Councils using ‘Intelligence’ to track down low EPC properties and fine £5,00015:08 PM, 29th March 2021
About 2 weeks ago 36
In the U.K. We have a chronic shortage of Housing. Apparently we need 250,000 New Houses a Year but last year (and that was a good year) we built 141,000 new homes !!
The Government can’t afford to provide them and nor can Local Authorities so over the past 15 years or so the ” Private Sector ” has ” stepped up to the plate ” to an extent, whilst at the same time enabling Mr & Mrs Smith to take care of their long Term financial future as the Government can’t afford that either and Pension Funds have performed abysmally- indeed there are now 1.9 million Private Landlords in this Country .
It sounds a “match made in heaven ” or so you would think – the private sector helps solve the housing crisis and take care of their old age !
erfect! but No – The Government seem to think all these “money grabbing private investors ” are getting rich quick, and are pushing up house prices so they are trying to ” Tax them in to submission ” by applying a 3% Stamp Duty Surcharge on all purchasers (on average £5k in East Midlands ) and preventing Landlords offsetting interest charges against income for tax purposes -and it is working.
In Nottingham the very clever City Council have decided to jump on the ” bandwagon ” by first of all introducing the need to obtain an HMO license if your property is 3 Beds or more – cost a mere £910 for 5 years and now they are proposing that every let property should pay them £600 !!!
And then yesterday the Government announce it will be illegal for letting agents to charge “admin fees ” or ” referencing fees ” . The result will be that these costs will be passed on to the Landlord through higher Lettings and Management Fees .Letting and Managing Agents are not making big money and with more and more ” red tape ” these admin fees and referencing fees will have to be replaced somehow or firms will go to the wall or just shut down !
So Mr Private Landlord who was previously earning a Net Yield after All Costs of circa 3.50-4.0% will now as a result of increased acquisition costs, increased tax , increased letting and management fees and now Licensing fees be lucky to earn 2-3.0% for a significant amount of risk and hassle -there have been 145 changes to the relevant legislation in the past 5 years !!!
So where will they put their money -certainly not the bank @ 0.1% interest if they are lucky!! They will probably move from Residential property investments in to Commercial property Investments where they get longer leases -5 years as opposed to 6 months , stronger covenants , a rent cheque every quarter rather than chasing up the rents every month and net yield after all costs of 6-8% as opposed to 2-3% !!
So keep going Central Government , keep going Nottingham City Council because all you are doing is pushing out the Private Residential Landlord ,which in turn will reduce the number of homes to rent at a time when there is an acute shortage , lead to less house building as one of the key markets for developers shrinks , less Stamp Duty take for the Government and restrict supply resulting in rent rise across the board !
For those Investors that remain, their increased costs will also be passed on to tenants in the form of increased rents as well -a double whammy !!
None of this is rocket science -it is simple economics -restrict supply and the price goes up -unfortunately for the sake of a few ” popular headlines ” the Government and Local Authority are going to make that basic right of somewhere to live ,more difficult for those that they really should be helping!!
My suggestion -scrap STAMP Duty on Buy to Let’s altogether , allow interest to be off set as a cost , remove Local Authority licensing and and the ” rip off fees ” but maintain the right to carry out ” spot inspections ” and introduce a “Cap ” on admin fees and referencing fees -the result -more money in to the sector , more house building , more people taking care of their own pension , more supply of homes to rent ,more choice and stabilised RENTS .
FHP Property Consultants and Fhp Living.
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