Landlord Investor NOV 2015

BY

INDUSTRY

EXPERTS

COVERING

ALL

ASPECTS

OF

BUY-TO-LET

NOVEMBER 2015

WRITTEN

LANDLORD | PROPERTY | INVESTMENT

- Tom Entwistle the power of the checklist: IS RED TAPE THE FUTURE FOR LANDLORDS? - Tom Entwistle

- Christine Schulz HMO: the planning and licensing landscape - Shawbrook Bank

- Steve Cox LONDON TOMORROW: SHAPING FUTURE CITIES - Colin Stanbridge

IS RED TAPE THE

FUTURE FOR LANDLORDS?

T R A N S PA R E N T

LENDING

Our commitment to sustainability and transparency has delivered over £1bn in lending to property professionals, investors and SMEs. Shawbrook helps property professionals succeed: •

Transparent finance underpinned by a responsible lending framework

•

Personal, case-by-case approach to funding

•

Clarity of fees and charges across all products, at all times

•

Broad range of competitive short term and term products

•

Lending available for individuals, LLPs and limited companies

r w.b idgin

w

2015

cia l.co.u

w

T 01277 751 112

ndc omm

er

ga

k

C O N TA C T S H A W B R O O K T O D AY

Awards 014 2

pi@shawbrook.co.uk

W W W. S H AW B R O O K . C O. U K

COMMERCIAL LENDER OF THE YEAR 2013,2014 & 2015

MOST INNOVATIVE LENDER 2013 & 2014

BEST SERVICE FROM A COMMERCIAL MORTGAGE PROVIDER 2012, 2013 & 2014

BEST COMMERCIAL MORTGAGE PROVIDER 2015

SPECIALIST

S H O RT T E R M LO A N S

C O M M E RC I A L

TRADING

B U Y TO L E T

& REFURBISHMENTS

INVESTMENTS

BUSINESSES

ANY PROPERTY USED AS SECURITY, INCLUDING YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT

3

WELCOME TO THE NOVEMbER ISSUE OF LANDLORD INVESTOR! Editorial Editor

Tracey Hanbury editor@landlordinvestmentshow.co.uk Editorial Contributors Alan Blockley Andrew Ellinas Christopher Hamer Colin Stanbridge David Humphreys easyProperty Emma Cox Kam Dovedi Martin Wilkinson Michael Hammond Nick Gill Paul Shamplina Peter Littlewood Simon Zutshi Steve Cox Tom Entwistle Wayne Trevail

Art Dept.

Design Craig Edmonds Advertising Beverley Meliniotis

Contact 0208 656 5075 landlordinvestmentshow.co.uk /LandlordInvestmentShow @LandlordInShow

Tenants History LTD Southbridge House Southbridge Place Croydon CR0 4HA Statements and opinions expressed in articles, reviews and other materials herein are those of the authors; the editors and publishers. While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. Tenants History Limited and our contributors will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through the promoted links.

This month we cover a wide range of topics including the latest on tax advice, legal issues, up to date legislation, red tape and how to survive it plus much more!

2015 has been an extremely busy year here at Landlord Investor and the Landlord Investment Shows. Since our shows were launched in May 2013 we have organised 28 events to date! Our National London Olympia show which is taking place on Thursday 19th November at Kensington Olympia’s Conference Centre, 10am – 5pm is our biggest show to date with over 80 exhibitors from the private rented sector and 27 seminars covering a huge range of subjects from financial advice, evictions, investment opportunities, buying at auction, referencing, tenancy deposits, latest legislation to name but a few. So if you have not booked your free tickets there is still time, visit the show website: www.landlordinvestmenshow.co.uk

CONTENTS Expert Advice Industry Update Industry Spotlight HMO's Investment Lettings & Management Landlord Insurance Legal Tax Advice

06 14 20 24 28 38 46 48 54

Landlord Investor TV to be launched at Olympia We are delighted to announce we are launching Landlord Investor TV at the London show which will be aired on Property TV monthly on Sky channels 238 & 272.

The programme will a great added edition to reach out to a huge audience. The entire team are really excited about delivering a monthly programme which will be dedicated to Landlords, Investors, Property Professionals and indeed new investors on how to grow and retain a property portfolio. Come along and meet the Property TV team and crew at Olympia who will be filming and interviewing in a pop up studio on the day.

We hope you enjoy this edition and hope to see you at our events!

Tracey Hanbury | Editor Landlord Investor

Tracey Hanbury

LANDLORD INVESTOR November 2015

4

MEET THE TEAM

SHOW LOCATIONS

TRACEy HANbURy EDITOR & SALES DIRECTOR

T: 0208 656 5075 M: 07931 308 875 tracey@landlordinvestmentshow.co.uk

STEVE HANbURy DIRECTOR

T: 0208 656 5075 M: 07429 683 046 steve@landlordinvestmentshow.co.uk

LES HANbURy DIRECTOR

FRAN RObINS

SALES & EVENTS MANAGER T: 0208 656 5075 M: 07950 284 615 fran@landlordinvestmentshow.co.uk

RyAN DENNINGTON SALES & EVENTS MANAGER

T: 0208 656 5075 ryan@landlordinvestmentshow.co.uk

bETH LITTLEWOOD SALES & EVENTS MANAGER

T: 0208 656 5075 beth@landlordinvestmentshow.co.uk

bEVERLEy MELINIOTIS ADVERTISING SALES MANAGER

T: 0208 656 5075 beverley@landlordinvestmentshow.co.uk

CRAIG EDMONDS CREATIVE DESIGNER

T: 0208 656 5075 craig@landlordinvestmentshow.co.uk

NOVEMbER 19TH - LONDON OLyMPIA CONFERENCE CENTRE

IF yOU WOULD LIkE ANy INFORMATION AbOUT OUR 2015 SHOWS, PLEASE GET IN CONTACT WITH A MEMbER OF THE TEAM OR ALTERNATIVELy, VISIT OUR WEbSITE AT: WWW.LANDLORDINVESTMENTSHOW.CO.Uk

November 2015

LANDLORD INVESTOR

T H E U. K ’ S F A S T E S T G R O W I N G P R O P E R T Y R O A D S H O W

A FREE ONE DAY EVENT FOR LANDLORDS & INVESTORS COVERING:

LEGAL SERVICES

TAX ADVICE

THOUSANDS OF LANDLORDS & INVESTORS ATTENDING

INSURANCE

WE HAVE ORGANISED 28+ SHOWS IN JUST TWO YEARS

MORTGAGES

REFERENCING

BUY-TO-LET COMPANIES SHOWCASING THEIR SERVICES

INVESTMENT OPPORTUNITIES

WE BRING OUR EVENTS TO BUY-TO-LET HOT SPOTS

SEMINARS

NETWORK WITH PROPERTY PROFESSIONALS, LANDLORDS & INVESTORS

DEPOSIT SCHEMES

LANDLORD ASSOCIATIONS

SEMINARS DELIVERED BY INDUSTRY EXPERTS

NETWORKING OPPORTUNITIES

ALL ASPECTS OF THE PROPERTY SECTOR COVERED

2016 SHOW LOCATIONS JANUARY GUILFORD SURREY FEBRUARY SLOUGH BERKSHIRE FEBRUARY WEST HAM EAST LONDON MARCH COLCHESTER ESSEX MARCH BRIGHTON SUSSEX APRIL CROYDON SURREY APRIL DARTFORD KENT

MAY MAIDENHEAD BERKSHIRE MAY STEVENAGE HERTFORSHIRE JUNE LONDON OLYMPIA SEPTEMBER MIDLANDS SEPTEMBER NORWICH EAST ANGLIA OCTOBER TBC MANCHESTER NOVEMBER LONDON OLYMPIA

For more information about the shows and how to register your attendance, visit the website or call us on:

0208 656 5075 // WWW.LANDLORDINVESTMENTSHOW.CO.UK Our shows are supported by:

“Connecting Landlords, Investors and Property Professionals”

6

EXPERT ADVICE

AND EVEN MORE RED TAPE? Peter Littlewood Southern Landlords Association

Just as you thought it safe to put your head above the parapet after all the recent legislation, along comes a biggy!

The Housing and Planning Bill 2015 had its first reading in the House on October 13th, and is due to have its second reading on November 2nd.

I will try to summarise those parts that are likely to affect PRS landlords.

November 2015

LANDLORD INVESTOR

Starter Homes During the election, David Cameron announced he intends to build an additional 200,000 starter homes exclusively for first time buyers under the age of 40, for sale at 20% below normal market prices.

This Bill will create a new duty on all local authority planning departments to promote the supply of starter homes in their area, and will also allow the government to set regulations requiring starter homes to be included on residential sites as a condition of securing planning permission.

7

Starter Homes are defined as:

Available to (under 40);

first

time

buyers

only

At least 20% less than market price; To be less than the price cap (£250,000 outside London and £450,000 in London).

Self-Build Following on from existing legislation (Self-build and Custom Housebuilding Act 2015), the main proposal under this Bill on this issue is that Local Authorities will be under a legal duty to grant sufficient 'suitable development permissions' to meet the demand for self-build/custom-build in their areas.

This is in recognition that traditional methods alone won’t supply the 1m+ new homes now needed.

Rogue Landlords and Letting Agents in England At last there is a (small) move in the direction of differentiating between the majority of landlords who try to the right thing and those who won’t do the correct/legal thing, even if they are aware of what they are doing.

Other measures proposed under this are:

A national database of criminal landlords and agents – note that all the London Boroughs have been operating such a database for many years as part of the London Landlords Accreditation Scheme (Llas); Rent Repayment Orders - up to a maximum of 12 months’ rent may have to be repaid if the landlord: 1)

Raises an AST whilst subject to a Banning Order (above) - note however, that any AST granted by a ‘banned’ landlord will remain valid, thus protecting the tenant(s);

2)

Breached HHSRS notices, or Licensing requirements;

3)

4)

Enters the property in a violent way, barred under the Criminal Law Act, 1977; Carries out unlawful eviction prevented by the Protection from Eviction Act 1977.

Additionally the Bill also proposes something the SLA has been seeking for many years, greater use of the First Tier Tribunal (used to be called the Residential Property Tribunal Service – introduced in the 2004 Housing Act).

Under this proposal, the Tribunal will be able to ban a person from:

Letting housing in England; Engaging in letting agency work that relates to housing in England;

Engaging in property management work that relates to housing in England; or

Doing two or more of those things.

LANDLORD INVESTOR November 2015

EXPERT ADVICE

A new dwelling;

If the ban is breached there can be an additional penalty of up to £5,000. Currently it is not described what offences will lead to a Banning Order, but the Bill allows the Secretary of State to ‘describe an offence by reference to the nature of the offence, characteristics of the offender, the place where the offence is committed, the circumstances in which it is committed, the sentencing court or the sentence imposed.’

8

EXPERT ADVICE

Abandoned Premises At last the Government has responded to the lobbying by Landlord and Agent Associations about the difficulty of getting properties back after the tenant has left without telling the landlord.

Whilst many Agents frequently use ‘Abandonment Notices’ they are not lawful, and can cause problems if the tenant should come back to re-claim the tenancy.

Currently, the only legal way to get the property back is via a Section 21, and (probably) a Section 8 followed by a Court Order/Bailiffs visit. A long and expensive business.

The Bill provides that a landlord may follow course to recover possession of a property where it has been abandoned, without the need for a court order. A private landlord will be required to give a tenant notice which brings the tenancy to an end on that day if the tenancy relates to premises in England and certain conditions are met:

A certain amount of rent is unpaid (two months, if monthly, or one quarter);

That the landlord has given a series of

warning notices – note that the Bill will

describe the format of these warning letters;

And that neither the tenant or a named occupier has responded in writing to those warning notices before the date specified in the notices.

November 2015

LANDLORD INVESTOR

This ability to act without the need for a court order follows on the suggestion in the Right to Rent section of another Bill (Immigration Bill 2015-16), where, if the tenant has lost their right to remain in the country, the Home Office can issue appropriate document to allow the landlord to apply for a Bailiffs Order directly – as though they had a High Court order.

