HMRC has issued several warnings to landlords in recent months to remind them that profits from rental properties must be declared. They have done this to give landlords the opportunity to admit their earnings before the next stage of the crackdown begins.

There are estimated to be around 1.3 million private landlords in the UK. Unfortunately, less than half of these people are currently declaring extra income from property, which strongly suggests the rest are either in ignorance about their responsibilities, or deliberately avoiding their tax liabilities. Many landlords are ‘accidental landlords’—people who were unable to sell properties when the market crashed, and therefore let them out instead. Now that the market has recovered, many landlords will be looking to sell, which also puts them at risk of capital gains tax.

HMRC Information Gathering
HMRC has lots of information gathering strategies at its disposal, which means it is very difficult to avoid pulling the wool over the eyes of the taxman indefinitely. HMRC will check bank records to see who has taken out a landlords’ mortgage. They can also investigate records at the Land Registry. Deposit Protection schemes are another avenue of investigation.

Reducing Your Tax Liability
• Mortgage interest – There are many ways to reduce the amount of tax you pay. Having a mortgage is actually useful for tax purposes because you can use the interest you pay on the loan to offset your tax bill.

• Maintenance repairs – Every day repairs and maintenance can be used to offset tax, but home improvements cannot.

• Letting expenses – If you pay a letting agent, service charges, accountants’ fees etc, all of these can offset your tax bill.

If you have yet to declare your income from rental properties, time is running out, so don’t delay any longer.

Anyone living in the south of England can’t fail to have noticed the fact that a massive storm passed over the UK at the beginning of last week. The media was awash with pictures of storm lashed coastlines and fallen trees everywhere, which is all very interesting when it is happening somewhere else, but not quite so good if your house has just been flattened by a huge tree. But if you were affected by the storm in any way, fear not because the NLA has just issued a guide for landlords with properties damaged in the storm.

Check Your Insurance Policy
Hopefully you will have insurance cover in place, so now is a good time to pull out the policy documents and check the small print to see whether (or not) your property is covered by storm damage. And if you don’t have insurance cover or your policy doesn’t include storm damage, consider this a valuable and very expensive lesson well learned.

Do Your Tenants have Contents Insurance?
Flood damage may be a problem in some areas affected by the storm. Your landlord insurance should cover fixtures and fittings affected by water damage—for example kitchens and carpets—but the tenant will need to have contents insurance in place if his own possessions have been damaged by water.

What’s the Damage?
If the damage to the property is not too severe, consider whether it is worth making a claim on the insurance. Claiming will cause your premiums to go up, so weigh up what the repairs are likely to cost against paying extra on future insurance premiums.

Whatever the damage, do make sure your tenants are okay and if the property is no longer habitable, check whether your insurance will pay for alternative accommodation.

The NLA is warning MPs that UK landlords could be put at risk if the
government proceeds with plans to force landlords to check their tenant’s
immigration status. However, ministers are convinced that the system will work
and that landlords are in an excellent position to be able to identify illegal
immigrants who are not entitled to be in the UK.

Landlords Keeping Tabs on Tenants
The new system will come into effect in October next year. Landlords will be
expected to check documentation provided by tenants. If tenants cannot prove
they are UK citizens they will have to produce documents to prove their
status, which landlords will be able to verify by contacting the Home Office.

Potential Fines
Unwittingly renting a property to an illegal immigrant will not attract
criminal penalties, but landlords will be fined if they mistakenly take on a
tenant who is not entitled to be in the UK. But the fines are only part of the
wider picture. The NLA are concerned that asking landlords to check up on
tenants could put them in the firing line.

The NLA Speaks Out
“Landlords simply cannot walk in the property and require the tenant to speak
to them,” Chairwoman of the NLA, Carolyn Uphall, was quoted as saying in a BBC
report a couple of days ago. “If a landlord just turns up unannounced that can
be harassment and a criminal offence.”

“In the worse scenario, the tenant feeling themselves possibly under threat –
because they might be sent out of the country and perhaps back to a war zone
they are very frightened off – could potentially become aggressive with the
landlord.”

The NLA is concerned that some tenants may become aggressive if they feel
their immigration status is in question, which could lead to vulnerable
tenants being forced to use rogue landlords.

If you are a landlord, what is your opinion on the matter? Let us know in the
comments.

Thousands of buy to let landlords with tracker mortgages are up in arms
against the West Bromwich Building Society’s decision to raise its tracker
rate by 2%, even though the Bank of England base rate hasn’t moved in four
years.

