Tag Archives: council tax

Stung by the £500pw Benefit Cap, no rent being paid – Help! Latest Articles, UK Property Forum for Buy to Let Landlords

This week I have been stung by my first experience of the benefits cap. Stung by the Benefit Cap, no rent being paid - Help

One of my tenants Housing Benefit has gone down to £30pw from £159pw.

This is the cap where the Government are limiting families to £500pw of maximum benefits and all councils will have it by Sept 2013.

My tenant now gets £310 Child Tax Credit, approx £90 Child benefit & £10 Income Support with loans taken off. With Council Tax & the £30HB, we are about £500. A lot of money I know, but when they’ve had if for years, they’re used to it.

My tenant cannot understand at all that she has to pay any rent out her own pocket – so isn’t going to – so she says.

I’ve given her notice in case things get worse, as mortgages don’t grow on trees.

I don’t want her to go and she she doesn’t want to go either!

She rang me up every week for a year to get a house off me, so we are both valued to each other.

I have contacted Shelter, MP’s, Govt, CLG, Advice Centre, the Council Housing benefit and more and none of them seem to know anything whatsoever about direct payment to a Landlord when tenant is in arrears as a result of these circumstances.

The Local Authority is now saying no provision for direct payment to Landlord when in arrears.

As we all know Universal Credit are talking about direct payment to Landlord because of the big arrears they’ve been getting in trial areas. And as we all know, direct payment when LHA was introduced in 2008 was a no no,until we all moaned enough that is. Now getting direct payment is like taking candy from a baby.

However, I’m hitting a brick wall with direct payment under this new benefit cap.

I thought I was a benefit expert until this week. I’m 99% sure they will do something eventually, when enough people get evicted and moan enough, but I and many others need something positive to happen now.

My Local Authority are not interested, they seem to think it’s  funny that supercool Landlord Mick Roberts is now only getting £30pw when he was getting £159pw and in their eyes, lapping it up.

My tenant is still allowed £159pw under 4 bed LHA rate rules, but it is the benefits cap which is limiting her housing benefit payment to £30pw. Clearly this is the first thing tenants lose when going over the £500pw threshold.

Govt needs to wake up because they haven’t got the houses for for these tenants and wherever this tenant ends up she will only get £30pw towards her rent, so will be in the same boat with any Landlord.

The big families are no longer attractive!

Jeez, I wanted this to be a quick post, but if any experts reading this know more than me and can help, it would be very much appreciated.



Council tax exemption Latest Articles, UK Property Forum for Buy to Let Landlords

I purchased a property about 18 months ago in the Falkirk District.

It needed some refurbishment so was empty for a few months and I applied for and received a council tax exemption.

Falkirk Council allow a 6 month tax exemption if property is unoccupied and unfurnished.

However, I recently received a letter informing me that as the previous occupant had now claimed tax exemption prior to me purchasing the property, my exemption was backdated and I now owed the council some tax.

Has this ever happened to anyone else and can the council do this?

Thanks for your help

RichardCouncil tax exemption

Private paying tenants – How large and secure should their income be? Latest Articles

We let out properties mainly to Housing Benefit tenants. Despite the general assertions on this site, we haven’t had substantial arrears, or substantial damage to our property. We know how we can short circuit those arrears, on the whole.

Both instances of arrears we have had however, have arisen under private paying tenants just like Mark’s experience.

I wonder how other landlords calculate affordability for private tenants. We don’t have high rents – about £500 on some properties and about £550 on others. We’ve found tenants who have been able to pay on relatively low earnings. What yardstick do other readers use?

Employers references are some help, but can be manipulated or falsified. Although a credit check can assist, there are limits to that.

We find that at least we know – until any further government cuts -what housing benefit (or equivalent) will be received, although this is now complicated by the contribution to council tax now required of HB tenants.

In contrast, an employee can be fired at any time. How far do others go in enquiries of the employer?

Edwin income

Certificate of Lawfulness for a HMO HMO's & Student Lets, Latest Articles, UK Property Forum for Buy to Let Landlords

I have a question regarding what would be acceptable information for a planning department to give a Certificate of Lawfulness for a property I am potentially looking to purchase.


Property in question is the heart of one of the areas where 80-90% of all properties are of class 4 use. As many of you are aware since March 8 2012 there has been a change in the rules relating to HMO’S and planning. Continue reading Certificate of Lawfulness for a HMO

Who is responsible for council tax when a property is abandoned? Latest Articles, UK Property Forum for Buy to Let Landlords

My understanding is that when a tenant abandons a property, they are responsible for the utility bills (gas, water, electric, phone) up until the end of their contract or until a new tenant moves in.