Social Housing The main things that might affect non-social landlords are:

Extension of the Right to Buy – to allow more people to leave the rental sector and become home owners; Force the sale of high value vacant Local Authority homes; Allow the Secretary of State to set the level of rent in Social Housing for a high earner – called HIST’s (High Income Social Tenants). Currently to be defined as >£40k in London, and £30k elsewhere.

9

Planning & Compulsory Purchases

Under this section it is proposed:

To further ease planning applications, especially the conversion of a Permission in Principle (PiP) to be converted to full permission.

1)

To amend the definition of a ‘fit person’ allowed to hold a license so that: Applicants should be entitled to remain in the United Kingdom, and

2) 3)

Should not be insolvent or bankrupt;

It is proposed to allow Local Authorities access to the databases held by the various Tenancy Deposit Schemes ‘in order to carry out its functions under Parts 1 to 4 of this Act’. For example ‘where multiple deposits are registered against a single address which does not hold an HMO licence a local housing authority will be able to investigate the property to identify whether any action needs to be taken under Part 2 of the Act.’

Also, failure to comply with duties

concerning the immigration status of

prospective tenants may be taken into account;

To also bring more brownfield sites into use, and make Compulsory Purchases easier.

Comment Whilst the Government is not anti-landlord, this Bill, and the previous proposed Inland Revenue changes indicate that they are substantially pushing towards more home ownership, and if that causes the PRS to stall, then so be it.

We are entering the time when it is even more important for landlords to become professional; know what they are doing; and take a serious look at their financial arrangements. ⌂

This section also allows a new method to calculate leasehold enfranchisements and lease extensions.

LANDLORD INVESTOR November 2015

EXPERT ADVICE

Housing, Estate Agents and Rentcharges

10

EXPERT ADVICE

The Power of the Checklist Tom Entwistle - LandlordZONE

In advanced societies regulations proliferate, and however much a Conservative government promises to roll back "red tape", it seems to make little difference.

Whichever government is in power new regulations just continue to pour out of parliament like water over the Niagara Falls. That’s what Parliament does, it produces new laws, at times it would seem to us outsiders, whether they are needed or not!

The irony is that the last lot of new rules and regulations on letting emanate from an Act of Parliament called the Deregulation Act 2015 - a real contradiction in terms if ever there was one. Prompted by the Lib Dems of the last (Coalition) government, measures to prevent so called “revenge” or retaliatory evictions were tagged on to this Act, which was going through the Lords at the time, along with several other new measures mainly to do with the serving of section 21 notices.

November 2015

LANDLORD INVESTOR

Lettings and "Red Tape" There is no doubt that, as a result of a minority of rogue landlords, the vast majority of responsible landlords will in future have to cope with a whole lot more “red tape”; the new rules and regulations which, if not adhered to exactly, will trip them up if the worst should happen – especially if they need to take their tenant to court.

11

Getting that All Important Proof

I always approach a new tenancy with the end in sight: I plan for the worst but hope for the best. In other words I assume that every tenant I take on will end up having to be evicted; therefore I produce a paper trail of evidence which carries on right through the tenancy.

My point is, without meticulous attention to getting documentary evidence the no fault section 21 eviction process will fail. You probably will never need to use it, but if you do you will so be glad of the evidence, which is just as true today as it was back in the 1980s. In fact, probably more so as with the latest batch of regulations there are far more loopholes a legal savvy tenant or his or her lawyer can use to stymie your attempts at re-possession.

Of course very few tenants end up in court. In my experience, dealing with working and professional tenants over a lifetime of letting, around 5% or onein-twenty will give some sort of serious trouble, with perhaps only a small percentage of these actually ending up in litigation.

However, if you have not planned for it, the chances of succeeding in court are very slim. Judges like rock-solid but concise documentary evidence, all setout in an easily digested format in the Particulars of Claim, backed by an ordered Witness Statement with all the documents tagged, numbered and correctly referenced.

In my early days of letting there was something called a section 20 notice. This was a time when the first Assured Shorthold Tenancies (AST) came in to being, after the passing of the 1988 Housing Act. Landlords were obliged to get the tenant’s agreement to enter into a Shorthold, as opposed to other types of tenancies in existence then with longer security, by having served on them the s20 notice in advance of them signing their agreement.

Judging by the way information percolates down to landlords - there are still some very much in the dark about the deposit regulations which came in in 2007 - let alone the latest batch of rules, which says to me a lot of them will soon get tripped-up in the legal process.

Landlords and agents will really have to get themselves organised in future if they are to avoid trouble, because there’s so much crucial paperwork to deal with when letting a property. When you are faced with a new tenant signing up it’s just so easy to forget something important.

Once they are in the property it’s just too late; getting anything signed by a tenant later can be nigh on impossible. An experienced landlord or agent would never let a tenant into a property without first signing the agreement, paying the first month’s rent and the deposit. Now there’s many more things to think about.

The problem was, proving you had served this notice before they signed the tenancy agreement. Without this proof the tenancy became a standard assured tenancy, with full security of tenure. I simply devised my own form for the tenant to sign, at the time of signing the tenancy agreement, stating that they had seen and agreed the notice prior to signing for the tenancy.

I’m sure there are still a few post 1989 and pre 1996 ASTs around where the landlord is stuck with the tenant because there is no section 20 proof – in which case the no-fault section 21 eviction processes cannot be taken.

LANDLORD INVESTOR November 2015

EXPERT ADVICE

Start off with the End in Sight

12

EXPERT ADVICE

The Humble Checklist That’s where the checklist comes in. Checklists are good for much more than keeping up with your grocery to-do list. You can use them as a way to communicate management processes more concisely and, in the end, as a powerful tool to prevent mistakes.

Specifically, using your checklist as a management communication tool that means you use them to reinforce or change the perceptions of others. For example, if you write out information about something that has to be done, a checklist sends a couple of messages: first, that you're well-organised, telling staff or tenants exactly what’s required, and second that your process is quite rational and robust.

The creation of a checklist, in itself, sends the message that you've given more than cursory attention to the detail and you have got it right. It means that staff and tenants take the message seriously, because you've taken extra trouble to develop it in an orderly way. And, that kind of perception, in turn should make the recipient more willing to follow your instructions.

In a busy world where everyone is under more pressure, regulations mean more detail to comply with, multitasking is everywhere and everything is instant, the potential for inefficiency and mistakes is very high.

You’re constantly checking your emails while scrolling through social media news feeds, and catching up on your favourite TV shows. Consequently, some tasks that we really need to attend to can easily slip our minds.

Do you do tasks that you need to do again and again? If you do, how do you make sure that you do them correctly, or someone you delegate the task to does, every time? The answer without doubt is, use a checklist. When you do something that involves multiple steps, especially when under pressure in some way, it’s very likely that you would forget one or two of them without help.

Since using a checklist means you don’t have to remember all the steps you need to take, you can use your brain power for something more creative, like chatting to your new tenant to reassure him or her, while signing them up. It saves time. You don’t need to spend time remembering the steps, so you can devote the entire time to doing the task. You can also delegate more easily and with confidence.

November 2015

LANDLORD INVESTOR

A checklist needs to be based on the accumulated knowledge of experienced people over a period of time. The checklist is not a substitute for experience but a distillation of it. For example, our Checkin – Check-out Checklist available to download here: www.landlordzone.co.uk/documents - is ideal for making sure that you don’t forget anything important when signing up new tenants. This consists of around 25 individual items in a house and documentation process that needs to be checked off and demonstrated, when signing up a new tenancy; it’s almost impossible to remember them all.

Dr Atul Gawande, a US surgeon, author and management consultant to the NHS is something of a checklist aficionado. He wrote a book about using checklists entitled “The Checklist Manifesto”. His book is full of stories that show how useful checklists are.

In fields as diverse as surgery and hospitals, building construction and aviation – pilots use them every time they fly - the usage of checklists has saved many lives, let alone £millions saved in preventing costly mistakes.

In critical surgical operating conditions you would think that the experience of the surgeon and the operating team would be sufficient for success without the need for checklists, right? Not so. Dr Gawande has proved time and time again in hospitals across America, Europe and where his family roots are in India, the power of checklists; those checklists save lives.

13

To illustrate his point, Dr Gawande tells many real life stories in medicine and other fields. For example the one about the B-17’s first test flight. The year was 1935, and the B-17 plane was the most complex and revolutionary aircraft of its day. That was the problem, as on its maiden voyage the pilot forgot to release a new locking mechanism on the elevator and rudder controls; crashed the plane and two crew members lost their lives. The response, yes, you probably guessed right, a checklist. According to Gawande, the B-17 pilots back in 1935 flew on, and a total of 1.8 million miles later, reported no further incidents.

Nowadays, the modern airline pilot goes through his pre-flight and in-flight routines with the flight computer displaying a checklist of observations to make sure actions are performed. Indeed, improvements in the safety of aviation travel over the last 50 years or so has left many hospitals in catch-up mode. Here checklist management practices still have the potential to produce massive improvement as Dr Gawande constantly argues.

Immigration Checks The checklist will become even more important for landlords and letting agents as the new Right-to-Rent immigration checks are rolled out across the country from the 1st of February. All landlords will be required to carry out these checks and, to avoid accusations of discrimination, all tenants whatever their backgrounds will need to be taken through the same process. What’s more the landlord or agent will need paperwork to prove this was done correctly. That’s where the all-powerful checklist comes in again.

The Digital Alternative One of the advances of the digital age is that you no longer have to remember to take the right paperwork with you. A task management or to-do listing app can substitute for a paper form, but I still think a paper form, filled in with the tenant/s present, and where both parties can sign on completion, is the best solution for lettings management.

Surgery and flying lend themselves to checklists because there is a large element of routine, and of course the consequences of an elementary error can be devastating. To a far lesser degree, the same applies to the lettings and tenant management processes.

So, if you want to improve your tenancy management skills and prevent letting disasters, develop yourself some checklists, or alternatively use some of ours that you can download for free at the link above. ⌂

LANDLORD INVESTOR November 2015

EXPERT ADVICE

He presents impressive evidence on how the use of checklists before medical procedures significantly reduces the incidence of avoidable error – in both advanced US and UK hospitals with higher experienced staff and superb facilities, and in primitive clinics in poor countries.

14

INDUSTRy UPDATE

PROPERTy OMbUDSMAN'S FINAL INTERIM REPORT CALLS FOR PROPERTy AGENTS ACT Christopher Hamer Property Ombudsman

The latest interim report released by The Property Ombudsman reveals more than half of the 9141 enquiries received related to lettings disputes, nearly double that of sales. This not only reinforces the importance of legislation introduced a year ago, making it a legal requirements for all letting agents in England to register with an approved redress scheme, but has left Christopher Hamer, Property Ombudsman, calling for a Property Agents Act. As his 9 year term in office as Property Ombudsman draws to a close, Christopher Hamer has experienced fundamental changes to agent obligations throughout the property sector. However, he believes that current provisions do not go far enough in ensuring openness, disclosure and consistency for agents, tenants and landlords alike.

Mr Hamer explained “A Property Agents Act would update the Estate Agents Act 1979 to reflect developments in the sales market and most relevantly now, bring lettings into a precise framework where all agent activity is covered by one piece of legislation.”

He has suggested licensing of agents, standardised tenancy agreements and compulsory client money protection could all be areas included in such an Act. The figures, published in The Property Ombudsman's 2015 Interim Report, reveal that membership levels have grown by 16% in the first half of the year.

A total of 1,587 complaints (up 34% on the previous year) were resolved covering sales, lettings and other jurisdictions between 1 January and 30 June 2015.

November 2015

LANDLORD INVESTOR

Key highlights from TPO's 2015 Interim Report reveal that:

Registered agents (p6): 3641 additional sales and letting agents registered with TPO. A total of 34,944 agents registered with TPO across all jurisdictions – a 16% increase on the same period last year Consumer enquiries (p7): 9,141 consumers contacted TPO regarding a property dispute (an 8% increase on the same period last year). More than half of all the enquiries received were regarding lettings disputes with 5,303 enquiries logged (58%), nearly double that of sales enquiries which represented 30%.

