Call us on: 0115 8240235   |   Email: enquiries@robinsestates.com   like us on facebook        
telephone us
email us
like us on facebook


 

Property Search

Image result for running out of time

 

The new licensing scheme for rented homes in Nottingham is set to come into force on Wednesday, August 1, and yet it has so far only received applications from 10% of the city's properties.

The new controversial licensing regime, which is set to cover in the region of 32,000 privately rented homes, affecting 91% of landlords in the city, is believed to be the second largest scheme in the UK outside of London.

Registration for the scheme has been open for a month, requiring landlords whose properties are in the designated areas to register, with accredited landlords required to pay £480 per property, while non-accredited must pay £780.

Designated areas include Arboretum, Bestwood, Bulwell, Bulwell Forest, Basford, Berridge, Bridge, Clifton North, Clifton South, Dales, Dunkirk and Lenton, Leen Valley, Mapperley, Radford and Park, Sherwood, St Ann’s, Wollaton East and Lenton Abbey.

Failure to comply with the new scheme could lead to a civil penalty of up to £30,000, or prosecution on summary conviction which carries an unlimited maximum fine. Landlords may also be prevented from holding a licence in the future.

However, the scheme has not been well received, with a recent petition calling on the government to carry out a review of Nottingham City Council’s Selective Licensing Scheme, attracting more than 1,700 signatures.

Although 32,000 or so properties need a licence, the local authority has merely received just 3,140 applications so far - and the deadline is in less than 48 hours.

Changes to EPC Regulations 1st April 2018

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 establish a minimum level of energy efficiency for privately rented property in England and Wales. This means that, from April 2018, landlords of privately rented domestic and non-domestic property in England or Wales must ensure that their properties reach at least an Energy Performance Certificate (EPC) rating of E before granting a new tenancy to new or existing tenants.

 

These requirements will then apply to all private rented properties in England and Wales – even where there has been no change in tenancy arrangements – from 1 April 2020 for domestic properties, and from 1 April 2023 for non-domestic properties.

 

The National PRS Exemptions Register

Where a landlord believes that an F or G EPC rated property they rent qualifies for an exemption from the minimum energy efficiency standard, an exemption must be registered on the National PRS Exemptions Register. The register service is currently running as a pilot. Landlords who wish to register an exemption for a domestic or non-domestic property as part of this pilot should e-mail the BEIS minimum standards team at This email address is being protected from spambots. You need JavaScript enabled to view it.

 As of 1 April 2023, landlords must not continue to let any buildings which have an EPC rating of less than E unless they are exempted.

 

Who do MEES apply to?

Except as set out below, MEES Regulations apply to all properties requiring an EPC including all residential tenancies let under AT, AST or Company Let.  It does not apply to licences.

The MEES Regulations will not apply to the following:

  1. Buildings which are not required to have an EPC such as industrials sites, workshops, non-residential agricultural buildings with a low energy demand, certain listed buildings, temporary properties and holiday lets;
  2. Buildings where the EPC is over 10 years old or where there is no EPC;
  3. Tenancies of less than 6 months.
  4. Tenancies of over 99 years.

 

What are the exemptions?

There are several exemptions from compliance and therefore allow a property to be legally let with an EPC rating below “E”:

  1. Where third party consent is denied- where consent from person such as a tenant, a superior landlord or planning authorities is refused or has been given with conditions with which the landlord cannot reasonably comply;
  2. If energy efficiency improvements would negatively impact the value of the property or:
  3. If all improvements possible at no upfront costs to the landlord have been undertaken but the rating is still below an “E”.

In all instances, the exemptions are only valid for five years and cannot be transferred to a new landlord. Also, all exemptions must be registered on the central government PRS Exemptions Register.

 

Penalties for Non-Compliance

Local Weights and Measures Authorities (LWMAs) will enforce the new regulations and will have powers to impose civil penalties determined by the property’s rateable value. If a let property is found to be in breach of the MEES Regulations and a penalty is imposed, the lease between the landlord and the tenant remains valid and in force. Where the breach is for less than three months, the fine will be the equivalent of 10 per cent of the rateable value of commercial properties, subject to a minimum penalty of £5,000 and a maximum of £50,000 and £2,000 for residential properties. Where the breach is for more than three months, the fine will be the equivalent of 20 per cent of the rateable value for commercial properties subject to a minimum penalty of £10,000 and a maximum of £150,000 and £4,000 for residential properties.

If a Landlord breaches the MEES Regulations, the breach will be published on the exemptions register for a minimum of 12 months. Below is the Government Guidance for landlords

https://www.gov.uk/government/publications/the-private-rented-property-minimum-standard-landlord-guidance-documents

 

 

Is Investing in Property Still a Good Option Today?

You may have noticed that buy to let landlords haven’t been having a great time of it lately. Determined to curb the proliferation of such landlords in the UK and encourage more families and individuals to buy homes, the government has come up with a raft of measures aimed at pruning landlords’ profits.

And yes, many of these measures will cause pain to a lot of landlords. But they don’t have to. A little tweak of the strategy here and there and a chat with an accountant who specialises in property can do wonders for your bricks and mortar investments. What do we mean? Well read on…

Section 24 doesn’t have to be Draconian

Introduced this year Section 24 will cut back on how much residential landlords can claim on mortgage interest relief. Done on a sliding scale until it’s done away with completely in 2020, it means many landlords paying a higher rate of tax (40 per cent) will see their tax bills rocket (since they’ll be taxed on gross rather than net income).