It appears that if you send the utility company a copy of the AST, and in the terms it states that the tenant is responsible for these bills (which include a daily charge!), they will not put the account into the landlords name and it will stay with the tenant.

What about the council tax, especially now that local councils won’t give you an exemption period between tenants?

Personally I am going to try this but would love to hear from anyone who can confirm the position.

John SpeakmanWho is responsible for council tax when a property is abandoned?

Council Tax Responsibility and risky advice to tenant by CAB Latest Articles, UK Property Forum for Buy to Let Landlords

Council Tax ResponsibilityCitizens Advice apparently advised my periodic tenant yesterday that she can move out immediately by signing a letter agreeing to DPS releasing the deposit to me. I suppose, technically, she has given her one month notice and paid her final month’s rent in the form of the deposit.

She is at liberty to vacate any time during that one month notice period. Continue reading Council Tax Responsibility and risky advice to tenant by CAB

Problems dealing with utility companies when the students leave? Landlord News, Latest Articles, UK Property Forum for Buy to Let Landlords

Student UtilitiesEvery summer I have to sort out the new names and contact details for my 120 plus students in all my HMO properties for the Gas, Water and Electric. Council tax is pretty easy as the University send these across to the council automatically.

The process I go through is checking who the utility provider is (students do switch during the year) then emailing the provider the new tenant details as well as the meter readings.

Every year there are issues, some providers saying they have not had the email, no new bills arrive for months requiring me to chase things up, utility companies trying to chase me for unpaid bills when the students try a fast one etc etc.

I know there are a few companies out there: utility warehouse etc that provide 1 single bill but in my experience the students are very wary of these companies.

What do other HMO landlords do?

Is this process a ton of hassle for everyone?


Laurie Hugues

Help! – My Letting Agent didn’t tell the Council I was renting to students Buy to Let News, Landlord News, Latest Articles, Property News, UK Property Forum for Buy to Let Landlords

Help! - My Letting Agent didn't tell the Council I was renting to studentsMy house is rented to students and is managed by a letting agent.

Now as we know, students are generally excepted from Council Tax. However, neither my tenants nor my managing agents appear to have informed the council.

I have now received a summons.

Please let me know what I should do in this situation.

Thanks in advance

Sulman Joziee

Capital Allowances – Tax savings for HMO and Multi Let owners Landlord News, Latest Articles, Property News

Council Tax CalculatorPart 2 of 2 written by Bill Loryman

The first reactions from Property Investors hearing about Capital Allowances are that they sound too good to be true and that,”surely my Accountant has identified them for me?”

Well, firstly they have been around since 1878 and are not a tax loop-hole or tax avoidance scheme. If you own a commercial business property, including an HMO or Multilet, you are entitled to claim Capital Allowances for them.

Secondly, the process of valuing the likely tax savings has to be completed by Capital Allowance experts who need to send Surveyors into the property to assess the “plant & machinery” – fixtures and fittings – assets etc. that are in the fabric of the building. They then prepare a typically a ten page report, with photographs, plans and a detailed analysis of all the qualifying assets that will satisfy the HMRC guidelines on submitting Capital Allowance claims.

This is a very specialised tax service that many accountants simply outsource in order to help their clients. A specialist will help you submit a claim, or work with your accountants to work out how much tax and money you can save, either as a tax rebate or off-set over future years.

• You need to be a UK tax payer. The investment property can be owned by a Company or a person. Whether the tax band is 20%, 40% or 50%, the higher rate you pay the greater the tax benefit and savings.

• The minimum value of a property really needs to be £150k but total value of portfolio qualifies. If you are buying this year or last you can qualify for AIA (Annual Investment Allowance) of up to £250,000 which can help make the claim successful and give substantial tax savings.

• Your accountant will claim for the furniture and general repairs but Capital Allowance surveyors look into what makes the building work, so the hidden assets unclaimed in the fabric of the building, items such as heating installation, wiring, lighting, fire alarm systems etc. are all valued using Quantity Surveying rules that confirm to the HMRC guidelines on submitting Capital Allowance claims.

Three of our recent examples are shown below:

Sussex Hearts Norfolk
HMO/Multi Let Purchase Price £280,000 £155,000 £205,000
Capital Allowance Identified £28,000 £12.500 £9,200
Net Tax Saved £14,500 £3,500(refund) £7,680(refund)

Clearly everyone’s tax situation is different and you will need to discuss preliminary details in order to get an illustration of the likely tax savings such as property address, type of business – Multi-let, HMO, student let, holiday let etc, date of purchase and the price paid plus the value of any improvement work you have carried out.

