Regulation & Law
News articles looking at national legislation and local regulation and the application of law to the residential property industry.
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Majority of buyers benefit from progressive stamp duty
Some 71 per cent of homebuyers in England and Wales will benefit from changes to the Stamp Duty Land Tax (SDLT) announced in the Autumn Statement, according to Nationwide. Nationwide said that 86 per cent of purchases in London and the South East would profit from the Government’s decision to abolish the slab structure on Stamp Duty tax. Homebuyers in London are set to be the biggest beneficiary of the change due to the fact that home prices are generally higher and thus a higher proportion of transactions are liable for stamp duty. Overall, it is estimated that 98 per cent of buyers will pay the same or less tax under the new system in which purchasers pay the marginal tax rate on the relevant elements of the purchase price. According to 2013/14 data from the Land Registry, homebuyers in England and Wales would save an average of £1,600. In fact, according to the latest H M Revenue & Customs Tax Receipts statistics released in recent days, the Chancellor’s reform of the SDLT regime is already having an impact on tax receipts. The figures show that following the changes, SDLT receipts in January 2015 were down £299 million month-on-month, and…
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End of revenge evictions
The House of Lords late last week approved a Government amendment to the Deregulation Bill which will bring an end to so-called ‘revenge evictions’ by private sector landlords tired of moaning tenants. The new legislation will impose a ban on any landlord from serving a section 21 eviction notice on a tenant for a minimum period of six months if they make a complaint about the state of their property. The legislation has been criticised for imposing rules that can be exploited by bad tenants. But the decision to approve the new regulation targeted at tackling the problem of retaliatory eviction has been slammed by the CLA, which represents landowners, farmers and other rural businesses, for being rushed through Parliament. CLA President Henry Robinson (left) said, “We support action to prevent retaliatory evictions but this law will not stop bad landlords evicting tenants. It is much more likely to give tenants that are damaging the property or not paying their rent scope to delay eviction. As a result it will cause significant uncertainty for thousands of responsible landlords throughout rural communities. “This is the definition of bad policy making. It imposes a poorly designed, burdensome new regulation as part of…
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Get with the programme, say tenants
Half of tenants believe the tenancy application process is slow and outdated, according to market research company, Populus, who conducted a survey on behalf of tenancy software specialist OnBoard Pro. 1,000 Private Rental Sector tenants were questioned to give an independent analysis of the technology used in the lettings market. The results raised some thought-provoking points about current technology and how improvement could mean a better experience for tenants and more efficient processes for landlords and agents. The technology used varies but paperwork and manual processes occupy a huge amount of employees’ time. 52 per cent of tenants agreed that tenancy applications are reliant on outdated technology and feel that the efficiency of the application processes are not adding value or positivity to their customer experience. The survey also highlighted that an overwhelming majority of tenants would like to be able to pre-complete applications before meeting an agent and are keen to migrate from paper forms to apply from home. Tenants prepared to pre-apply and tee-up their referees in this way can reduce the agent’s workload and put themselves in a better position to secure their property of choice. Whilst increased regulation has been proposed, the tenancy 61 per cent…
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Are your HMO landlords licensed?
