tax deductible means.
It does NOT mean you get it all back in tax.
It means that you can deduct the expense from your profits so you pay less tax but there is still a cost to the licence.
Gromit
15:15 PM, 21st March 2023, About A year ago
Reply to the comment left by JB at 21/03/2023 - 11:37
... it's the WEF way! You'll own nothing...........
Old Mrs Landlord
15:23 PM, 21st March 2023, About A year ago
Reply to the comment left by JB at 21/03/2023 - 11:37
The usual failure by authorities to join the dots.
Old Mrs Landlord
15:29 PM, 21st March 2023, About A year ago
Reply to the comment left by northern landlord at 21/03/2023 - 13:04
That struck me too, but it is par for the course these days as all the media seem to be left-leaning.
Freda Blogs
15:47 PM, 21st March 2023, About A year ago
I hope Lewisham Council enjoys bringing all those properties up to scratch to meet their own licensing requirements, and enjoys managing all the lovely tenants that don't pay, or create mould (Landlord's fault of course) etc etc - all the usual stuff that private LLs have to deal with. Or will inferior standards be applied?
I wonder too whether any private letting agent would be willing to manage those properties on their behalf. I wouldn't touch them with a barge pole....
Tim Rogers
15:51 PM, 21st March 2023, About A year ago
Reply to the comment left by Darren Peters at 21/03/2023 - 13:13It actually makes a lot of sense, they will probably be able to get excellent rates for loans on an interest only basis. Keep them 10 years and sell they probably double their money. In the meantime they already have a labour force available to maintain etc...
Seething Landlord
16:06 PM, 21st March 2023, About A year ago
Good for them, they will be able to buy up all the properties being sold by landlords to avoid the new licence fee and associated costs. The only problem is that the current tenants will then be added to the number of homeless. Their objective will only be achieved if they can find 300 empty properties to buy.