Complaints (p8): Complaints grew by 34% overall with 1,587 cases reviewed, of which 934 were against letting agents (up 30%) and 596 were against sales agents (up 39%).

Consumer case studies (p9): The Ombudsman hand-picked a selection of both sales and lettings case studies to highlight issues varying from holding deposits, eviction, renewal fees and difficult neighbours, to commission fees and sales particulars.

To view a copy of the Annual Report, please visit: www.tpos.co.uk ⌂

#1

If you are considering letting your property make sure Belvoir is top of your list Letting & managing property in Southampton, Chandler’s Ford & Eastleigh

023 8001 8222

southampton@belvoirlettings.com www.belvoirlettings.com/southampton 36 London Road, Southampton, SO15 2AG Not all Agents are the Same - Experience the Difference Not all Agents are the Same - Experience the Difference

16

London Tomorrow: INDUSTRY UPDATE

Shaping Future Cities Colin Stanbridge

London Chamber of Commerce & Industry

Step outside the shiny new station at Kings Cross / St Pancras and you're greeted with a sea of building sites and new developments.

Kings Cross is just one example of major regeneration areas improving and updating the city. Similar scenes are taking place all over London.

London is awash with cranes. The latest Deloitte Crane Survey reveals that the total level of office construction in central London has increased over the past six months, fuelled by the greatest volume of new space to start since 2011.

November 2015

LANDLORD INVESTOR

And it’s not just offices. London is undergoing its fastest rate of house building since the end of the war.

‘London is a great city to live, work and do business in. It is one of the world’s leading cities with great restaurants, great parks, great jobs and all of the other things that attract you to a place.

London has a growing economy and an exciting, vibrant feel - says Colin Stanbridge, Chief Executive of the London Chamber of Commerce and Industry (LCCI).

Undoubtedly there’s no denying the incredible appeal of London – it has recently been named the best city in the world, beating New York to top spot yet again. After London and New York, Asian cities take the next four spots: Hong Kong is third, Singapore fourth, Tokyo fifth, and Seoul sixth.

17

Despite this London is facing a crisis. The huge cost of living and working in London is threatening the capital’s reputation as the “world’s leading city”, according to a recent LCCI / ComRes poll.

The LCCI initiative - London Tomorrow - reveals that business leaders, politicians and residents see expensive housing, transport and office space as barriers to the city’s success. With a referendum on Britain’s EU membership looming, the poll also showed people believe access to Europe’s open market is critical to London’s future. Colin Stanbridge said: “London is a phenomenal success story, but are we soon to become a victim of our own success? This new research shows that our city is fast becoming an unaffordable place to set up shop and live.”

He added: “We must act quickly to ensure that London’s world-leading reputation isn’t eroded by failures in these fundamental areas. We need to see real commitment from government to address the fundamental issues within the capital that could affect London’s prospects for growth – investment in housing and key transport projects. As London’s population soars, we must address these issues and build on the capital’s success to ensure London continues to be a principle driver of the UK economic recovery.”

Key areas LCCI is calling for action on, include: Maintaining transport funding: With the population of London set to soar to 10 million by 2030, sustained investment in London’s transport infrastructure system is critical to ensure that the capital can continue to function, grow and thrive. With that in mind, the current Transport for London grant from government should be maintained, as it is essential to sustain capital investment in the transport system.

Securing Crossrail 2: As London heads towards megacity status, with a population of 109 million+, it is vital the right infrastructure is in place to realise the potential of that growth in terms of economic output and productivity. 69 per cent of LCCI members believe that Crossrail 2 is vital for London. LCCI calls on government to commit further funding to Crossrail 2 to enter the detailed design phase.

Invest in critical infrastructure: London needs targeted investment in housing and transport to ensure solid productivity and economic success. As more and more Londoners are forced to live further away from the main areas of economic activity due to the chronic under-supply of housing, transport systems must be up to scratch. This needs to be done in a cross-governmental, efficient manner, government must end the ‘silo’ approach.

LANDLORD INVESTOR November 2015

INDUSTRY UPDATE

U.S. cities like San Francisco, Washington D.C., Chicago, and Boston rank among the top 20, along with three Canadian cities: Vancouver, Montreal, and Toronto but they are all some way behind.

18

INDUSTRY UPDATE

Unlocking land to build: LCCI’s report last year – Getting our house in order : the impact of housing undersupply on London Business – found that the undersupply and rising cost of housing in London is having a significant impact on businesses as well as Londoners.

59 per cent of firms reported increased housing costs led to a greater pressure to increase wages. one third of firms believed that lack of affordable housing available near their place of work was affecting employee productivity.

51 per cent of businesses said that lack of local affordable housing was affecting punctuality.

LCCI’s follow-up report in May this year – Unlocking London’s housing potential – recommended that surplus brownfield land across London were utilised to build affordable homes. LCCI welcomed the establishment of the London Land Commission to identify and unlock this land, but has called on government to commit to annual funding of the Commission as part of this Spending Review.

London Chamber of Commerce and Industry argues that the government must ensure that London is not overlooked or left behind in the push to secure roll-out of greater devolution across England. ‘London should have a greater level of tax retention to enable sustained and secure investment in key London projects’ says Sean McKee, Director of Policy at London Chamber of Commerce. ‘LCCI believes a pilot scheme where one or more borough areas are permitted to retain a share of stamp duty should be explored. This could be an important step toward greater fiscal freedom for the capital’.

November 2015

LANDLORD INVESTOR

And it seems there’s overwhelming support – 60 per cent of the public, 56 per cent of businesses and 89 per cent of councillors are in favour according to a recent ComRes poll.

Colin Stanbridge said: “London cannot be left behind in the great push for English devolution. We urge government to remember that devolution is not a zero-sum game, London can gain further freedoms at the same time as other cities or regions across the country. It is not an ‘either/or’ “We believe a fiscal devolution pilot in London would show the huge potential benefits for all the UK that could be gained from greater power over tax and spend in the capital. To really improve our city, to retain our place as the world’s best city, we must invest in not just roads and tubes but schools, homes and digital connectivity. The government and Mayor must make bold decisions to tackle the barriers that have hindered progress in the past’. ⌂ London Tomorrow: Shaping Future Cities is a thought leaders initiative by London Chamber of Commerce and Industry. For a copy of the latest edition of London Tomorrow visit: www.londonchamber.co.uk For any queries regarding membership benefits and services please contact Dean Wade on: dwade@londonchamber.co.uk Tel: 020 7203 1944

Buy-to-let remains ‘an extremely attractive investment option’

T

he appeal of investing in a buy-tolet property remains as strong as ever, according to a new study.

And in many parts of the country, substantial capital growth is an additional likely source of financial return.

Research by PricewaterhouseCoopers (PwC) has found that, despite the government’s decision to reduce mortgage interest tax relief for landlords, there are still plenty of reasons to secure a buy-to-let home.

The buy-to-let market has continued to expand over recent years and is now extremely important to mortgage lenders.

In light of the recent tax relief changes on buy-to-let mortgage interest, some have even started to offer limited company buy-to-let finance products, providing landlords with a more tax-efficient option when it comes to investing in property.

Allison Thompson, lettings director at Leaders said: “Tenant demand remains incredibly high and is expected to continue to rise over the years to come.

This means investors can buy a property safe in the knowledge there is likely to be a ready supply of tenants looking to rent.

Allison Thompson Lettings Director

“

There are many excellent opportunities available to investors in the buy-to-let market

”

“Demand is such that well-presented properties in the right locations let extremely quickly. Void periods are at a 13-year low with the average rental property being occupied for almost 50 weeks each year. Just six per cent of Leaders’ rental properties have been the subject of a void period in the last year, meaning the vast majority of our landlords have enjoyed rental income for at least 12 consecutive months.”

With so many people renting a home, it may come as no surprise to find PwC believes some 25 per cent of all homes in the UK will be tenanted - rather than owned - within the next five years.

High levels of demand can drive rents upwards, helping landlords to enjoy a healthy return on their investment.

Get to know us at leaders.co.uk

“There are many excellent opportunities available to investors in the buy-to-let market - both in terms of properties and mortgages - that offer the potential for greater returns than generated by many other investment types,” says Allison.

“It’s important to secure the right property to meet your personal investment goals and with branches across the UK, each with a team of local experts in house, Leaders are perfectly placed to help investors. From finding the right buy-to-let property through to the collection of rent from a fully vetted tenant and management of the tenancy including property maintenance our branches offer the very best advice and support whilst you profit from property.”

For expert advice on all aspects of buying-to-let or for details of the services on offer, contact your local Leaders branch at leaders.co.uk

20

INDUSTRy SPOTLIGHT

PROPERTy TV:

kEEPING LANDLORDS IN THE PICTURE Michael Hammond - Property TV

THIS MONTH, THE L.I.S TEAM VISITED PROPERTy TV TO FIND OUT WHAT THE FUTURE HOLDS FOR THE U.k'S FIRST PROPERTy DEDICATED CHANNEL.

Landlord Investor Editor and Exhibition Director of the Landlord Investment Show Tracey Hanbury was invited to the studios earlier this month to feature on Property Panorama, a show that acts as a digital platform for property professionals to showcase their services in relation to the latest changes in the property world.

The U.K has a very long list of property shows on television at any given moment. From the casual viewer enjoying programmes such as DIY SOS all the way through to a seasoned professional staying up to date with legislation debates in parliament, the one thing the industry has lacked up until recently, ironically, is a home.

We met the team to discuss how the Landlord Investment Show could help landlords, investors and property professionals as either first time buyers or seasoned professionals in the private rented sector, but also to find out about Michael Hammond, the driving force behind Property TV; the UK's only channel dedicated to property.

November 2015

LANDLORD INVESTOR

21

It took about 3 years of careful planning and preparation and we have certainly experienced our fair share of set backs along the way; but, on June 1st 2015 the channel launched on Sky 238 and subsequently on Sky 272 with a plus two hour service.

To be able to switch on the television and see what you have worked so hard to achieve, is very rewarding.

4. HOW WOULD yOU DESCRIbE THE CHANNEL'S MAIN CONTENT? Without going into too much detail, the company has a three-phase roll out plan.

1. MIkE, yOU ARE THE FOUNDER OF PROPERTy TV. WHAT MOTIVATED yOU TO SET AbOUT THE LAUNCH OF A MAJOR PROJECT LIkE THIS? There were several factors that motivated me to create a television channel about Property.

At the beginning of my journey with Property TV, I soon found out there was a vast amount of information about property that I did not know, further, I wasn’t even aware that this information even existed! This resonated with me, so I set about making this information available on a national scale using national television as my platform.

We have just completed the first phase broadcasting purely entertainment content with the aim of drawing a large national and varied audience to the channel.

The channel currently attracts peaks of approximately 237,000 viewers per day and up to 40,000 views for a single programme.

The company is now moving into phase two of it’s roll out which incorporates education and information into the channel schedule – this is where the channel starts to fulfil the aim I had for it at the beginning, to have a beneficial impact on the nation.

Phase three is to establish the channel as the most up-to-date source of property information in the UK. For it to also become the ‘Must see TV for the Property industry’

I couldn’t believe that it hadn’t been done before!

2. SO WHEN DID IT ALL GET STARTED? I identified the opportunity in my second year of studying law at university. It’s obviously not the usual thing to think about the launch of a new television channel at the same time as studying, but looking back at what the company has achieved – I’m very pleased.

LANDLORD INVESTOR November 2015

INDUSTRy SPOTLIGHT

3. HOW LONG DID IT TAkE TO LAUNCH?

INDUSTRy SPOTLIGHT

22

5. WHAT NEW PROGRAMMES ARE WE LIkELy TO SEE bEING bIRTHED IN THE NEXT FEW MONTHS? I can briefly mention two specific programmes. We are currently filming with a forward thinking London estate agent – Madison Carter; and I can assure you that the programme will not only educate the viewers but also WOW them. The second programme is all about how smart technology is changing our homes. This programme is hosted by Hollyoaks’ star Ben Hull and the sports presenter Charlotte Jackson.