Building Society Attempts to Justify Rise
According to the BBC, the West Bromwich Building Society is justifying the
rise by saying it has no choice because it now costing more for them to fund
tracker mortgages. It also claims there is a clause in its terms and
conditions that allows it to alter interest rates—something many customers are
disputing.

Landlords Fight Back
One landlord fighting against the building society is the equivalent of David
trying to take a stand against Goliath. But it isn’t just one landlord
fighting back. More than one thousand aggrieved buy to let landlords from an
online property forum have joined forces. Many have already sent their cases
to a firm of solicitors, who are also representing customers unhappy with the
Bank of Ireland (who also raised their rates some time ago).

Many landlords fear that other lenders will jump on the bandwagon and raise
their rates and mortgage brokers are advising anyone affected by the current
increases to contact the FCA via letter. The buy to let mortgage sector isn’t
regulated, but lenders are, so it is worth complaining.

Landlords: have you been affected by the West Bromwich Building Society or
Bank of Ireland rate hike? If so let us know whether you are taking action to
try and force the lenders to do a ‘u’ turn

An Edinburgh landlord has lost possession of his two properties in a case that has been described by a Scottish newspaper as a ‘first of its kind’. Following a recent court case, the local authority is now in charge of the properties and will act as temporary landlord for the next twelve months.

Anti-social Behaviour and Rowdy Tenants
The so-called ‘party flats’ in Grove Street, Edinburgh, have been the subject of numerous complaints about anti-social behaviour and noise for months. The landlord had been renting them out to stag and hen parties and was charging £800 per flat for revellers to stay there for two nights. Unfortunately the flats are located in a quiet residential area and local people were not amused at being woken up every night by the sound of shrieks and rowdy behaviour.

Council Enforcement Notices Ignored
Despite being slapped with several enforcement notices, the landlord failed to see the error of his ways. He was eventually caught out when council officials posed as stag and hen organisers. Once they had enough evidence, he was taken to court and the council’s application for a management control order was approved. It hasn’t been decided exactly what responsibilities the council will have over the two properties, but they have assured local residents that stag and hen parties will no longer be welcome. Existing bookings may still be honoured, but this won’t include large groups.

A spokesman for Edinburgh Council was quoted as saying: “I hope this court ruling sends out a clear message to landlords.”

The numbers of people renting instead of buying has never been higher, but with reports of landlords and letting agents placing unnecessary restrictions on tenants, according to the Guardian, many of them are not taking this lying down. All over the country, tenants are joining forces and going on the warpath in an attempt to restore the balance of justice in their favour.

The Rise of Tenants’ Groups
The cost of renting homes in the UK is now at an all-time high. The average tenant pays more than £750 per month. Yet despite this many tenants are being forced to pay unfair fees and live in badly maintained properties run by rogue landlords. As a result it is hardly surprising that tenants feel the need to set up support groups and campaign against unfair fees and retaliatory evictions.

Landlord Ratings
One such group is called the Tenants’ Voice—its members are people who came together to share their experiences of the letting industry, both good and bad. The group is still in its infancy, but already they have a huge following on Facebook and are planning a ‘trip advisor’ style ratings website where tenants can leave feedback about landlords and letting agents.

Tenants’ Coalition
And they are not alone: there are other tenants’ groups springing up all over the UK where tenants in the same area have formed a coalition in order to seek redress against rip-off letting agents and dodgy landlords. As an individual, their voice was faint, but as a group, they are able to wield a lot more power.

Landlords: how do you feel about tenants’ groups? Let us know in the comments.

When the bedroom tax was first introduced, lots of housing charities were up in arms. They said that the controversial tax would cause enormous hardship to vulnerable families living in rental accommodation. Anyone in receipt of Housing Benefit who had a spare room would be affected by the changes and some families stood to lose up to £100 per week from their Housing Benefit, which is a not inconsiderable amount in these tough times.

Benefits Claimants Back to Work
The whole point of the so-called Bedroom Tax was to give people an incentive to go back to work. Well in this instance it seems to have worked because according to the Daily Mail today, a recent survey undertaken by a Tory councillor has revealed that 11% of benefits claimants in areas governed by a Tory council have stopped claiming benefits.

Work Really Does Pay
Instead of enjoying a lifestyle funded by the state, these people have taken the decision that work really does pay. However, there does appear to be a wide variance across different areas of the UK. For example, in Tower Hamlets, London, 32% of Housing Benefit claimants came off benefits whereas in Liverpool only 2.5% decided to look for work.

