Future Plans for 2017

2016 was a year of great change in the private rented sector especially for landlords, including increases in stamp duty. Industry expert Paul Shamplina chats with CEO of mydeposits and Hamilton Fraser, Eddie Hooker, about previous year’s events and upcoming changes in a review and predictions podcast that can be found here.

2017 looks set to be another year of upheaval, here’s our list of some important areas of change.
 

Mandatory Client Money Protection

There is conversation within the sector and especially the Government concerning ‘mandatory client money protection’ becoming legislation.

Client money protection is an insurance policy designed to protect clients’ money, such as rent, deposit or other monies, from theft or misappropriation by an agent. As it stands agents do not, by law, need client money protection, and unfortunately many landlords and tenants are still unaware that it exists. It is likely, in early 2017, that the Government will announce that client money protection will become mandatory throughout England, but it will unlikely to be made to the legislation before 2018. These changes will be positive in regulating the industry further and ensuring clients’ money is secure.

Tax Changes

Concerning tax, there appears to be further changes in the New Year, especially as the government aims to review the private rented sector. The introduction of 3% stamp duty that has been added to the purchase of a second property has already increased the cost for landlords after it came into legislation in 2016.

As of April 2017, tax relief is also changing for landlords meaning that they are unable to use their income tax bills to offset interest only mortgage costs. Instead of being taxed on profit, landlords will now be taxed according to their annual turnover amount. Until now landlords could claim complete tax relief on mortgage interest payments, however, landlords can no longer take their mortgage interest away from their own rental income, now only permitted at a basic rate. If you are a higher rate taxpayer this may increase costs and for lower rate tax payers it could increase the tax bracket you fall under, for example, 20% tax earners may be pushed up to 40%.

The National Landlords Association (NLA) predicts that 440,000 landlords will see an increase in their tax bracket due to this change in legislation*. These changes will be tapered over a four-year period meaning that by 2020 tax relief will be at the basic rate.

Wear and Tear Allowance

Another change commencing in 2017 is the Wear and Tear Allowance. Previously there was a 10% allowance for fair wear and tear on furnished let residential property. This has now been removed and to be eligible for any tax deductions you must prove any outlay you have incurred in maintaining the property. You can no longer simply deduct 10% as standard.

For more information on Wear and Tear, check out our free guide here.

Banning of Tenant Fees

It was announced in late 2016 that the Government would be supporting the banning of all tenant fees after an advisory council has met to discuss these potential changes. Chancellor Philip Hammond however, suggested that this change should happen soon. While discussions may take place in 2017, changes will be unlikely to follow until 2018 at the earliest. For more details on how you can minimise the impact of banned tenant fees, check out our expert guide from Paul Shamplina here.

mydeposits’ aim is to support all landlords, agents and tenants and to help and assist professionalise the private rented sector – For more expert guidance, visit our resource centre here.

 

 

2016 in Review and Predictions for 2017

Our key partner and buy-to-let specialist, Hamilton Fraser, and renown industry expert, Paul Shamplina have released the next episode in their series of podcasts designed to help educate landlords within the private rented sector and better manage their lettings.

2016 – A Year in Review

In this episode, Paul Shamplina chats with Eddie Hooker, CEO of mydeposits and Hamilton Fraser about the past 12 months, covering topics such as:

  • – Right to Rent and what this means for landlords and agents
  • – Rent Smart Wales and how this could eventually be introduced in England
  • – Changes to eviction notices
  • – Legislative changes that are affecting landlords and agents across the UK
  • – How the changes to stamp duty will have a knock on effect to the private rented sector

Looking ahead to 2017

The conversation also stretches ahead to the new year. Eddie and Paul take a look at legislation that is already in the pipeline and offer their predictions for the sector, over the next 12 months and beyond:

  • – Mandatory client money protection insurance for letting agents and what this means for landlords
  • – Tax changes and how this can affect your cash flow as a landlord
  • – Changes to the wear and tear allowance

Listen Now

Whether they are legal requirements or changes to how you operate your lettings business, make sure you are up to date on the goings-on in the industry.

 

 

Opening Hours over the Festive Period

During the festive period we will be operating our normal hours of 08:00 – 18:00, Monday to Friday, with the exception of the dates below:

  • Monday 26th December 2016 – Closed
  • Tuesday 27th December 2016 – Closed
  • Monday 2nd January 2017 – Closed

During this period you can still join mydeposits online and manage your deposit protections in your online account using the website.

Wishing you a very Merry Christmas and a Happy New Year.

