Weekly landlord news digest: Issue 34

In our weekly news round up from Hamilton Fraser Total Landlord Insurance we bring you the latest industry highlights and talking points.

This week, the ripple effects of the tenant fee ban continue to impact the sector, and ‘pet rents’ hit the headlines as landlords claw back the costs of dealing with damage from pets.

Also this week, Labour promise to give tenants the right to buy their rented homes at a discount; the NLA blames lack of enforcement of regulations for standards in the private rented sector;  and the Office of Tax Simplification offers landlords a chance to have a say about future tax changes.

 

Pet rent loophole avoids tenant fee ban

Landlords are charging ‘pet rents’ to cover the costs of potential damage to their rental property by cats and dogs.

The extra monthly payment is seen by private renters as a way of getting around the tenant fee bans in England and Wales. The bans mean that, rather than taking a refundable deposit at the start of a tenancy in case a pet damages a home, they must charge a monthly rent top-up. Although the extra deposit is outlawed under the ban, increasing the rent is allowed.

Letting agent trade magazine The Negotiator says a search of online property portal listings shows 160 homes for rent calling for tenants to pay between £15 and £25 extra a month if they have a pet.

“The charges appear to be a gaping loophole in the Tenant Fees Act, which makes no mention of prohibited charges or rent relating to pets, restricting the law to humans,”

– The Negotiator 

Consumer law says landlords can only turn down a request to keep a pet based on reasonable evidence that the animal may cause damage or misbehave. This would include looking at the pet’s size, the potential damage that could be caused and the impact this could have on the prospects of re-letting the home.

 

Labour promise tenants the right to buy their rented homes at a discount

In a continuing conflict with buy-to-let landlords, Labour’s shadow chancellor, John McDonnell, has said he could give tenants the chance to buy their rented homes from their landlords at a discounted price. He stated that such a policy would be a “great and radical” solution to the “burgeoning buy-to-let market”.

McDonnell said he hoped it would reverse the fall in affordable housing seen after the Thatcher government’s decision to allow council housing tenants to buy their homes. Read the full story here.

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Lack of enforcement affecting PRS standards

The National Landlords Association (NLA) has argued at a London Assembly Housing Committee session, that it is not a lack of regulation but a lack of enforcement that is affecting standards in the private rented sector (PRS).

At the session, Assembly Members were given evidence from panellists, including the NLA, regarding the standard of privately rented homes in London and the role of local authorities.

The NLA argued that extending the Decent Homes requirement would not increase standards because local authorities already had powers under the Housing Health and Safety Rating System (HHSRS).

The issue was not the absence of regulation but the ability to enforce existing standards which had not been successful. The NLA acknowledged that under staffing was an issue and more needed to be done to support local authorities in retaining qualified personnel.

Read more on LandlordZONE here.

We advise that all landlords use the HHSRS guidelines to complete a full risk assessment of their property to keep their tenants safe. To help, Hamilton Fraser Total Landlord Insurance has also compiled a list of the main hazards that landlords should be aware of.

Landlords asked what they think about tax

Tax experts want landlords to give their opinions about planned changes to the way they keep property business accounts and file their tax returns.

The Office of Tax Simplification (OTS) – a government agency tasked with making tax easier to deal with – has several ideas about how to improve the tax system for landlords.

Among the proposals are plans to enable business records to be kept online and to pay tax on profits at regular intervals instead of once a year, with a self-assessment tax return.

The OTS also wants to know what landlords think about banks or letting agents paying tax from money held on account.

Other ideas include populating tax returns from data already held by HM Revenue & Customs, such as information filed by letting agents and local councils.

Have your say at the OTS web site [Consultation closes 20 September 2019].

For more information on the topic of tax, check out our guide: Taxes for landlords: the complete guide for 2019/20.