One of the ways to mitigate this is to consider becoming a limited company, where you’ll be charged corporation tax and will be eligible to claim the mortgage relief expenses. Another is to consider dividing your profits between a spouse or business partner who pays tax in a lower bracket. Then again, remortgage and find a better deal now before the full tax implications kick in.

Why other (reluctant/accidental) landlords are leaving

Other grumbles about changes to the market include the introduction of a minimum EPC rating of E for new lets and renewals from April 1, 2018 (existing tenancies have until 2020) or a £4000 fine. This means landlords will have to invest thousands in making their rental properties compliant.

Other landlords have wondered about how their finances would look were mortgage interest rates to increase (although we don’t see this happening in the foreseeable future). Meanwhile the hike in Stamp Duty in 2015, resulting in a 3 per cent cost for all new buy to let properties didn’t help either.

Granted these are all viable concerns and for some landlords the excuse they needed to get out of the market (being a buy to let landlord comes with certain responsibilities, after all).

Why buy to let still reaps huge rewards

New investors though can be assured buy to let is still a viable investment opportunity. And here’s why:

  • Rental yields (typically between three and ten per cent) are far higher than any interest on savings you’ll receive
  • Property is a fixed asset, so you’ll still be accruing long-term capital appreciation, while picking up a monthly short-term profit at the same time
  • Property prices can fall as well as increase but this is unusual and in fact, prices continue to increase on an annual basis. Certainly, the property market is a far more stable investment than stocks and shares or hedge funds.
  • Thanks to the current UK housing crisis (which doesn’t look like ending any time soon) tenant demand for properties still very much outstrips supply ie there are more people looking to rent than there are properties on the market.
  • Rents typically rise in line with inflation, proving both a predictable and persistent income over the years (with void periods very unlikely because of high demand)
  • Mortgage interest rates are currently lower than they’ve been in years (yes, lender’s conditions are more stringent but if you pass them it could feel like you’ve struck gold).

 

Robins Estates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

By Angela Barbaro-Robins

To find out more about investing in buy to let, contact Robins Estates and speak to Angela on 0115 8240235

 

With Nottingham Annual Property Values 10% Higher This is My 2018 Forecast

Looking at the newspapers between Christmas and New Year, it seemed that this year’s sport in the column inches was to predict the future of the British housing market. So to go along with that these are my thoughts on the Nottingham property market.

With the average 5-year fixed rate mortgage at 1.98% (down from 3.47% in 2014) and 2-year fixed rate at 1.47% (down from 2.37% in 2014), mortgage interest rates offered by lenders are at an all-time low (even with the slight increase on the Bank of England base rate a few months ago). Added to this, there has been a low unemployment rate of 7.7in Nottingham, which has contributed to maintain a decent level demand for property in Nottingham in 2017 (interestingly – an impressive 9,797 Nottingham properties were sold in last 12 months), whilst finally, the number of properties for sale in the city has remained limited, thus providing support for Nottingham house prices, meaning what..…

 

Nottingham Property Values Are 10.02% Higher Than A Year Ago

However, moving into 2018, there will be greater pressures on people’s incomes as inflation starts to eat into real wage packet growth, which will wield a snowballing strain on consumer confidence. Interestingly though, information from the website Rightmove suggested over a third of property it had on its books in October and November had their asking prices reduced, the highest percentage of asking price reductions in the same time frame, over five years. Still, a lot of that could have been house-sellers being overly optimistic with their initial pricing.

In terms of what will happen to Nottingham property values in the next 12 months, a lot will be contingent on the type of Brexit we have and the impact on the whole of the UK economy. A lot of people will talk about the Central London property market in the coming year, and if the banking and finance sectors are negatively affected with a poor Brexit deal, then the London market is likely to see more of an impact.

Nevertheless, the bottom line is Nottingham homeowners and Nottingham landlords should be aware of what happens in the roller coaster housing market of Central London, but not panic if prices do drop suddenly there in 2018. Over the last 8 years, the Central London property market has been in a world of its own (Central London house prices have grown by 89.6% in those last 8 years, whilst in Nottingham, they have only risen by 36.6%). So we might see a heavy correction in the Capital, whilst more locally, something a little more subdued.  

Hindsight is always better than foresight and predicting anything economic is all well and good when you know what is around the corner. At least we have the Brexit divorce settlement sorted and, as the UK economy and the UK housing market are intertwined, it all depends on how we deal as a Country with the Brexit issue. However, we have been through the global financial crisis reasonably intact ...... I am sure we can get through this together as well?

Oh, and house prices in Nottingham over the next 12 months? I believe they will end up between 0.2% lower and 1.4% higher, although it will probably be a bumpy ride to get to those sorts of figures.

If you would like to read more articles on my thoughts on the Nottingham property Market – please visit my blog http://www.robinsestates.com/blog

By Angela Barbaro-Robins January 2018

 

Not only have we had the political turmoil of Brexit, and recently a major change in direction for the US government, one which will undoubtedly affect the UK, good or bad, we’ve had unprecedented change in UK letting regulation.

Property Portals