Latest News....

Tenancy Deposit Scheme Causes Trouble With Landlords

Many landlords have failed to comply with the new Tenancy Deposit Protection scheme launched at the beginning of this month and the new rules have been described as a "logistical nightmare" by many residential letting agents in England and Wales.

The scheme, which launched on 6th April requires landlords to register any of their new tenancies with one of the three government-approved schemes. These schemes protect tenant's deposits and formalise the process of returning them at the end of the lease agreement.

However, ARLA (the Association of Residential Letting Agents) suspect that a large number of landlords are still unaware of the change in law - despite there having been many publicity campaigns from different parties. Up to three quarters of private landlords are thought not to have joined a scheme yet, whether it is because they are simply unaware of the development or confused by the last minute changes.

Residential letting agents are blaming the government for not allowing enough time for the industry to prepare for the changes and also for failure to inform private landlords. In the run-up to the scheme's launch there had been lobbying attempts to delay by up to three months but these were not successful.

Many letting agents found themselves rewriting complicated tenancy agreements only hours before the new rules came in because of last minute changes. Some agents are still waiting to find out how to register new tenants - a dangerous game when you consider that landlords who do not register can be fined up to three times the rental deposit and lose the right to evict tenants.

Buy-to-Let Property Under Scrutiny From The Taxman

The huge growth of the lettings market has turned the watchful eye of the taxman onto buy-to-let property owners - now thousands of amateur landlords may find themselves with a higher tax bill.

Using new computer technology, tax inspectors are looking through 'to let' advertisements and even leaving the office to check on tax-dodging landlords by patrolling the streets. There has also been a new whistle-blowing telephone line set up to catch out the many people failing to admit to their rental income - several thousand have already been reported.

Last year a further 350,000 buy-to-let mortgages were given out by lenders - at a total cost of £38 billion - and increasing property prices and rents for the estimated 700,000 landlords paying the wrong amount of tax could mean an early bonus for the taxman. The government needs to raise as much income from taxes as possible, and property investors could play a major part in that drive.

Not all of these landlords are deliberately dodging tax however - some could be quite innocent of the miscalculation, and this could lead to these unfortunate individuals being subject to large fines and even prosecution. Worse, if a property investor is found to be guilty of paying too little tax, they could incur a full-blown tax investigation for every area of their finances- a stressful and intrusive experience.

These new crackdowns were revealed on the Inland Revenue's website last week, and now 120,000 people have telephoned the whistle-blowing line - with a high number of tip-offs being attributed to landlords. Also, prices on advertisements for property to let are compared to property investors' tax records to uncover discrepancies. Unfortunately for many, the confusion over how Capital Gains Tax (CGT) and income tax apply to buy-to-let may have caused many incorrect tax assessments - and a further number of landlords do not even know that they need to declare tax earned from property.

The first sign that you may be in trouble will be a letter of demand from the Inland Revenue, which must be paid immediately - plus interest - otherwise penalties can increase the amount by up to 100%. Landlords who know they fall into this category are being urged to own up now, and those who don't should at least get their tax checked by a reputable advisor.

The average buy-to-let property investor in the UK has a portfolio worth about £1.5 million according to some research, with estimated gains of around £150,000 within the last year. There is also a strong demand from tenants, and this has meant more rent increases - at their fastest rate for five years.

Ikea Flat-Pack Properties to Begin Building in the UK

The Ikea flat-pack homes, named "BoKlok", are to begin being built in the UK from June - and there has already been considerable interest in the development situated in Gateshead.

The flat-pack properties were first dreamed up in the 1990s by Ikea and another Swedish firm called Skanska. The need for new, affordable housing has led to a surge of interest in the scheme which sees the properties being partially constructed in factories before being fully assembled on site. So far more than 3,500 have already been built in Sweden.

These homes are a far cry from the post-war pre-fabricated houses many of us are familiar with - they are modern, chic, have extra high ceilings, large windows and balconies.

The UK company who are coordinating the Gateshead development, Live Smart @ Home are part of the affordable housing group called Home. Since planning permission was granted earlier in the year, they have been overwhelmed with enquiries. The first stage of the building programme will see 36 BoKlok flats being built - aimed at households earning between £15,000 and £35,000 per year - and the developers believe they can offer a far higher standard than traditional affordable housing.

A second application has been put in to buid another 84 properties - consisting mainly of 2 and 3 bedroom houses. The initial homes will sell for between £90,000 an £120,000 with the option to buy in a share or with full ownership. This development is a success partly due to the willingness of the local council to support an unusual project - and hopefully they will lead the way for more projects of this type.