When you (and your accountant) decide to go ahead an engagement letter to be signed which gives the authority to contact the Land Registry to ensure no previous claims have been made. The property will then be surveyed for qualifying assets and a full report prepared for submission to HMRC.

The whole process typically takes about 10 – 12 weeks and should always involve your accountants. Fees for this service are usually generated out of a small percentage of the claim value on a ‘no claim – no fee’ arrangement.

Bill Loryman is the Managing director of HMO Tax Limited and has 20 years experience in the property world involving franchising, licensing, acquisitions and property development.

If you would like an illustration form of your likely tax savings on your investment property please complete your details below.

Oops! We could not locate your form.

ARLA’s advice on what to expect from the private rented sector Landlord News, Latest Articles, Property News

ARLAThe latest figures from letting agents suggest that the UK still has a healthy appetite for rental properties. According to The Association of Residential Lettings Agents (ARLA) over half (54.8 per cent) its members reported that they had more tenants on their books than available properties to rent. With demand so high, those seeking rental properties for the first time may feel rushed into a decision without fully understanding the legal obligations or what to expect from the landlord so ARLA has today issued advice on what you need to do or know beforehand embarking on a tenancy.

Ian Potter, Managing Director, ARLA said: “Many people find the prospect of renting a home daunting, whatever their age or experience. Particularly in today’s competitive market prospective tenants may rush into making a decision about a property for fear of losing out.

“But tenants should remember that rules and procedures vary depending on the type of tenancy. Researching their obligations and fully understanding the legal aspects of being a tenant, even before they start searching for a property to rent, is vital.”

ARLA has the following advice to help those unfamiliar with renting make their experience as smooth and trouble-free as possible:

1. Lettings is an unregulated industry: The rental industry is not subject to any central Government legislation, meaning that anyone can set up as a letting agent or landlord. For peace of mind, do your research and seek advice from a letting agent affiliated to a professional organisation like ARLA. All ARLA agents must adhere to a strict code of conduct, as well as offering client money protection and redress schemes, which help protect consumers if things go wrong.

2. Your deposit should be secure: Typical deposits required can range from anywhere between four to six weeks’ rent. This deposit should be paid by your landlord or agent into one of three government-approved tenancy deposit schemes. It is a legal requirement that the landlord or lettings agent protects the deposit in this way. Tenants can find out more at: www.direct.gov.uk.

3. A professional inventory can help protect you: A detailed inventory compiled at the start of the tenancy assists in assessing any costs that may be deducted from your deposit at the end of your contract. Be present when the inventory is being done; if that’s not possible, insist on seeing a copy to ensure you agree with what has been noted. If there are photographs make sure they are good quality and reflect accurately any items captured. All documents should be signed and agreed by both landlord and tenant.

4. There are different kinds of tenancy agreement: Many shared tenancies contain a joint liability clause and this means you are responsible for the actions of your co-tenants for the duration of the tenancy. This includes covering their share of the rent if they were to unexpectedly move out. Before you enter such an agreement consider how well you know your sharers. And if you are asked for a guarantor when sharing, then make sure that they understand that they are guaranteeing all your responsibilities contained in the tenancy agreement.

5. Meeting safety standards: Landlords have a legal obligation to ensure gas safety is checked annually. Make sure you have seen the gas safety certificate and instructions for all electrical items. Also check to see if all soft furnishings comply with the Furniture and Furnishings (Fire) Safety Regulations 1988 and are fire safety compliant. Look for the fire safety label on all furnishings.

6. Energy performance certificates: Energy Performance Certificates should be given to you by your landlord or agent before you move into a new property. This will show you how energy efficient a property is.

7. Carrying out repairs: Advise your landlord or managing agent when things need fixing to avoid bigger problems in the future. Landlords are responsible for most repairs to the exterior or structure of a property including problems with the roof, chimney, walls, guttering and drains, as well as electrical, heating, hot water and sanitary installations. For minor repairs and maintenance the tenant is usually responsible, but any changes – like re-decorating – should be pre-approved by your landlord.

8. Pay bills: Other than paying the rent on time, tenants need to ensure they are paying bills which are not included in the tenancy agreement. In most cases these include bills for council tax, utilities, TV licence, Internet and telephone charges. Tenants must also remember to check their tenancy agreement as some landlords will forbid any change to utilities supplier.

If you need the services of an ARLA accredited Lettings Agent

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