While we are working on a large number of other informative and educational programmes, unfortunately, the nature of the projects means that they are fairly confidential. What I can say is that we are working on titles which feature one of the UK’s leading auctioneers and another involving what I would describe as the one of the UK’s most innovative property developers.

Oh - we are also working on a programme that promises to provide the most up-to-date property information in a ‘Bloomberg’ type format. We have the capability in house to even go ‘live’ with this. I’m personally very excited about this one.

6. WE CAN SEE ALL kINDS OF ENTERTAINMENT PROGRAMMES ON THE CHANNEL, INCLUDING PROGRAMMES WITH SARAH bEENEy AND OLIVER HEATH. WILL PROPERTy TV bE bIRTHING ANy NEW STARS? We will.

What I have discovered is that the property industry is full of fantastic personalities – and I can’t wait to introduce many of these to the Nation. Again, the details are fairly confidential but I can tell you that Steve Coogan will be featuring on the channel very soon. (That’s Steven Coogan of Madison Carter estate agency, not the world famous actor however . . .)

We are also looking for people working in and around the property industry to take the opportunity to increase their profiles – and perhaps even to become future celebrities - by working with us.

7. WHAT CAN WE EXPECT TO SEE THE CHANNEL DOING IN 2016?

Steve Hanbury, Director of Landlord Investment Show with Michael Hammond.

November 2015

LANDLORD INVESTOR

2016 promises to an exciting year for Property TV. By working with world leaders in property information, many of whom we are already in discussions with, it is in 2016 that we plan to achieve our target of providing the most easily obtainable and up-to-date information about the property industry. All I can say is, watch this space! ⌂

Property programmes have a new home on Sky Property TV is the UK’s only television channel dedicated to the world of property, airing on Sky channel 238.

Whether you are currently in the property industry, would like to get into the property industry or simply love property, Property TV is the channel for you.

Property TV provides entertainment, education and up-to date information about the property market, investment and home improvements.

Dream Homes

Would you like to advertise to our millions of viewers?

If you would like your business or brand to be broadcast into the homes of millions of people who have an interest in Property, then look no further. Contact us today.

Entertainment

Information

Education

Sky Channel 238 Tel: 0800 566 86502

Email: info@propertytelevision.tv

24

HMOs

HMO: THE PLANNING AND LICENSING LANDSCAPE Emma Cox, Head of Sales Shawbrook Commercial Bank

HOUSES IN MULTIPLE OCCUPATION (HMOS) HAVE bECOME POPULAR WITH INVESTORS LARGELy bECAUSE OF THE PERCEIVED AbILITy TO ACHIEVE HIGHER RENTAL yIELDS WHEN COMPARED TO STANDARD bUy-TO-LET PROPERTy. However, when considering investing in or converting properties to HMOs, there are a number of important points for investors to consider – particularly across licensing and planning. These two areas of law are unconnected, and compliance with planning does not mean that licensing requirements have been satisfied and vice versa.

November 2015

LANDLORD INVESTOR

LICENSING & THE HOUSING ACT 2004 The primary piece of legislation relating to licensing is the Housing Act 2004. For the purposes of the Housing Act 2004, a HMO is broadly defined as follows: A building or part of a building (i.e. a flat), that: • is occupied by two or more households, and where more than one household shares – or lacks – an amenity, such as a bathroom, toilet or cooking facilities • is occupied by two or more households and is a converted building – but not entirely self-contained flats (whether or not some amenities are shared or lacking) • are converted self-contained flats which have toilet, washing and cooking facilities for the exclusive use of its occupants For the purposes of the Housing Act, a household is defined widely and each family, each single person living on their own, and each couple will be treated as a separate household.

25

So which HMOs need to be licensed?

HMOs

Local housing authorities are responsible for licensing and not all HMOs are automatically required to be licensed. The Housing Act allows for three different types of licensing:

1) Compulsory (required by law) licensing of HMOs for properties that are three or more storeys high, have five or more people in more than one household, and share amenities such as bathrooms, toilets and cooking facilities.

2) Additional licensing of HMOs. This is a discretionary power that each local authority may decide to apply to a particular type of HMO. For example, an individual local authority may decide to extend licensing to buildings of one or two stories.

3) Selective licensing of other residential accommodation.

Properties that are not subject to HMO licensing can be covered under a selective licensing scheme.

Any council may declare that certain areas, for example where there is low demand for housing and/or antisocial behaviour, are appropriate for selective licensing.

Importantly, this form of licensing can cover all forms of privately rented housing, including but not limited to HMOs. As an example, large parts of the London Borough of Newham have a selective licensing scheme in place, meaning that all privately rented accommodation in those areas needs a selective licence. It is therefore important for investors to consider these factors when buying a new investment property and check with the relevant local authority to assess if a selective licensing scheme applies in your area.

Planning When investors are looking to maximise yields on residential property by converting an existing residential property into a HMO, the required planning permission is something to be aware of.

It must be remembered that HMO licensing and planning are not connected. As such, the obtaining of an HMO licence does not mean that the planning system has been complied with.

The planning regime in England and Wales is broadly governed by the Town and Country Planning Act 1990 (TCPA) and associated legislation. In general, the TCPA sets out that any development of property requires planning permission unless it is non-material or permitted by General Permitted Development Orders (GPDO).

At a basic level this means that any change of use of a property or physical work requires planning permission. (Do note, however, that there are other types of statutory consents that may be required for changes of use or physical works to a property and prior professional advice should always be obtained.)

Therefore, when considering converting a residential property into a HMO, careful planning assessment is required. It must also be remembered that even if a change of use is permitted without planning permission, any physical works may need planning permission in their own right.

LANDLORD INVESTOR November 2015

26

HMOs

Planning law categorises the different uses of property into what are called ‘use’ classes and other specialist uses which do not fall into any particular ‘use’ class (called Sui Generis uses). The GPDO includes the following use classes which are relevant to most new HMO conversions from residential dwellings: C3 Dwellinghouses

For the purposes of this article this class includes a normal residential house or flat occupied by a single person, couple or a single family (i.e. relatives).

C4 Houses in Multiple Occupation

Small shared houses occupied by between three and six unrelated individuals, as their only or main residence, who share basic amenities such as a kitchen or bathroom.

Do investors need planning permission to change the use of a C3 residential dwelling to a HMO? The general answer to this is yes, planning permission is needed unless the GPDO allows ‘permitted development’. In the case of HMOs the following are permitted development: -

Change of use from a C3 (dwellinghouse) to a C4 HMO

-

Change of use from a C4 (HMO) to a C3 (dwellinghouse)

It is important to note the following in respect of these permitted development rights:

Sui Generis HMOs Essentially this is any other HMO which doesn’t fit into use class C3 or C4. Most commonly this will be any shared house occupied by seven or more people, as their only or main residence, who share basic amenities.

November 2015

LANDLORD INVESTOR

If the number of occupiers is to be seven or greater then no such permitted development rights exist, as the new use would be considered a Sui Generis HMO as opposed to a C4 HMO Each individual local authority has the ability to remove permitted development rights by what is called an ‘Article IV’ direction

Many local authorities have already passed such directions including in many popular student areas. Therefore it is essential that you ask your legal advisor to make enquiries of the relevant authority to determine whether such a direction is in place

Planning conditions on previously implemented planning consents can have the effect of removing permitted development rights. If so, planning permission would be required.

27

HMOs

As the spotlight continues to shine on the HMO space due to a range of factors such as supply/demand issues across the housing landscape and rising property prices, it is becoming increasingly important for investors to consider this market carefully, perhaps developing experience managing multiple tenants across a portfolio before approaching what is a much more complex asset class. Experience is key, along with tenant demand and careful consideration of the planning and licensing requirements but at the same time, flexibility is something we pride ourselves on as a lender and we will do our utmost to accommodate our investor clients. We are proud to contribute in a significant way to the range of HMO products currently on offer in the market, and we look forward to continuing to support this increasingly important market via our professional broker distribution network. ⌂

BUYING AGENCY

Income generation, capital appreciation and wealth preservation.

SPECIALISTS IN FINDING PROPERTY: - OFF-MARKET - BELOW MARKET VALUE - HIGH YIELDS - EXCELLENT CAPITAL GROWTH - AREAS OF REGENERATION

WWW.DISCOVER-PROPERTY.CO.UK

BENEFITS: - TIME SAVING - LOWER RISK - PROFESSIONAL DUE-DILIGENCE - PROTECTING YOUR BEST INTERESTS - SKILLED NEGOTIATIONS

F O L L O W U S:

020 7118 1108 ENQUIRIES@DISCOVER-PROPERTY.CO.UK 8TH FLOOR, 6 MITRE PASSAGE, GREENWICH, LONDON, SE10 0ER

LANDLORD INVESTOR November 2015

28

INVESTMENT

AGENTS SHOULD SEEk OUT £1.5bN FEE INCOME FROM bUy-TO-LET Martin Wilkinson - Buy2Let.com The founder of the dedicated property investment search portal, Buy2Let.com has today warned that estate agents shying away from buy-to-let in the wake of new Government measures to try and stifle the market are missing out on their share of £1.5bn in fee income.

Martin Wilkinson, who launched the portal this summer, says that despite the chancellor and Bank of England’s attempt to control the private rental and buy-to-let sector, the distinct shortage of homes will continue to drive demand. He commented: “The recent extension of the Bank of England powers on the buy-to-let lending sector, and the reduction of the tax relief for investors are only marginally limiting. AS with other forms of asset investments, the majority of buy-to-let investments are cash purchases – around 70% - and without a robust supply of homes, council housing or adequate affordable housing, the PRS is the only option.

“Estate agents should not be put off by the Government’s attempts to curb the growth of buy-to-let, and in fact, with the assistance of portals like ours, now is a great time for agents to cash in. The sector generates around £100bn in transactions every year, generating typical fees of £1.5bn – that’s the equivalent of £60,000 for every estate agency branch. Furthermore, for agents that offer rental services, there is an option to generate even more income from buy-tolet investors.”

November 2015

LANDLORD INVESTOR

Buy2Let.com is the first portal of its kind to list genuine buy-to-let properties for sale, allowing investors to search and compare properties – which are categorised as vacant, tenanted, and HMOs - by annual yield; something which the owner-occupier property portals cannot offer. Agents and developers already using Buy2Let.com to market their investment properties include Northwood UK, Leaders, Aspen Woolf, Property Frontiers, Walton Robinson, and Stirling Ackroyd, giving them an opportunity to reach the investment market.

Martin Wilkinson continues: “We know that some agents and investors have been put off buy-to-let by these recent changes, but for many landlords, its business as usual. A buoyant rental market is producing some fantastic yields, and rising property prices mean that investors continue to build up equity too, in addition to their rental income. There are actually very few asset classes, including bonds or annuities, which offer the same levels of return as a buy-to-let portfolio, so the sector will continue attract savvy cash investors who are looking for long-term investments with decent returns.” ⌂

Secured loans

Residential mortgages

Nick Jones

Tracey Bailey

Bridging finance

All together now.

Buy-to-let and commercial mortgages Irene Thomas

Chris Baguley

If you liked us as Auction Finance, you’re going to love us as Together.

As a group, we’ve been lending for over 40 years and we’re able to help with bridging finance, residential mortgages, secured loans, commercial and buy-to-let mortgages.

There’s a new name and still the same expert knowledge available in person at auctions up and down the country. Good property doesn’t hang around, so neither will we when it comes to securing your funding. People, not computers make our lending decisions. It’s just common sense.

For fast, flexible auction finance call the auction team on 0161 933 7155 For other products visit togethermoney.com For professional use only.

Together is a trading style of Auction Finance Limited. Auction Finance Limited is registered in England and Wales Company Registration Number 04949929. Registered office address: Lake View, Lakeside, Cheadle, Cheshire SK8 3GW.

Auction finance Scott Hendry

PROPERTY CAPITAL ALLOWANCES ARE THEY TOO GOOD TO BE TRUE? Because in the last 11 months we have been given £203,463,201 worth of properties to work on. We have identified over £31,977,361 in Property Capital Allowances and over £6,162,838 in likely tax savings for owners of Multi-Lets / HMOs / Student Lets and Holiday Lets.

