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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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Blodwyn
18:49 PM, 22nd March 2023, About A year ago
Reply to the comment left by Tom Crispin at 22/03/2023 - 18:02
Good luck Tom, let us know how you get on!
Morag
7:45 AM, 25th March 2023, About A year ago
Reply to the comment left by Judith Wordsworth at 21/03/2023 - 12:43
Just because it's tax deductible doesn't mean it's not an additional cost. It just means you save 20 or 40% of the cost, you still have to pay 80 or 60% of a cost you didn't previously have. If the fee is £1000, that's an extra £600 or £800 that you need to find from somewhere.
Judith Wordsworth
7:55 AM, 25th March 2023, About A year ago
Reply to the comment left by Morag at 25/03/2023 - 07:45
OK all being dim.
If a licence fee is an allowable expense in full, say like an ECIR or Gas safety certificate, how is it costing landlords money?
You pay it to Peter and get it deducted before you pay Paul any money due.
boogleshq
8:41 AM, 25th March 2023, About A year ago
Reply to the comment left by Judith Wordsworth at 25/03/2023 - 07:55
How is it costing landlords money? The license fee (about £1300 in Nottingham) is a COST…. So that’s £1300 you no longer have. That’s how it’s costing LLs money. We can’t just think “oh well I can deduct it from the profits and pay less tax”… if that’s the case… make the license fee “£13k”… and then you’ll have no profit at all! Can you see how it’s costing the LL money now? You pay it… it’s a cost. To get it back, you’ll have to charge more rent… remember - they want to charge you tax on your GROSS sales revenue (total rent in)… and if you’re pushed about the “£50k” per annum mark, then you’re now a 40% tax payer… it’s a real cost. It’s not just a payment it’s a time cost and you can be inspected at anytime. The Notts scheme has been in place since about 2018. To me - it’s just a revenue generator for the council. They say they don’t make any money from it. I don’t believe them.
Grumpy Doug
8:46 AM, 25th March 2023, About A year ago
Reply to the comment left by Judith Wordsworth at 25/03/2023 - 07:55Judith, like ALL your deductions, being tax deductible just means that the taxman is contributing the portion equivalent to your own tax rate (20% if you're a basic rate taxpayer, 40% for higher rate etc).
Example without licencing fee (basic rate payer, ignoring your tax free element)
Income £10,000
Tax £2000
You keep £8000
Example with licencing fee
Income £10000
Licence fee £2000
Net after fee £8000
Tax £1600
You keep £6400
So you are now £1600 poorer after the licence fee of £2000, the taxman has only covered £400 of it. That's 100% tax deductablity for you!!
NewYorkie
11:03 AM, 25th March 2023, About A year ago
Reply to the comment left by Grumpy Doug at 25/03/2023 - 08:46
All councils will eventually be doing this, because there is no way to oppose it. If the cost was, say, £1500, it would have been the net profit for 7 months for the property I sold last year. How is that sustainable for landlords? It's just one of the reasons I've had enough, and my answer is to leave the PRS, and leave the councils to sort out the housing need.
Darren Peters
11:05 AM, 25th March 2023, About A year ago
Reply to the comment left by Judith Wordsworth at 25/03/2023 - 07:55
"...If a licence fee is an allowable expense in full, say like an ECIR or Gas safety certificate, how is it costing landlords money?"
Unless the landlord is able to increase the cost of the rent by the amount of the licence fee it costs money.
Taking an oversimplified example with no other costs:
Year 1
Rent is £2,000 per year, no licence fee.
Gross profit is £2,000. Landlord pays tax at 20% on £2,000 (Ie £400) leaving profit of £1600
Year 2
Rent is £2,000 per year, licence is £1,000.
Gross Profit is £1,000. Landlord pays tax at 20% on £1,000 of £200 leaving profit of £800
Year 1 profit £1600, Year 2 profit £800
The licence has cost £800. The landlord has £800 less this year than last year.
NewYorkie
11:21 AM, 25th March 2023, About A year ago
Reply to the comment left by Darren Peters at 25/03/2023 - 11:05
Please stop trying to explain this. If a landlord doesn't understand the basics of profit and loss, it won't end well.
Tim Rogers
12:19 PM, 25th March 2023, About A year ago
Reply to the comment left by NewYorkie at 25/03/2023 - 11:03I fear you are right, all councils will start trying to do this as it's such an easy target for serious cash.
As I recall the landlords in Brighton stop the council applying a licencing scheme by proving to the minister, who must give permission, ( I think that's still the case), that the criteria laid down were not met and therefore no scheme was required. The minister confronted with this withdrew permission. I don't thik that Brighton have found a way round it yet?
Again memory, didn't Nottingham fail to show that the revenue was bing used as required, to improve letting standards. Wasn't there some issue that they made X in revenue, (supposedly to fund the team to do checks etc), but had only inspected some 26 properties in 2 years?
It strikes me that the only way to fight it is to prove a council are not following the ministerial guidance and criteria. If that can be proved, then there is a fighting chance to dismantle the licencing.
Like many others, should licencing effect me in the future I would sell up and retire fully. I'd be sorry for my tenants, most of whom I've had a long time.
Mick Roberts
13:44 PM, 25th March 2023, About A year ago
So a man selling a Mars Bar in a shop is not allowed to put his prices up. If people want cheaper, they go up the road to another shop.
Except the Council & Govt has made it impossible for the tenant to find another house up the road.
So now let's tell the Landlord he has to be a charity. Except that is what a Council house is for. Not a Private individual who allows u to rent u his house on terms to suit both.
And then this Council decides to bring in Licensing. You couldn't make it up. Watch the homeless increase now.
I want Nottingham Council to buy a lot of my houses. They refusing to talk at moment.