Labour Pledges to Reintroduce the Subsidy
So despite the claims from housing charities and the opposition, it would appear that a lot of hard up families have chosen to get a job rather than lose their more spacious rented home. But if Labour comes back into power, they have pledged to reintroduce subsidy (although how they intend to fund this remains unclear).

Landlords – let us know if the bedroom tax has affected you and your tenants!

On Wednesday the government announced plans for a crackdown on rogue landlords
who harass and rip off their tenants.

The Government Plans to Protect Tenants
Letting agents will be forced to join a redress scheme so that disgruntled
tenants are able to complain about poor service and hidden fees. And if the
complaints are subsequently upheld, they will then be able to claim
compensation.

Hitting Rogue Landlords Where It Hurts
Landlords in the private sector will also be affected by the government’s
plans to protect tenants living in rental accommodation. Plans are being drawn
up to introduce a code of practice for private landlords, which will lay out a
series of minimum standards landlords are expected to reach. The details have
yet to be finalised, but it is possible that landlords who let out sub-
standard properties may be required to repay rent if a property is found to be
dangerous. Landlords may also be asked to repay Housing Benefit.

Eric Pickles Speaks
As part of a statement published on Wednesday in the Independent, Eric
Pickles, the government’s Communities Secretary, said was quoted as saying:

“This Government is on the side of hard-working people and the last thing we
want to do is hurt tenants and kill investment by increasing costs and
strangling the sector with red tape. But tenants deserve better value for
money and dodgy landlords should be under no illusion they can provide a
shoddy service with impunity.”

The government hopes that these reforms will improve the private rental sector
by driving up standards and pushing out the rogue landlords.

One Lincolnshire council is hoping that the introduction of a new landlord
licensing scheme will help to reduce the number of incidents of anti social
behaviour in rental properties.

Antisocial Behaviour and Criminal Landlords in Boston 
Anti social behaviour and problem tenants are a real problem in Boston,
Lincolnshire. Figures indicate that there are around one and a half more
recorded incidents in Boston than anywhere else in Lincolnshire, which is why
the council is determined to deal with the issue. A lot of the incidents
originate in HMOs where larger properties have been sub-divided up into small
bedsits. If a responsible landlord does not properly manage the property
properly, noise and excessive rubbish soon become a problem for people living
in the same neighbourhood.

Annual Licensing Scheme for Landlords
Boston Borough Council believes that there is a strong link between antisocial
behaviour and poor property management. By regulating landlords through an
annual licensing scheme, the council thinks that rogue landlords will be
driven out of the city and the number of nuisance tenants in residence will
fall. Landlords will be charged £490 per year. The license fee for HMOs will
be higher at around £800 per year.

The Misery caused by Bad Tenants
Noisy and irresponsible tenants can cause untold misery for their neighbours.
Quite often problems get worse over time when landlords fail to step in and
deal with problems early on. As a result, the council is warning bad landlords
that their properties will be blacklisted if they don’t come up to scratch.

National Trust properties are eagerly sought after by more discerning tenants,
but according to a recent BBC report, increasing numbers of tenants are
unhappy at the treatment being meted out by their National Trust landlord.

Short Term Contracts
Pretty stone cottages and historic farmhouses in idyllic locations are a dream
home for many people but, unfortunately, an awful lot of these people are not
getting a fair deal.

The problem many National Trust tenants have is the lack of security caused by
short-term tenancy agreements. The government has recognised this as being an
issue in the private sector and introduced changes in its new ‘Tenants’
Charter’. Tenants can request longer tenancies, but only as long as the
landlord agrees. Unfortunately, many disgruntled National Trust tenants are
being moved on unreasonably early, despite being given assurances at the
beginning of their tenancy that they would be allowed to stay long term.

Busy TANT Helpline
The Tenants Association of the National Trust (TANT) has a helpline for
tenants. It is reporting a growing number of issues related to tenancy
disputes, bodged repairs and rising rents. One family were told that as long
as they were ‘good tenants’ a long-term tenancy in their National Trust
property would be no problem at all. So they spent money on the place—new
kitchen and flooring—only to be told their tenancy would not be renewed after
twelve months and they had to move out. The family are understandably
devastated.

Sadly, it would appear that although the National Trust is great at conserving
historic buildings, it isn’t so great at being a caring landlord.