WHO CAN CLAIM? You must be a UK tax payer and be paying tax.

Typically you will receive a rebate against your last 2 years tax, you will offset the Allowances against this year’s tax bill and if there is any excess, carry that forward to mitigate your future tax bills. You will also need your portfolio to be worth at least £250,000 to make it worthwhile.

HOW MUCH CAN YOU CLAIM? The amount of Property Capital Allowances claimable is different for every industry. They range from 10-15% for HMO’s with up to 45% for Care Homes and Hotels. The lettings industry can claim for all the ‘assets’ in the commercial and non-dwelling areas.

WE CAN HELP YOU AND YOUR ACCOUNTANT SAVE TAX at absolutely no risk

NO!

Frequently Asked Questions about claiming Property Capital Allowances • Why haven’t I heard about them?

You are not alone! They have been enshrined in law since 1878. HMRC stated recently that over 90% of commercial property owners had not claimed them.

Are you one of those?

• Surely my Accountant and I will have claimed everything we can?

Unless you have had a survey report by a Capital Allowance expert, usually 12-15 pages, it is unlikely that you have claimed. This is a very specialised area of property tax law and we are here to help.

• Do the tax savings have to be paid back when I sell?

No, they are yours as a right and you are free to use the savings in any way you wish.

• Will it affect the Capital Gains Tax I have to pay?

No, it can’t be used to offset CGT payment but it will help pay the bill.

• Isn’t it all very risky? Will HMRC claim the money back if they investigate my tax affairs?

This has never happened in over 10 years’ experience and we have £1.5 million PI cover for every case. You are never at risk, because we are part of a Chartered Accountant company with a 100% record of success.

We also guarantee our tax advice for 6 years.

• Is it a tax scheme that could be stopped?

Very unlikely as it has been enshrined in law since 1878.

This year the Annual Investment Allowance (AIA) was increased to £500,000 confirming the government support of Capital Allowances.

• How much do you charge?

A small percentage of the Capital Allowances identified after the survey. Our illustrations are a guide to the likely costs and potential savings. Give us a call, you just need to answer five questions for a no obligation illustration.

• Are there any up-front fees?

None whatsoever and no charges if a claim is unsuccessful. Our fees are always paid out of the tax saved.

• Can I claim for HMO’s, multi-lets, student lets now the law has changed?

Yes, but now only for the non-dwelling and communal areas. The usual savings average 10-15% of the original purchase price for HMO’s, with up to 45% for Hotels and Care Homes.

STOP PRESS! At the Landlord Investors Show at Elstree, on the 24th September, we had 43 enquiries at our stand. Everyone was interested in how much tax they could claim and save on their HMO / multi-let properties. Several had other commercial properties, such as shops, pubs and offices. Many were also looking for property tax planning advice.

We have so far identified £580,000 in tax savings for 11 new clients.

HMO Tax What can you claim for HMO’s, student lets, multi-lets and holiday lets?

Here are some recent examples: Total Cost

Capital Allowances

Tax Saved

The lettings industry can claim for all the ‘assets’ in the communal/non-dwelling areas of their letting properties. This is usually 10% 15% of the purchase price and development/ improvement costs.

Mr. T

£136,000

£10,880

£2,176

Mr. M

£331,000

£26,480

£5,561

Mrs. E

£365,000

£35,000

£8,750

Mr. D

£687,000

£63,400

£25,300

Have a look at our website www.hmotax.com to see more examples of actual savings.

These are all net figures after paying our fees, which are a small percentage of the tax saved.

The seven owners featured on this page have received a combined total of £81,842 in tax refunds! Would you like to join them?

LET US HELP YOU NOW!

If there are no savings there are no fees.

Answer just 5 questions and we will send you an illustration of your likely tax savings.

Call Bill Loryman, Sales Director, for an illustration

01327 340408 or 07964 434932 These are all net figures after paying our fees, which are a small percentage of the tax saved. If there are no savings to be made there is no fee.

Mottingham Court Cost: £850,000 Capital Allowances: £80,008 Tax Saved: £16,250 Ingham Drive Cost: £215,000 Capital Allowances: £45,843 Tax Saved: £9,655

Goldstone Villas Cost: £565,000 Capital Allowances: £71,017 Tax Saved: £14,150

PS: We have already submitted an actual claim to HMRC for £48,250 for the first visitor to our stand at Elstree! He had 5 HMO’s valued at £1,229,000.

A specialist Property Tax Service for the lettings industry investor

www.hmotax.com

32

INVESTMENT

WHAT DOES IT REALLy TAkE FOR yOU TO bE A SUCCESSFUL PROPERTy INVESTOR? Simon Zutshi property investors network Before you read this article I would like to invite you to watch 5 truly inspirational video case studies of just what can be achieved with your property investing.

You can watch these videos here: www.SuccessfulPropertyInvesting.co.uk

IN THIS ARTICLE, I AM GOING TO SHARE WITH yOU WHAT IT REALLy TAkES TO ACHIEVE THIS kIND OF INCREDIbLE SUCCESS IN A RELATIVELy SHORT PERIOD OF TIME, AND GIVE yOU SOME PRACTICAL TIPS OF WHAT yOU CAN DO. November 2015

LANDLORD INVESTOR

THE 3 kEyS TO SUCCESS If you want to be successful there are three key elements, which you need to have in place as follows:

1)

Specialist Knowledge: You need to know what to do and how to successfully invest. The good news is that there is so much information readily available nowadays, that there is no excuse for you not knowing what to do.

2)

Mindset: Knowledge alone is not enough. You also need to take action with this knowledge. This is where mindset comes in. Mindset relates to Attitude, Belief and Courage. The positive “can do” attitude that there is always a way. Looking for the solution

33

3)

Support: Property investing can be a lonely journey but it does not have to be like that. If you can get a group of like minded people; to share your journey with you, to be there to celebrate your highs, and pick you up when you are low, then you will not only be more successful but you will also enjoy the journey far more. I am certain this is one of the main reasons why people on the Property Mastermind are so successful due to the abundant team spirit, sense of family community and the shared journey.

Conversely, the lack of a supportive environment is one of the biggest things that holds most investors back.

You need all three of these elements in place to be really successful. If you are not currently getting the result you want from your property investing, it may be well worth considering which of these elements you are lacking so that you can do something about filling the gap.

It's not just about hard work Why do some people seem to put in lots of hard work but fail to get the results they want? I meet plenty of people at property networking meetings who appear to be taking lots of action and doing lots of things but are failing to get results. Now don’t get me wrong, I am not saying property investing is easy, far from it. You definitely need to put in some time and effort but this needs to be focused effort. Rather than working HARD you need to work SMART. Let me show you what I mean by way of an example: Someone who is working really HARD may go and visit 100 properties with estate agents and make low offers on all of them in the hope of finding a few motivated sellers who may be willing to accept a low offer. Whilst this strategy does work, it is hard work and in reality, most investors will give up long before they get to do 100 viewings. A SMART way would be to look for sellers whose circumstances are such that they may be open to a BMV offer. Out of every 4 or 5 motivated sellers you find you may end up buying 1 or 2 properties. That is a much better use of your time.

Value your time Time is your most valuable asset and yet most investors use their own time to save money. Time is precious. You can always earn more money but you can’t get any more time. We all have the same 24 hours in a day and so you can only do so much yourself. The really successful investors recognise that there are many things that they can get other people to do which means that they can focus on the tasks, which add the most value. This is all about mindset and valuing your time.

I remember in the year 2000, I was renovating a property for a flip, whilst I was still working full time at Cadbury as a senior manager. At that time I did not really understand about valuing my time. I thought that I could save money by doing some of the work myself. I am not very good at DIY and so I usually get other people to do all of those kind of jobs but I can paint and so I thought rather than pay a decorator, I could paint the house myself. It took me about two weeks of evenings and weekends but I saved about £500. At the time I was happy with that and I make £10k on the flip.

With hindsight this was not a very good idea. Instead of focusing on saving money by painting the property myself, I should have invested that time in finding the next deal that could make me another £10k instead of saving £500. This would have been a far better use of my time. So the question is are you valuing your time?

I meet many people who want to benefit from investing in property but don’t want to spend any money on their own education. Because they are focusing on saving money, they try to learn for free or low cost by listening to webinars, reading books etc. This all works but it takes up valuable time. It is far better to attend a seminar and get the right information condensed into a short space of time.

You need to pick the right training course for you and also make sure that there is some sort of money back guarantee to ensure you get the quality training that your were promised.

You don’t have to be a full time investor to achieve fantastic results. Many of our top performers on the Property Mastermind have full time jobs or run their own businesses and so they only have 8 to 10 hours a week to apply what we teach them. However, due to this limited time it forces them to focus and do the most important things, which is why they get great results.

LANDLORD INVESTOR November 2015

INVESTMENT

instead of focusing on the problem, which is what most people do. The belief of what can be achieved and what you could personally achieve. That is why you need to watch the inspirational case studies to build your belief of what can be achieved and develop the courage to step out of your comfort zone and do things you know you should do but really don’t want to do.

34

INVESTMENT

Because this is a residential course it means you can experience the supportive environment, connections and relationships that you will build when you are on the Property Mastermind. This means you will be in a great position to decide if The Property Mastermind Programme is perfect for you, or not before you commit to invest in yourself.

bE PERSISTENT A few years ago my partner Jo and I met up with Kim and Robert Kiyosaki in London and we were able to spend some time with them. I asked Robert if there was one piece of advice that I could share with my students. He said ”Simon, that’s easy. Be persistent.

Most people give up too easily. Often just before they get the results they want”. This was excellent advice from Robert. All of the people whom you watched on those inspirational case studies, had challenges, problems and at times thought about giving up.

But they didn’t. They tapped into the support and resources around them and kept doing it. They had the belief that they could achieve what they wanted because others around them were also achieving incredible results. The only way you will fail is if you give up!

COULD THE PROPERTy MASTERMIND bE RIGHT FOR yOU? Unfortunately you can’t just pay to come on the Property Mastermind Programme. We have a proven track record of fantastic results achieved by our delegates over the last 8 years and we are very keen to maintain that impressive record. This means that we want to make sure that the Property Mastermind Programme is right for you and that you are right for it.

We encourage people to attend my 3 day Advanced Mastermind Accelerator Workshop where they get to learn all of the strategies we teach on the full Property Mastermind Programme and get to know me to see if they like my teaching style. We also get to know the delegates and decide if they will benefit from and contribute to our Property Mastermind community.

November 2015

LANDLORD INVESTOR

It is worth mentioning that there is a full money back guarantee on this three day seminar. We take away any risk of you attending our training. If for any reason you are not happy, or even if you love the training but decide it is just not right for you, then all you need to do is return all of the training materials to us by half way through the training, and we will happily issue you with a full refund. I believe that is very fair, as this makes sure we always deliver what we promise.

yOUR NEXT STEPS If you are interested in joining the Property Mastermind Programme you can find out more information by registering your interest here www.

Property-Mastermind.com We limit the number of participants on each Property Mastermind Programme and they always sell out.

The next available programme starts in February then April, and October next year.

There is a Three Day Mastermind Accelerator Programme this month (November 2015) and one in early February 2016. If you would like to find out more about this you should call us during office hours on 0121 228 2223. ⌂

Now available on amazon.co.uk

36

PREMIER PORTFOLIO EDUCATION: INVESTMENT

kNOWLEDGE IS kEy

Kam Dovedi Premier Portfolio Education Are you new to property and finding it hard to gain clarity on which route to go? Are you looking to take your portfolio to the next level? Is a lack of funds stopping you from taking the next step?

Knowledge is key to getting these answers. Property is a tried and tested investment that has created extreme wealth for so many people. Just look at the Entrepreneurs in the Rich list. Richard Branson, Alan Sugar, Sir James Dyson, what do they all have in common? They all have significant investment in Property.

Do you think you don't have the time? You can learn how to start in property in your spare time. Do you think you need funds? We can show you strategies that need little or no funds.

Take the first step and download this Ebook worth £47, for you it’s absolutely free.

