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Wakefield Buy To Let Property Investors Criticised For Vacant Properties

Buy to let property investors in the private rental sector have been criticised for leaving thousands of vacant properties across Wakefield.

Over 3,300 houses in Wakefield have been vacant for at least one month, according to figures which date back to March. However, the number of derelict properties has fallen. The district no longer has any ‘empty property hotspots’ or single streets with lots of abandoned homes.

Councillor Glenn Burton led a task group on the issue and was ‘pleasantly surprised’ by his findings. Speaking at a scrutiny committee meeting on Monday, he said: ‘There’s been a change over time from having very concentrated areas of Victorian terraced housing, which was in very low demand, particularly in the south-east and Hemsworth. “Having been a problem in the past, it isn’t anymore.’

A mere 0.8 per cent of the city’s overall housing stock is empty. This is in comparison to the national average of 1.8 per cent. Councillor Burton said that this demonstrated the way in which Wakefield was ‘punching above its weight on the issue.’

However, there have been problems reported where due to emotional attachments to properties or a desire to wait until property prices rise, many homes have been left vacant by landlords. A lack of funds to renovate a property is another reason why a landlord might leave it uninhabited.

Councillor David Jones said that rogue property owners who did not adhere to legal guidelines were a contributing factor as they were difficult to trace. He said: ‘A number of these private landlords aren’t registered landlords and so they go off the radar. As a consequence, more pressure needs to be put on this particular type of landlords.’

Councillor Betty Rhodes added that some owners were letting individual rooms out to large groups, causing issues with overcrowding. She said: ‘There was one case in my ward (Wakefield North) where every room in the house had a family put in it. There was just one kitchen and one bathroom and all the families had to share them. For some people, it’s just all about the income. The landlord has thought, ‘I can get another family up there, regardless of the consequences.’ It is an issue.’

The report also commended the council’s action on empty homes in recent years but said the ways landlords with empty homes can be helped should be ‘better promoted.’

Source: Residential Landlord

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Investment Property Buyers Urged To Seek Advice Before Incorporating

Buy to let property investors are being urged to seek the proper advice before incorporating their business into a limited company to avoid rushing into any changes.

Specialist buy to let broker Commercial Trust Limited has issued a warning to landlords following recent reports from the press which suggest that incorporation is becoming increasingly popular in the buy to let sector. There is a concern that landlords may rush into this decision without adequate consideration.

The reduction in mortgage interest tax relief and the introduction of stamp duty have both contributed towards the trend of landlords opting to incorporate in order to improve their finances. It was predicted by lenders that this trend will continue into the coming year as landlords aim to avoid paying taxes and increasingly see incorporating as a viable option.

Chief executive at Commercial Trust Limited, Andrew Turner, expressed concern about the trend: ‘Whilst it is understandable that buy to let landlords want to avoid paying more tax than is necessary, it is essential, as with any investment, that they fully investigate how their personal circumstances apply to buy to let taxation. Upon face value, many landlords are perhaps seeing the headlines and are considering incorporating their property investments, as limited companies are taxed differently to individuals. However, taxation is a complex issue and I would urge anyone considering this move, to seek advice from a tax specialist first, to ensure that their buy to let venture would actually be better off tax-wise, in a limited company.’

He continued: ‘Having done so, we would be delighted to help any landlords that then want to consider investing in buy to let as a limited company. There are a wide range of lenders and products that are available and based on individual circumstances. But the message should be clear to landlords thinking of taking the limited company option, to investigate fully first.’

Source: Residential Landlord

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Right To Rent Scheme Issues Over 400 Fines

Over 400 fines have been issued to private buy to let property investors under the controversial Right to Rent scheme.

By the end of March, 405 financial penalties had been levied on landlords, amounting to the value of £265,000. This total marks all fine fines that have accumulated since the Right to Rent scheme was introduced across England two years ago.

The Right to Rent scheme requires that landlords must ensure that their tenants have the right to be in the country. They must do this by checking passports or identity cards. Failure to comply can lead to landlords being fined up to £3,000 per tenant. Those who knowingly let a rental property to someone in the country illegally can face criminal proceedings and a stay of up to five years in prison.

Although many fines have been issued under the scheme, an inspection report published in March found that there had been no prosecutions.

The scheme has been placed in the limelight once again as part of the newly framed ‘compliant environment,’ following the Windrush scandal, which saw people who have lived and worked in Britain for years wrongly challenged over their immigration status.

Following the scandal, the Home Office issued guidance to landlords to clarify that prospective tenants who have lived in the UK permanently since before 1973, and have not left the country for long periods in the last 30 years, have the right to rent property.

Analysis of official data on Right to Rent from the Press Association shows the number and total value of fines increased for five consecutive quarters. Numbers then fell from the middle of last year. 39 penalties with a total value of £23,500 were issued from January to March 2018.

The National Landlords Association (NLA) has called for Home Secretary Sajid Javid to review Right to Rent. Director of policy and practice at the NLA, Chris Norris, said that the latest figures ‘would seem to show that landlords are more aware of their responsibilities and are carrying out the required checks’.

However, he continued: ‘It is important to remember that landlords are neither immigration experts nor border agents. The Right to Rent scheme has placed an additional cost on an already pressurised sector, while the excessive checks and lack of monitoring may have had harmful consequences for would-be and vulnerable tenants.’

A Home Office spokeswoman said: ‘It’s right that we have a compliant environment to deter illegal immigration and protect public services and it is a policy that has been operated under successive governments. The Right to Rent checks were developed with the input of the Landlords Consultative Panel and there is online guidance as well as a helpline to ensure the scheme is fully understood.’

Source: Residential Landlord