National Landlords Association NLA News & Update Richard Blanco, NLA Representatives www.landlords.org.uk www.landlords.org.uk
Recent Changes Now In Force • PRA changes – Jan 2017 changes 145% x 5.5% stress test – 30 Sep 2017 Portfolio Landlord requirements • Section 24 tax changes – Finance interest can be set against profits at basic tax rate only. Tax credit rather than deduction. – Phased over 4 years starting current tax year • Scotland Residential Tenancies – End of no fault eviction – All tenancies from 1 December 2017 www.landlords.org.uk
Impact Of Stress Testing Yield Max LTV Max LTV under old under new criteria criteria 6% 75% LTV 96% LTV (theoretically) 5% 80% LTV 63% LTV 4% 64% LTV 50% LTV www.landlords.org.uk
Stress Testing Whole Portfolio • Example of 145% x 5.5% stress test • Portfolio of £5m – Loans of £2.75m which is 55% LTV • Actual figures – Monthly mortgage payments £5,620 – Monthly rental income £17,460 • Income required to meet stress test £18,250 www.landlords.org.uk
Autumn Budget 2017 • £15billion extra funding for housebuilding over the next 5 years, with target of 300,000 per year • Consultation to launch on the barriers to landlords offering longer tenancies to tenants • Local authorities will be able to increase the council tax premium on empty homes to 100%. • Changes to Universal Credit: – Removing 7 day waiting period at start of claim – Housing benefit recipients will continue to receive their award for first 2 weeks of Universal Credit claim • Stamp Duty Reduction for First Time Buyers www.landlords.org.uk
Other Budget Measures • Rental Payment Data - £2m investment • SDLT additional rate loophole closed • Corporate indexation allowance frozen 1/1/18 • Mileage rate for landlords • Evidence on rent a room relief longer terms • 30 days CGT payment window deferred 2020 • Stricter taxation of non resident property owners www.landlords.org.uk
Tory Conference Announcements • Specialist housing court • Redress scheme for landlords • S21 notice period extended to 3 months?? www.landlords.org.uk
Draft Tenant Fees Bill • Ban all fees to tenants from letting agents and landlords • An exemption for in-tenancy management charges arising because of the action of the tenant – Such as repairs, replacing keys, or late rent charges. • Impose a cap on security deposits of 6 weeks’ rent and a cap on holding deposits of 1 weeks’ rent • Create a civil offence with a fine of £5,000 for an initial breach of the ban on letting agent fees and create a criminal offence for repeat offenders. www.landlords.org.uk
Regulation of Letting Agents The Government is consulting on plans to regulate property agents, including: • Requiring all letting agents and managing agents to be members of relevant professional body (such as UKALA, ARLA or ARMA), • Mandating Client Money Protection for all property agents that handle client money • Already in place: – Must be member of Redress Scheme (or £5000 fine) – Transparency Regulations on Fees www.landlords.org.uk
HMO Licensing Review • Government had intended to – Remove the storey rule so all houses with 5 or more people from 2 or more households are in scope – Extend mandatory licensing to flats above and below business premises (regardless of storeys) – Set a minimum room size of 6.52sq-m in line with existing overcrowding standard (Housing Act 1985) • Supposed to come into force Oct 2017 but Government not yet responded to consultation • Likely to not come into force until April 2018 www.landlords.org.uk
Other Changes Coming Up • 2016 Housing & Planning Act – Banning orders from 6 April 2018 – Still awaiting…. • Abandonment procedure – Electrical Safety Working Group Report Proposals • 5 Yearly check and report to be issued to tenant phased in with new tenancies initially • Encourage good practice: visual checks between tenancies, installation of RCDs www.landlords.org.uk
Minimum EPC Ratings Minimum Energy Efficiency Standards will soon be coming into force, requiring a minimum EPC rating of E, otherwise a maximum fine of £5,000: • From 1 April 2018 – Ban on new tenancies (including renewals and rolling over to periodic)* • 1 April 2020 – Ban on all tenancies (e.g. existing tenancies) • Will be some applicable exemptions, such as lack of tenant consent, and “no upfront cost”. www.landlords.org.uk
The Mayor’s Draft Housing Strategy • Consulting until 7 December 2017 – Support councils to introduce licensing schemes – Support calls for a “light - touch” registration scheme – Introduce a public London Rogue Landlord database – Support employers introducing Tenancy Deposit Loans – Lobby Government for more powers over PRS – Opposing “discriminatory” Right to Rent policy www.landlords.org.uk
Licensing Update - Definitions • Selective Licensing – all privately rented properties • Additional Licensing – HMOs with 3 or more people living in 2 or more households • Mandatory HMO Licensing – HMOs with 5 or more people living in 2 or more households • Article 4 planning directions remove permitted development rights to and from: – C3 Dwelling house (everyone is related) – C4 HMO (3 or more people in 2 or more households) www.landlords.org.uk
Discretionary Licensing • Borough wide • Borough wide selective & additional additional licensing – Croydon – Camden – Barking & Dagenham – Barnet – Newham – Southwark (plus SL) – Islington (plus SL) – Redbridge (plus SL) • Borough wide – Brent (plus SL) selective – Waltham Forest www.landlords.org.uk
Boroughs with part borough schemes • Additional Licensing • Consulting/Consulted – Lewisham – Bexley – Kingston – Greenwich – Haringey – Havering – Harrow – Ealing – Hammersmith & Fulham • Total of 20 boroughs • Selective Licensing with or consulting on – Tower Hamlets licensing www.landlords.org.uk
Boroughs with Article 4 Directions • Borough Wide • Part Borough – Newham – Haringey – Barking & Dagenham – Hillingdon – Havering – Waltham Forest – Enfield – Bexley • Total of 8 boroughs with Article 4 Directions www.landlords.org.uk
Inside Property Podcast • Monthly podcast – Expand, Hold or Sell? – Brexit & Investing – Crime in the PRS – Property in the media – Maintenance – HMOs – Current Affairs editions • insideproperty.org.uk www.landlords.org.uk
Join Us • Today for £75 instead of £99 • Advice line & Library • UK Landlord • Discounts on mortgages, insurance and other services • Your voice • Be a professional • 87% satisfaction rate www.landlords.org.uk
Contacts Your NLA Representative richard.blanco@landlords.org.uk To do business with the NLA natasha.mukhi@landlords.org.uk www.landlords.org.uk
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