Kam Dovedi is the Founder of Premier Property Education and has been investing in property for over 26 years. Kam’s multimillion pound property portfolio has been created by using a number of different strategies which you can learn too. Kam now shares his knowledge and experience with new investors and experienced investors who need to take it to the next level.

At Premier Property Education we provide a range of interactive workshops, trainings and private mentorship programmes to give you the knowledge, support and guidance to accelerate your success in property.

We have a step by step process that allows you to effectively implement the relevant strategies that are working in the market right. Knowledge is Key If you don’t have the correct knowledge then mistakes in property can cost you significant amounts of money. If you do have the knowledge and use the tried and tested step by step processes then rewards in Property are only limited by your imagination.

November 2015

LANDLORD INVESTOR

Download this free E-book now at: www.premierpropertyeducation.co.uk Discover How to Fast-track your property success by avoiding these pitfalls so you save £10,000’s Learn the proven 3 step formula to successfully invest in property with peace of mind and confidence.

How to replace your income so you no longer need to work and you can spend that time doing what you love. ⌂

37

IDEAS EXPERTISE

Right-to-Rent Checking Service Safeguarding landlords from facing a £3k fine and five years in prison

ü Zero liability for landlords and estate agents ü Free access to our immigration helpline ü Guaranteed compliance with the Immigration Act ü 20% off your first ten right-to-rent tenant checks ü Instant turnaround – no delay on tenancy ü Right-to-rent certificate Protect yourself today

0843 357 2282 info@nslchecking.co.uk

TRADE SALES

One of the Leading Suppliers of Beds & Mattresses with

FREE FAST DELIVERY ACROSS THE UK We can supply you and your business with; • Mattresses • Bed Frames • Divans • Pillows & more

With our es, Special Siz & m to s u C fident we are con h ply You wit we can sup a t a ou need the beds y n’t

ca price that ! te be bea n

With FREE Next Day Delivery * no matter how many mattresses or beds you need!

Call Us NOW for our Best Offers on: 0800 5677625 View our massive range online at: www.mattressman.co.uk/contract * Orders over £45 qualify for FREE NEXT DAY DELIVERY made before 4pm Monday to Thursday.

LANDLORD INVESTOR November 2015

38

LETTINGS & MANAGEMENT

Landlords going the Whole 9 Yards Alan Blockley CEO and Founder of 9yds Here at 9yds we provide only one service for landlords, the purpose of which is successful tenancies.

Successful for the landlord and successful for the person who calls your property ‘home’. For the fundamentals of good tenancies our 9 hallmarks are as good a checklist as any. So what is our recipe for successful tenancies?

2. Access to the Portals 1. Rent and Legal Warranty There are some alarming statistics out there regarding the numbers of tenancies that fall into arrears and the amounts owed to landlords.

Most landlords are in the business for the medium to long term, so, over time, statistically you will take a hit. Portfolio owners and professional landlords would not dream of letting properties without taking out good Rent and Legal Protection and you should also do the same. The Rent part is obvious, but what you only realise when it hurts are the costs and time taken in evicting a tenant (typically 5 months) so look closely at the Legal expense cover.

Take a policy with upwards of £40k in cover and without an excess, good ones should cost between £8 and £12 a month retail but more if you buy through an agent.

November 2015

LANDLORD INVESTOR

Rightmove and Zoopla properties command higher rents than the classified ads. If you look at adverts in the classifieds compared to those on the portals, the professionalism of the descriptions and the photos are head and shoulders above the classifieds making those adverts more appealing to potential tenants.

There are a wide variety of ways to get your ad on the portals without using a traditional high street letting agent and it can be achieved cheaply (we can list your property today with no costs up front).

Consider the rent you will achieve using this medium and look at the costs involved, it will soon pay back, even for the shortest tenancy. While you are looking, take note of how the adverts are presented and photographed and take the tips from the pros to market your property in the best possible light.

My top tip would be that adverts leading with a good photo of the kitchen get a higher click through rate than any other type of photo – first impressions count.

39

A typical 12 month tenancy agreement is a contract worth thousands of pounds to you so it’s important to get it right.

Firstly, make sure you know what you need and be prepared to pay for a good one; apart from the AST, there are different agreements for companies or if you live in the same building. My steer would be not to go longer than 12 months since so much can change in this time. Make the payments monthly and be careful when taking lump sums in advance – the rules are different.

3. Inventory I never cease to be amazed at the time and trouble some Landlords take to make their properties beautiful and then rent them without a proper inventory.

The inventory is the only way you can make a formal claim on the deposit for any repairs.

On average UK rents and assuming a month’s deposit – the inventory is potentially worth upwards of £900 to you. Either do it yourself using a recognised template or app, or get a professional inventory produced. They start at about £60 which may sound pricey but they take a couple of hours to prepare properly. To find inventory providers use the Association of Professional Inventory Providers website (www.apip.org.uk).

4. Deposit Management Over the last few years we have all become very aware of our obligations to comply with the deposit registration rules.

A great tip; if you live outside England and Wales and are renting there, do not use that address on the tenancy agreement as your rent may not be enforceable.

6. Tenant Check and Reference Be clear on what you are looking for and screen potential tenants on the telephone to avoid wasting anyone’s time. Find out their name and address, check for the things that may matter to you; pets, smoking, employment status and earnings and find out why they are moving.

If you agree to meet, be aware of your own security and at the very least give someone the details of the time and meeting. The chances are that you will only have a brief meeting with any potential tenants, so, likeable as they are, do follow it up with a full reference, not just a credit check.

This toughened up in June this year with the introduction of fines for not registering deposits, equivalent to three times the deposit. There are three government schemes, all are straightforward and as long as you comply with the step by step process it should not cause any issues.

The most common trap is not issuing the prescribed information correctly. If you get this and the inventory right, all you need to complete the triangle is a good tenancy agreement.

LANDLORD INVESTOR November 2015

LETTINGS & MANAGEMENT

5. Tenancy Agreement

LETTINGS & MANAGEMENT

40

7. DIRECT RELATIONSHIPS

9. PROFESSIONAL ADVICE

The relationship you build with your tenant is important. Before the tenancy starts, get the relationship off on the right footing by making sure you document everything that has been agreed and ensuring you have an audit trail to back this up.

I have saved the big one until last. Legislation and regulation is fast moving; in the industry we struggle to keep up, as a private landlord it is even harder. Current issues where we receive a lot of questions are: rent arrears, eviction and deposit disputes (these never go away), Section 21, Carbon Monoxide, Immigration checks and increasingly, the impact of the tax relief reduction coming in over the next few years.

A lot of disputes can be avoided by simply writing down the key points of any conversations and passing them on. Your tenant will be paying you thousands for their new home, why not leave a bottle of wine and a ‘Welcome to your new home’ card? It will go a long way in the event of issues arising later.

8. PROPERTy MANAGEMENT It may not seem like it but you are running a business. Keep books and be aware of your key dates, for example rent due dates, Gas Safety renewals or notice periods on the tenancy. Establish and use trusted contractors for any works and again, ensure you record these in your books. You will need to add these details at the end of the year to your self assessment.

November 2015

LANDLORD INVESTOR

Do stay active with organisations like the National Landlords Association who do everything they can to keep their members informed and up to date.

Of course, there is an alternative. The nine points above are all fully included in our annual membership even the Rent and Legal Protection, for a cost of £350 for new tenancies and £150 for renewals.

Call 9yds on 0333 006 3000 or visit us at www.9yds.co.uk

⌂

41

LANDLORDS GUARANTEED market rent for your property for up to 5 years – UK WIDE BENEFITS TO YOU • No voids • Guaranteed monthly payment • Property maintained and managed by us HASSLE – FREE SOLUTION FOR YOU Call Dave on 07412 487926 www.fastcompletion.com

Fed up with your tenants complaining about condensation, mould and ‘damp’?

Lost money re-decorating your properties?

Lost income from your tenants who move?

IF yOU WOULD LIkE TO PROMOTE yOUR COMPANy TO THOUSANDS OF LANDLORDS, INVESTORS AND PROPERTy PROFESSIONALS

by UTILISING THIS SPACE,

PLEASE CONTACT OUR ADVERTISING MANAGER bEVERLEy by: EMAILING: bEVERLEy@LANDLORDINVESTMENTSHOW.CO.Uk OR CALLING: 0208 240 4470 OR 0208 656 5075

Concerned about a visit from the environmental health officer?

We’ll ensure you don’t get complaints from your tenants this winter and safeguard your investment. EnviroVent have helped thousands of households cure condensation and mould...AND have even saved them money.

Call now quoting FREE advice with your local Specialist Ventilation Advisor.

LANDLORD INVESTOR November 2015

42

LETTINGS & MANAGEMENT

Landlords, do you need a new lettings agent?

Nick Gill - Intus Lettings

The buy-to-let market is thriving.

Known for its low housing supply and high demand, the UK’s rental market has become inundated with investors seeking to capitalise on the rising demand for rental housing and the excellent yields that rental property offers. UK buy-to-let has therefore inevitably grown from strength to strength in recent years, as more and more investors gained faith in a burgeoning and highly lucrative market. So it is no surprise that there are now over 1.6 million property investors in the UK alone, who on average own three buy-tolet properties apiece.

The rental market is growing at an incredible rate and, because of this growth, is changing beyond recognition. Gone are the days of tired, run-down buy-to-let properties and hands-on landlords.

Now, more and more landlords are looking to lettings agents to manage their properties on their behalf, as modern property investors increasingly have neither the expertise nor time to commit to managing their investment on a full-time basis.

November 2015

LANDLORD INVESTOR

Being a landlord involves a multitude of timeconsuming tasks, from attracting tenants and drafting tenancy agreements to collecting rent and carrying out regular maintenance on the property, so many investors naturally see property management as tiresome and laborious. If this is the case, utilising the assistance of a lettings agent is a natural progression in the lifecycle of your property investment.

It has been said that finding the perfect lettings agent is pivotal to the smooth running of your investment. A trustworthy company contracted to maintain your property on your behalf will ensure that you can make the most of the excellent financial returns that your property investment will yield, but without having to deal with the fineprint involved in being a hands-on landlord.

One such lettings company is Intus Lettings, a new independent lettings and management company that specialises in student and residential lettings.

As one of the few lettings agents in the UK that offer complete coverage nationwide, Intus offers a comprehensive service on either a let-only or fully-managed basis. Intus Lettings’ easy and

43

If Intus Lettings sound like the perfect agent for you, speak to one of the team and discover how you can save up to £700 on your lettings fees, including 6 months’ free management and your first month’s let free. ⌂

The level of service provided by Intus is firstrate. Their let-only service guarantees the quick and effortless process of sourcing, securing and fully referencing a tenant in the quickest possible time-frame, whereas their comprehensive fullymanaged service involves the full maintenance of a property, from the on-going management and regular inspections of the property, to contracting out any maintenance issues and organising rent collection. Intus Lettings’ main focus is to provide a service that is both high-quality and as easy and hassle-free for the landlord as possible.

Banner Advert for landlord zone W190mm x H130mm D2.ai

C

M

Y

CM

MY

2

12/11/2015

16:57

Guaranteed income for Landords No fees or commission Fully managed or non managed options available Incentives paid

CY

CMY

K

Over

800 properties are already on our books. Are you missing out? *Guaranteed income available through our fully managed service only

To find out more call 020 8547 5491 or email lettings@kingston.gov.uk

LANDLORD INVESTOR November 2015

LETTINGS & MANAGEMENT

straightforward service means that they take the hassle out of sourcing a tenant and maintaining the management of your property. Each property in Intus’ expansive property portfolio is individually managed, with a presence on Rightmove, Zoopla and Gumtree to ensure that the process of sourcing a tenant is quick, easy and efficient, minimising landlords’ void periods.

LETTINGS & MANAGEMENT

44

Time to shed a tear for the demise of the High Street Agent? easyProperty

The advent of online agents and the availability of more affordable services are seriously threatening the future of highstreet letting agencies.

With some agents charging as much as 17% +VAT for a relatively simple service, it comes as no surprise that a good portion of the British public believe they will be completely extinct in 10 years.