The team at mydeposits

Our Customer Services Team – Paul Shamplina

Paul Shamplina, Brand Ambassador for mydeposits, talks about his time spent with the mydeposits Customer Services Team:

As the new Brand Ambassador for mydeposits, I felt that one of the first and most important things to do was to get on the phones and listen to some of the incoming calls received by their Customer Service Team.

I have been supporting distressed landlords for many years, guiding them through the often daunting process of regaining possession of their properties and, in many cases, trying to regain rent arrears from tenants. This was a great opportunity to listen to some of the enquiries mydeposits receives from landlords, tenants, corporate landlords and letting agents, and see how my experience may be able to support the team in the future.

What types of inquiries do they deal with?

The volume of calls the Customer Service team receives is unbelievable.  In the last six months, the team of 30 advisors answered over 86,000 calls. Interestingly, only 0.5% of these are complaints (the lowest of all the deposit schemes), most of which relate to disagreements on deposit decisions made by Adjudicators – but then you can never please everyone.

The nature of all the calls received by the team varies greatly, requiring the Customer Service team to demonstrate skills in patience, understanding and empathy.  It can be a very challenging role, especially if the person on the end of the phone is frustrated and irate.

Some interesting statistics on dispute causes show 23% relate to cleaning, 19% on damage, 4% rent arrears (which I thought was particularly low) and 26% because the deposit has not been returned to the tenant from the landlord, with no reason given.

What did I find?

While observing the Customer Service Team receiving calls and listening in to them, it was clear that a lot of time and effort is invested in training to ensure advisers not only know how to handle enquiries but also fully understand the security processes in place.  I’m told it takes on average 8 months to fully train an operator on the mydeposits Customer Service advice line.  Judging by the broad range of enquiries, I can see why, but the confidence and expertise of the staff are excellent.

I listened to one call where a tenant could not spell her surname, nor did she know her own telephone number, which naturally sent alarm bells ringing.  This is why mydeposits has such strict security clearance in place prior to engaging in conversation about a deposit.   Without it, any random person could pretend they are someone they are not and attempt to obtain the deposit.

Training and development

Following on from my day with the Customer Service team, I have since been involved with running a workshop set up by Operations Manager, Stuart Feldman.  We pulled together over 40 frequently asked questions taken from landlords, tenants and letting agents and acted out the phone calls to see how individuals handled them.  Some examples included:

  • – Tenants complaining the landlord has not returned their deposit, which they need to move into their next property
  • – Landlords complaining about a decision made at adjudication
  • – Tenants inquiring what they should do if their landlord has failed to protect their deposit in the 30-day time period
  • – Landlords wanting clarification on the process of serving a tenant with a Prescribed Information document

The team really enjoyed the session, but I think I enjoyed it most, finally getting my chance to role-play a disgruntled landlord, tenant and letting agent to the group. I may have to brush up on my acting though!

This is just the start of my journey as Brand Ambassador for mydeposits, so watch out for my future blogs, when I sit with the Adjudication and Dispute Resolution Teams.  I’ll be sharing some of their great case studies, like the tenant who allegedly put rotten fish underneath the floorboards of a property just to get back at his landlord!

To find out more about how mydeposits helps supports landlords, click here.

Right to Rent – What you need to know

Our key partner and buy-to-let specialist, Hamilton Fraser, and renown industry expert, Paul Shamplina have released the fourth episode in their series of podcasts designed to help educate landlords within the private rented sector and better manage their lettings.


Right to Rent – What you need to know

In our latest podcast, Paul Shamplina, industry expert and Brand Ambassador for Hamilton Fraser, talks to us about Right to Rent and what it means for you.

What the podcast covers:

December 1st saw new, harsher sanctions introduced for those who failed to comply with the law, so it is now more important than ever to make sure you are clued up when it comes to performing Right to Rent checks with your tenants.

In this podcast, Paul talks about:

  • – What Right to Rent is and why it was introduced
  • – The penalties for landlords who fail to comply
  • – The types of tenancies and tenants that need to be checked
  • – What you need to do in order to comply with the law
  • – What to do if you cannot perform the appropriate Right to Rent checks

Listen to the podcast

The Right to Rent requirements apply to the majority of property professionals across the country so it is imperative that you understand your responsibilities to avoid the new sanctions, which include uncapped criminal fines and even prosecution.

We’ve put together a downloadable fact sheet, which you can find here, which covers everything discussed in the podcast.

Right to Rent – Expert Advice

December 1st saw new, harsher sanctions introduced for those who failed to comply with the law, so it is now more important than ever to make sure you are clued up when it comes to performing Right to Rent checks with your tenants.

This graphic goes hand in hand with our latest podcast, in which, industry expert Paul Shamplina discusses your Right to Rent requirements as a property professional in England.