Many landlords operating Houses in Multiple Occupation (HMOs) properties are doing so without the correct licence in place, risking heavy fines, as well as potentially putting their tenants’ safety at risk, warns Rentguard Insurance. When a landlord recently received a huge fine for various breaches, including £3,000 in relation to violations of HMO regulations such as fire safety and being unlicensed, it added to a spate of cases highlighting the fact that many landlords are operating HMO properties without the correct licence in place. In another case, a Hounslow landlord who let out an overcrowded and rat-infested unlicensed HMO was recently ordered in court to pay nearly £40,000 in fines and legal costs. A total of 16 people were found crammed into the house and outbuildings, they included a family with a six-month-old baby living in a garden shed. Elsewhere, two west London landlords were ordered to pay a total of more than £50,000 for failing to register their property as an HMO and for breaching fire safety regulations after a fatal fire at their property in July last year. The landlords were prosecuted by Hounslow Council, which said that had the property been licensed as an HMO it would…
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Scottish Government revises property tax after UK stamp duty changes
Deputy First Minister John Swinney has announced a series of changes to the Land and Buildings Transaction Tax (LBTT) – which will replace stamp duty for homebuyers in Scotland – following Chancellor George Osborne’s amends to stamp duty in his Autumn Statement in December. Among the headline amendments, is the fact that homes in Scotland worth up to £145,000 will not now attract any tax, up from the previously proposed £135,000. For sales between £145,000 and £250,000, a tax rate of 2 per cent will be applied, with the introduction of a new rate of 5 per cent between £250,000 and £325,000. Mr Swinney had previously planned a tax rate of 10 per cent on residential properties sold for between £250,000 and £1 million – prompting concerns that those acquiring family homes could be hit. However, the 10 per cent rate will be applied to properties valued between £325,000 and £750,000. The top rate of 12 per cent – which was previously going to apply to residential properties worth in excess of £1 million – will now take effect from £750,000. The Deputy First Minister defended the Scottish national Party’s (SNP) decision to change the taxes following the Chancellor’s surprise…
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Labour’s proposed mansion tax under attack again
Ed Balls, the Shadow Chancellor, has been forced to defend Labour’s plans for a mansion tax on homes worth more than £2 million after it was described as “crude” by Lord Mandelson (left) who insisted last week that he did not like the idea of “clobbering people” with the levy. In offering his thoughts on the planned mansion tax, Lord Mandelson told the BBC’s Newsnight that, “I think it’s crude, I think it’s short-termist.” He went on to declare his support for the Liberal Democrat idea of adding new higher council tax bands. The Lib Dems, who originally called for a mansion tax on £1 million-plus homes prior to the 2010 General Election, have since refined their plans and are now calling for a review of the council tax bands in place since the early 1990s, with new bands above £2 million introduced. However, Shadow chancellor Ed Balls (left) has defended Labour’s planned mansion tax and insisted that a levy on properties worth £2 million-plus, which his party insists will be spent on the NHS, would be introduced in a “careful, consulted way.” He told BBC Radio 4’s The World at One: “I promise you that it [a mansion tax]…
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Sharp rise in new housing permissions
There has been a significant increase in the volume of housing permissions by local authorities in the last year, according to new figures published by the Home Builders’ Federation (HBF) and Glenigan. The latest HBF/Glenigan Housing Pipeline report reveals that 194,820 residential property permissions have been granted in 2014, ensuring the year saw the highest level of new housing starts in the UK since 2008. “Increasing housing delivery will provide the high quality homes our next generation needs, support thousands of companies up and down the land and create tens of thousands of jobs,” said Stewart Baseley (left), Executive Chairman of the HBF. However, he added that efforts still need to be made to ensure that the number of housing starts continue to rise in the years ahead, as the UK is currently still behind on the level of development needed to meet rising demand for new homes, fuelled in part by the Help to Buy scheme. Speeding up the rate at which permissions are granted is one of the keys to a significant, sustainable increase in housing supply, according to Baseley who highlighted that too many sites are ‘stuck’ in the planning system, with an estimated 150,000 plots at…
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Stamp Duty Reform
Every buyer, seller and estate agent in the land would have liked to see Stamp Duty abolished but we all knew that wouldn’t happen. However, George Osborne, The Chancellor of the Exchequer, dealt a masterstroke to the Opposition party with his dramatic – and immediate – Stamp Duty reform. Thousands of pounds saved in Stamp Duty payments – for 98 per cent of all homebuyers – will give potential buyers a real impetus to move. It’s another way of clobbering the rich to butter up Middle England voters.” This was a carefully constructed bomb among a whole salvo of missiles aimed at the Labour Party’s election campaign. It will certainly catch the votes of most estate agents when it comes to the crunch next May. Vote-catching aside, this was a brave – and clever – way of reforming tax which removes the need for a Mansion Tax, while the wealthy (those able to afford more than £937,000 for a home) can console themselves that it is a one-off payment on purchase, rather than an additional annual tax. Changes in a nutshell Old regime: Stamp Duty applies to all properties over £125,000. It was calculated in bands and even if the…
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Is there any value in a mansion tax?
It has been more or less been killed off by the Chancellor's new Stamp Duty regime - but did the mansion tax ever have much currentcy?
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