November 2015

LANDLORD INVESTOR

Will you be Mourning the end of high agency fees? easyProperty recently staged a tongue-in-cheek response to the predicted fall of high-street agents.

As part of a new breed of online estate agents, they ‘mourned’ this imminent loss with a funeral procession through Central London.

45

Advertising Feature

While some traditional agents saw this procession as merely a stunt, it struck a chord with property owners, landlords and tenants who believe that the industry is in serious need of change.

Most believe the fees they charge are a ‘rip off’ The demise of the high street agent has been predicted by a future trends survey which polled over 1,500 Brits. Almost 75% of those surveyed feel that traditional agency model is in serious decline.

In the same survey, 34% of people think dedicated fishmongers will be gone within 10 years, 31% believe greengrocers will be a thing of the past, and 14% of people predict that posts offices will go the way of the dodo.

The results of the poll, however, must be most alarming for traditional high-street agents. When asked, 60% of people said they would not be surprised to see the end of traditional agents with high street branches and branded cars.

With letting agents charging up to 17% to let a residential property (plus VAT and additional charges hidden within the small print) they will struggle to compete with newer agencies that are able to charge significantly lower fees for comparable services. easyProperty CEO and co-founder, Rob Ellice had this to say about the fees of traditional high-street estate agents: “Consumer behaviour has changed.

No one walks into an estate agent’s office to start their search for a property any more. With traditional estate agents, you are still paying for their high street offices, a fleet of branded cars and cafes – even if you don’t want these services.

“Our platform recognises the digital shift that has taken place across the consumer landscape and our agents have all the local knowledge required for valuations and the sales process at their fingertips. The success of our model will wipe out overpriced high-street agents as consumers cotton on to what a rip-off commission-based fees are.” ⌂ Find out more about easyProperty’s lettings services for landlords at easyProperty.com or call the team on 020 3096 5412.

When asked why, 87% said their services and expertise were simply no longer needed in the internet age, and most believe the fees they charge are a ‘rip off’.

LANDLORD INVESTOR November 2015

LETTINGS & MANAGEMENT

Making their way through iconic locations like Piccadilly Circus, Trafalgar Square and Mayfair before ending in the shadow of the London Eye, the gathered ‘mourners’ carried early-90s mobile phones and were draped in gaudy power suits. Along with their orange wreaths, they brandished ‘For Sale’ signs lamenting the death of the fat fees previously enjoyed by estate agents.

46

LANDLORD INSURANCE

Do your tenants work from home?

Steve Cox - Alan Boswell Group Steve Cox, Property Insurance expert from Alan Boswell Group, discusses what constitutes ‘working from home’ and what impacts it can have upon landlords.

The mobility and flexibility offered by advancements in technology have made working from home far more possible.

With faster internet access, improved security, mobile devices and remote conferencing available, it is estimated that around one in four people now carry out some of their work from where they live. If your tenants have a job where working from home is undertaken this can have repercussions on you as a landlord.

November 2015

LANDLORD INVESTOR

What it means for landlords If you are forced to give a tenant a Business Tenancy, as stipulated in Part 2 of the Landlord and Tenant Act 1954, this can, in certain circumstances, give a tenant a right to a renewal tenancy upon expiry of their term, effectively giving a tenancy for life.

Recent legislation changes have now helped landlords and tenants with this problem.

47

It may seem obvious on what constitutes working from home, however the activity involved can vary widely and can be viewed differently in the eyes of the law. Some examples may include, the tenant:

1. Occasionally bringing work home from the office.

2. Constantly being on the road and bringing back paperwork to do at home – using it as a base but not a registered business.

3. Working remotely.

4. Using the property to run a sole trading business.

5. Having employees or partners and customers or

Home business tenancy The Small Business, Enterprise and Employment Act now allows a landlord to grant a ‘Home Business Tenancy’ and prevents a tenant from gaining a lifelong tenancy. This applies to any new Home Business Tenancy granted from the 1 October 2015 in England and Wales except: A tenancy which is entered into on or after 1 October 2015, pursuant to a contract made before that day; or A periodic tenancy which arises at the end of the term where the original tenancy was before 1 October 2015 (where the tenancy is an assured shorthold tenancy).

What qualifies as Business Use? By law a Residential Tenancy and a Commercial Tenancy are viewed differently. If your tenant is intending on using the property for business use there are legal permissions and financial implications, such as business rates, that apply. Therefore a general Residential Tenancy Agreement is not sufficient. As a landlord you need to provide the correct Tenancy Agreement. A Commercial Tenancy Agreement also impacts the cover provided for the property under an insurance policy. The added risks involved of running a commercial enterprise means that a standard insurance policy does not provide sufficient cover. But what qualifies as commercial use?

deliveries coming to the address.

6. Running a full business like a nursery, hairdressers or renting the property out as a holiday stay.

In the first two examples tenants qualify for a Residential Tenancy. Points five and six are classed as businesses use – but what do examples three and four qualify as?

Assured Tenancy Agreements The majority of Assured Tenancy Agreements include clauses that prevent some uses, and may be worded similarly to: "Not to receive paying guests or carry on or permit to be carried on any business, trade or profession on or from the property."

Depending on the nature of the business the tenant is running they may be legally liable to obtain planning permission and pay business rates. Without this, not only will they be breaking their Tenancy Agreement but your insurance may also be void as business activity is not permitted under a standard insurance policy.

If a tenant is running a small freelance company using one bedroom and the activity doesn’t attract any customers, traffic, dust or smells it is likely planning permission isn’t required. Each situation should be judged independently and it may be prudent to seek legal advice to determine if the property should be classed for business use. If so contact your insurer to discuss what implications this has upon your insurance. ⌂ For more information contact Steve Cox on 01603 218031, scox@alanboswell.com or visit alanboswell.com/landlords LANDLORD INVESTOR November 2015

LANDLORD INSURANCE

Definition of working from home

48

Retaliation Eviction: LEGAL

Can the Councils Cope?

Paul Shamplina - Landlord Action Since Thursday 1st October, as part of The Deregulation Act 2015, a whole range of changes came into force which affect whether or not a landlord can serve a Section 21 notice on an assured shorthold tenancy (in England) as well as changes to the form itself.

Following lengthy consultation, leading tenant eviction firm, Landlord Action, has raised concerns that not enough has been done to inform landlords of the changes and questions whether the Government has enough resources in place to properly enforce measures against so-called ‘retaliation eviction.

Just some of the key changes which come into effect for new tenancies entered into from 1st October, include the use of the new prescribed Section 21 notice which combines fixed term and periodic. A section 21 notice can no longer be served in the first four months of a tenancy and a section 21 notice will now have a 6 month life span.

Despite recognising that the changes are in response to the ever growing private rental sector and a need for best practice, Paul Shamplina, Founder of Landlord Action has expressed several concerns over the changes, commenting:

November 2015

LANDLORD INVESTOR

“There have been a lot of significant changes in a short amount of time and I would like to have seen the Government proportion a greater budget to educating landlords, particularly those that don’t use agents to manage their properties, to ensure they are up to speed with new legislation. We still receive calls to our advice line on a weekly basis from landlords who don’t know about the deposit scheme which came into effect 8 years ago.”

Less than twelve months ago, Paul Shamplina sat before The All Party Parliamentary Group for the Private Rented Sector at the Houses of Parliament arguing against a law on retaliation eviction. With just a small minority of rogue landlords guilty of such tactics, Shamplina maintained tenants could abuse the system and use it to remain in properties rent free for longer.

49

LEGAL

As part of the Deregulation Act 2015, tenants will now have the first four months of a tenancy to file a complaint to a landlord with regards to issues of disrepair. Shamplina adds “Good landlords will deal with complaints within the given 14 days, but my concern is the level of resource the local authorities have in place to action environmental health officers to carry out inspections when staffing levels have been cut to the bone. Landlords’ circumstances can change and if they need to end their tenancy, but can’t because they are waiting for an inspection or to gain access from the tenant, landlords are going to lose valuable time.”

If a property is considered in disrepair, landlords are unable to serve a section 21 notice for 6 months from the date an improvement notice is served by the council.

“I think this could lead to a huge spike in complaints from tenants. I am a bit fed up of all the frequent landlord bashing. It is about time there were more positive statements for landlords in the Private Rented Sector which now stands at approximately 19% of the housing market” concludes Paul. ⌂

LANDLORD INVESTOR November 2015

50

LEGAL

Change in anti-money laundering legislation is crucial for London market

Andrew Ellinas - Sandfords

Despite having tight controls in place to prevent them being used for money laundering, Sandfords, a Central and North West London agent, are urging the National Association of Estate Agents (NAEA) to lobby the government immediately in order to bring about a fundamental change in the current anti-money laundering legislation, with regards to sub agent due diligence, which will support London agents in their everyday business.

HM Revenue and Customs (HMRC) took over supervision of the estate agency business last year and have since published guidance on how to stay on the right side of money laundering regulations.

According to Andrew Ellinas, Director of Sandfords, there is actually a lack of understanding from HMRC as well as the government about the way in which the London market works.

He says: The current legislation doesn’t allow for agents in London to carry out their daily working routine and the NAEA need to speak up and apply pressure on the government before agents are heavily penalised for simply doing their job. We understand what is required of us and of our responsibilities, but there is an issue when it comes to sub agent due diligence, checking vendors are who they say they are. In London we work closely with other agents. One agent might find a buyer for a property marketed by another agent. If agreed, they can sell the property for a percentage of the commission fee.

November 2015

LANDLORD INVESTOR

As it currently stands, not only would the principal agent have to undertake due diligence against the vendor but also the sub agent, which is near on impossible.”

The legislation states that an agent must undertake customer (vendor) due diligence when establishing a business relationship. “The principal agent begins a relationship with a vendor and so should indentify and verify their identity. The legislation needs to be changed by the government and enforced by HMRC to allow for this information to be passed on to the sub agent if sold via this method of business, rather than having to do it all again.” Says Andrew.

51

LEGAL

There are many agents and property professionals in support of Andrew’s view who also believe that this legislation has a loop hole. Andrew concludes: “After attending NAEA master classes on this exact subject and speaking with industry experts, nobody has any clear view on how an agent is supposed to act, and the reason being is that HMRC don’t understand the intricacy of the London market. Agents work together and the government need to take this into account as the situation is currently unworkable. Agents will fall foul of the legislation when carrying out straight forward business and this is a huge issue. Whilst the industry appreciates that all agents need to take responsibility and know who they are working for, the NAEA need to be talking to government bodies to ensure agents are protected and aren’t getting fined for going about their normal business.” ⌂

If it matters to you, it matters to us We are committed to supporting our clients with all leasehold property matters and are proud of the outstanding reputation and knowledge of our team of legal professionals.

We can assist you with a full range of legal services including:

Please contact Mark Chick’s team for an initial discussion:

• Landlord and Tenant • Extending your lease • Buying your freehold • Right to Manage • Commercial Property • Residential Property

T: (+44) 020 7631 4141 E: leasehold@bishopandsewell.co.uk Mark Chick Partner and ALEP Director

Bishop & Sewell LLP 59-60 Russell Square, London, WC1B 4HP

www.bishopandsewell.co.uk

LANDLORD INVESTOR November 2015

54

Southampton: TAX ADVICE

TAX strategy David Humphreys Property Investor Online

My articles for the September & October Landlord Investor Magazine were about my NMLI-TFR Strategy because I believe NMLI-TFR provides the best and safest return for investors, regardless of the size of their cash pot or their investment location.

The two acronyms, NMLI & TFR, stand for No Money Left In & Tax Free Rent.

Both, independently, are relatively easy to achieve, but to regularly achieve both in the same deal requires a high degree of experience and attention to detail.

The September & October Articles were about NMLI-TFR in general terms and were based on my experience in operating this Strategy, principally in Wandsworth, County Durham, M60 corridor & South Wales, but I'm advised by the Landlord Investor Show promoters that the substantial majority of Landlord Investor Magazine readers are certainly based and probably invest in locations close to Show venues.

November 2015

LANDLORD INVESTOR

Therefore, starting with this issue, future NMLI-TFR articles will look at where it is possible to operate this Strategy within a one-hour drive of the next Show venues, and there are 15 through 2016, mostly in and around London/South East England, but including the Midlands & Manchester, where the complete Strategy can be operated very easily.

55

TAX ADVICE

Other criteria which will be used for comparative purposes will.

Be a cash pot of 75 K to allow for buying in Greater London.

Invariably be working with terraced houses because they are popular with both tenants & buyers, are readily available at auction and form the bulk of the portfolios I have created though, in London, leasehold flats were more common.

Invariably be bought at auction, because auctions are a regular and reliable source of housing needing work, from makeovers to complete modernisation, with reliable monthly research data readily available courtesy of EIGroup.

To help investors who are nervous about buying auction property, in January 2016 an 80,000 word FreeTo-Reader book titled Buying Auction Property (BAP) is being published along with Location Addendums.

For further information go to www.BuyingAuctionProperty.com.

At the time of writing this article, the next Landlord Investment Show is being held on November 4 in Southampton, followed by Olympia (London) on November 19. The November issue may be published in time for the Southampton Show but will be published in time for Olympia. Either way, this article will concentrate on operating the NMLI-TFR Strategy in the Southampton area.

Before continuing, I must include a disclaimer. These articles will include reference to and examples of properties for sale both at future auctions and through estate agents which would appear to have, or support "investment" potential such as comparative values. The fact that I have included reference to a property does not mean that I believe the property, or any similar property, has any investment potential or that I am in any way recommending the property as a "good" investment. In every case the reader, in making a buying decision about any property mentioned in these articles, can only rely on their thorough due diligence, including recommended qualified professional advice. For the reader’s purposes, my comments do not constitute due diligence.

For the purposes of this article, Southampton includes Eastleigh & Totton, Fareham, Gosport & Portsmouth. I am reasonably familiar with Southampton & Eastleigh and either side of the M27 as it runs down to Havant, having spent some days researching this location for a novice investor with a local investor who I was fortunate enough to meet at LIS Olympia, 2014.

That said, I certainly don't have sufficient knowledge about the various property investment markets across this location to write a BAP Addendum on Southampton. If you or any of your investor colleagues are interested please contact me through www.BuyingAuctionProperty.com.

Suffice to say that there is a strong auction culture across this location with Clive Emson, Auction House Southampton & Fox & Sons running regular auctions in Southampton and Nesbitt's looking after the Portsmouth area.

LANDLORD INVESTOR November 2015

TAX ADVICE

56

The result of the Southampton-Havant research was that a 3-bed terraced house in Southsea, within walking distance of the beach, was bought at auction for £ 205k through Nesbitt's who couldn't have been more helpful in dealing with the "new-to-location" investors that we were.

The property was relatively modern, 1950’s, not Edwardian/Victorian, and consisted of a living room, kitchen, cloakroom, 3 bedrooms & bathroom, small rear garden and narrow rear access. Un-usually the property had a flat roof with potential access from the 1st- floor landing.

General condition was average and certainly habitable and, with a limited amount of work over and above the, almost mandatory, new kitchen & bathroom, the property could be considerably improved and value increased to circa £300k. The main improvements were to relocate the cloakroom from between the kitchen & living room to the hall considerably increasing the depth of the living room, replace an existing bay window with virtual full-width UPVC patio doors and relocate the CH boiler from the principal bedroom.

With other relatively minor works to the internal fabric, including complete rewire & replastering, plus front & rear gardens, a tired house was given a new lease of life. The property was bought as a flip but as a let, over 80% of the cost would be tax-deductible as repairs.

Current examples and possible opportunities in Southampton, always subject to thorough Due Diligence.

November 2015

LANDLORD INVESTOR

CASE STUDIES All the following examples, which were possible opportunities in Southampton & Portsmouth will have been through the auction rooms before you read this magazine but are still worth spending some Due Diligence time on because as you can now find out the hammer price, you can work out whether you could have made the deal work at the hammer price or £100-£200 above, the next incremental increase.

This Due Diligence will also include costing up the fixup. My advice is to standardise the fixup across all your properties, by type, in any single location so, assuming that you will be supplying & fitting central heating in every fixup, that cost, with very little variation, particularly on the materials, will be the same for each of the three following lots.

To give you some idea of what's involved in costing up a fixup, go to You Tube and search "Investment Property Analyser" which will bring up a series of tutorial videos which I developed for rapid but accurate costing of auction properties. Preloaded, it's possible to calc your initial maximum bid in about 5 min, then fine tune to actual maximum bid in maybe 10 min.

Whilst on You Tube, take a look at another tool I developed, the Lot Analyser. Combined, these Analysers will help you avoid a lot of the pitfalls in Buying Auction Property.

57

3 BED UNMODERNISED - 135K Southampton SO15 3 Bed Unmodernised Guide 135k. As the auctioneer's point out, this property would benefit from a revised internal layout as bedroom 2 leads through to bedroom 3 also the bathroom is on the ground floor through a lobby at the end of the kitchen. EPC "E". Revising the layout so that there is direct access into each bedroom and, not mentioned by the auctioneers, include a 1st floor bathroom, along with other "improvements" which would be needed to raise the EPC from "E" to "C" possibly "B" should substantially increase the value of this property. Rightmove list a STC "comp" & 270 K. Auctioneers Fox & Sons, October 29, Lot 3.

2 BED FAMILY HOME - 110K Southampton SO14 2 Bed Family Home “Requiring Refurbishment & Revision Of Layout�, Guide 110k.

Auctioneers recommend that the property is reverted back to a 3 bed layout. Currently the bathroom is on the 1st floor, probably taking up a bedroom.

Rightmove currently list STC comp at 250 K. Auctioneers Fox & Sons, October 29, Lot 24.

3 BED UNMODERNISED - 155K Southampton SO14 3 Bed Unmodernised Guide 155K requiring "Complete Refurbishment & Upgrading". This property would appear to be one for the "brave" as the auctioneers point out that it "may be beyond the scope of higher LTV mortgage related purchasers". My reading of this statement is that the property may not be habitable and a close inspection would certainly be advisable but you are unlikely to get much of an extension on the normal 15 min timeslot.

Half an hour on a good day, down the M27, gets you to Portsmouth, or I should say, Portsea Island which includes Southsea, but not Gosport, which is on the west side of the East Coast of Portsea Island.

If you split Portsea Island in half, N/S, the bulk of the housing is in the left/West half, which also includes Portsmouth University, Old Portsmouth, The Dockyards and finally Southsea at the southernmost point of the island. Interesting island, and, from an investors point of view, quite a hive of activity with the inevitable in a relatively small area, "it's who you know" that matters.

LANDLORD INVESTOR November 2015

TAX ADVICE

Although the EPC is not included in the auctioneers particulars is currently rated at "G" with a "B" potential. This would indicate that there is nothing that does not need doing. The EPC it doesn't even list the type of flooring so it may be flag stones, fantastic. Interestingly, the property scores five stars on lighting, the owners have installed low-energy lighting in 80% of the fixed outlets. Rightmove list an STC"comp" at 250k, this property properly fixed up is either going to fall just short of 250K or head towards 300 K but, please remember, that my thoughts and opinions having not viewed the property but not constitute due diligence. Auctioneers Fox & Sons, October 29, Lot 12

TAX ADVICE

58

Once again I would like to remind readers that I would really welcome assistance from a knowledgeable investor in helping prepare a BAP Addendum for this location probably taking in Waterlooville, Havant & Hayling Island, be advised by the investor and details on the website.

I was looking for something different in Portsmouth to include in this article and this lot ticks a lot of boxes. Auctioneers Harman Healy, November 4, Lot 8.

First of all, it is a "pre-fab", or more politely it is called today "non-standard construction" which presents the investor with a number of other problems to deal with including possibly asbestos in the roof.

But these properties are relatively cheap, are being refurbished throughout the UK making tidy modernised housing often with modern facings. Built in the 1940s, they were only planned/expected to have a life of 10-20 years. I wonder if one has yet been listed! I bought one in the Welsh Valleys some years ago and found it surprisingly easy to work on and upgrade and it provided good housing with decent room dimensions.

Another unusual aspect of this prefab is that whilst it is located in Portsmouth, it is a repossession being sold by London Auctioneers Harman Healy in Kensington Town Hall. It is what is termed an "off-location" sale. Being sold off-location increases the possibility of a bargain, and the further off location the better.

November 2015

LANDLORD INVESTOR

Is West London really going to take a day trip and travel to Portsea Island to view a 82k (guide price) prefab, likewise is Mr Portsmouth Investor going up to the smoke (Kensington) for the day to bid on a prefab assuming of course that pre-auction offers are not acceptable. For fixed up comp purposes, you cannot use conventional terraced houses which in PO6 would be around 250K but best comp achieved in the same street was 123k in Jun 2014 so maybe today, all fixed up to a high standard, 135k and 15/20k would go a long way?

After Southampton, I will be delivering a seminar at Olympia on November 19, by which time this magazine should have been published. Then, the 1st Show in 2016 is Guildford on January 28, so this Magazine will probably include an update on the Southampton location, but also look at other auction locations that are reasonably close to Guildford. Guildford through to Reading has to be option so, once again, it is back to the BAP Addendums and can you help develop an Addendum based on and around Guildford.

I hope you have found this article interesting, and I would welcome any feedback, good or bad, because, as I said at the start, my aim is to provide articles through 2016 based on & featuring Landlord Investment Show Venues. ⌂

,QGXVWU\ OHDGLQJ DQG LQGHSHQGHQW EX\ WR OHW SURSHUW\ LQYHVWPHQW DGYLFH

/DQGORUG ,QYHVWPHQW 6KRZ H[FOXVLYH RIIHU IRU WKH ILUVW HQTXLULHV ZH DUH RIIHULQJ EX\ WR OHW SURSHUW\ DQG ILQDQFLDO DGYLFH XVXDOO\ YDOXHG DW EHWZHHQ Â… DQG Â… DEVROXWHO\ )5((

7KLV RIIHU LV YDOLG RQO\ XQWLO WK 'HFHPEHU DQG LV ILOOLQJ IDVW VR UHVHUYH \RXU VSRW WRGD\ *HW DGYLFH RQ WKH IROORZLQJ IURP WKH H[SHUWV % %X\ WR OHW SURSHUW\ LQYHVWPHQW IXQGDPHQWDOV % 7KH UHFHQW EXGJHWDU\ WD[ FKDQJHV WR EX\ WR OHW % 2XU VWULQJHQW VHOHFWLRQ FULWHULD IRU VRXUFLQJ WKH PRVW VXLWDEOH SURSHUWLHV IURP WKH PDUNHW % $ UHYLHZ RI \RXU FXUUHQW SRUWIROLR LI VXLWDEOH DQG JRDOV WR HQVXUH \RX DUH RQ WUDFN % $ UHYLHZ RI \RXU FXUUHQW ILQDQFH VWUXFWXUHV DQG ILQDQFLQJ DELOLW\ LI VXLWDEOH

% $ UHYLHZ RI \RXU FXUUHQW HVWDWH SODQQLQJ DUUDQJHPHQWV LI VXLWDEOH

% 2XU FRPSDQ\ VWUXFWXUH DQG DUHDV RI H[SHUWLVH WR VHH LI ZH FDQ KHOS % 2YHUDOO DQVZHU DOO RI \RXU TXHVWLRQV UHJDUGLQJ SURSHUW\ LQYHVWPHQW DQG ILQDQFLDO VWUDWHJLHV

6LPSO\ WH[W /DQGORUGV WR &DOO (PDLO LQIR#QRYD ILQDQFLDO 9LVLW RXU :HEVLWH ZZZ QRYD ILQDQFLDO

", / / ' / $ / )' "% & / /% ) ( / ./' / / "! * (/ *' "% './ / ", / ! ! / ' / % /% &' $ /- ' /' / %"# $'./ + & / /( / ! "$ ' "!/ " && "! % &/

A LETTING AGENT THAT DOESN'T CHARGE COMMISSION?

We offer fixed fees from just ÂŁ9.99 to let your property, instead of charging commission.

So you could save hundreds when you let with us.

Residential & Commercial