 

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Letting Agent Fees to be scrapped in England

Chancellor Phillip Hammond will announce a ban on letting agent fees in England later today, in his first Autumn Statement.

A similar ban has been in force in Scotland since 2012, however, today’s announcement will not cover agents in Wales. Since last August, it has been compulsory for letting agents in England and Wales to display their fees.

The fees, which can include charges for drafting a tenancy agreement, inventory charges and referencing checks, average £223 according to the English Housing Survey.

The Government’s aim behind this ban is to protect tenants being unfairly exploited by hidden fees imposed by letting agents. Hamilton Fraser and mydeposits CEO, Eddie Hooker, believes action should be taken against rogue letting agents in the industry.

“We, of course, support raising standards in the Private Rented Sector and initiatives to push out rogue letting agents, but we have concerns that an outright ban may have the unintended consequence of pushing up the already heavy burden of rents on tenants, especially in high demand areas. We called for additional enforcement to drive up standards in the industry only recently, but fear this is a step in the wrong direction and could in fact have an adverse effect.

This ban will increase costs on landlords who are trying to plug the gap in a difficult housing market. Parts of these costs are likely to be passed back to the tenant through increased rents as a result. It could also have a negative impact on the rental market as a whole with possible office closures and some agents having to shut up shop entirely.

Other measures should have been addressed by the Chancellor to help stimulate the market following Brexit, such as reversing the additional stamp duty on buy-to-let properties and second homes for landlords.”

UKALA and Property Redress Scheme Launch New Partnership

The UK Association of Letting Agents (UKALA) has switched consumer redress provider to the Property Redress Scheme (PRS).

Membership of an independent redress scheme is a key benefit of UKALA membership, giving both tenants and landlords the right to impartial independent redress if their UKALA agent fails to resolve a complaint.

The PRS, which is approved by the Department for Communities and Local Government, National Trading Standards Estate Agency Team and Chartered Trading Standards Institute, provides redress to over 6,000 property agents and professionals across the UK.

New or renewed UKALA members from 3 October 2016 will already benefit from membership of PRS, with all other UKALA members switching redress providers from the 1st January 2017*.

While the switch will affect all UKALA agents across the UK, it is particularly important for agents in England who must belong to a government approved property redress scheme by law.

Any existing redress cases undertaken for UKALA members by its current redress provider will continue until the matter has been resolved.

UKALA agents will continue to benefit from all existing benefits of membership.

Richard Price, Executive Director of UKALA, said:

“We’re pleased to announce that, following a formal review to secure the best service and value for our members, we’ll be working with PRS as our ongoing provider of agent redress. “We have written to all UKALA members to inform them of the change, and we’ve outlined the steps that members in England must take to continue to meet their legal obligations.

In reality this means updating any information about their redress provider across print and digital media to make reference to the PRS, and displaying the PRS logo on their website and in their branches. We’ll be providing the necessary collateral, such as window stickers and logos, to make this transition as simple as possible”.

Tim Frome, Managing Director, PRS, said:

“I am delighted that UKALA has decided to work with the PRS to provide government authorised consumer redress services to its members. We support UKALA in their aims to improve standards in the industry which they do by providing client money protection and guidance and education to their members.

“In the event that UKALA members have escalated complaints which we are required to resolve they will benefit from our proactive approach. All decisions will be binding on the member if agreed by the consumer, but we always attempt to assist the parties to come to an early resolution because formal mediation is not always the necessary or appropriate course of action”.

logo-4         ukala

– ENDS –

* Since April 2014 UKALA’s independent redress partner was Ombudsman Services: Property (OS:P).

 

For further information, please contact:

Sam Haidar
PR Manager, UKALA
0207 840 8925
press@ukala.org.uk

Rent Smart Wales – Are you ready?

Changes to the law in Wales mean that all landlords and letting agents must either register or license themselves and their properties with Rent Smart Wales by the 23rd November 2016, otherwise they could face penalties, including:

  • – A fixed penalty fine,
  • – The inability to serve a Section 21 Notice,
  • – Be served with a Rent Stopping Order, freezing all rent payments from the tenant.

There are varying levels of registration and licensing, depending on what role you play in the letting of property in Wales;

All landlords who rent out a property in Wales are required to register with Rent Smart Wales, and may also be required to become licensed.

Landlord Registration

If you are a landlord who rents out a property in Wales via a letting agent and you have no involvement in the tenancy, then you are not required to obtain a Landlord License, however you will still need to register with Rent Smart Wales.

As a landlord renting out a property in Wales, it is also your responsibility to make sure you use a letting agent who is fully licensed.

Full information about Rent Smart Wales and on registering as a landlord is available here.

Landlord Licensing

Self-managing landlords who let out a property in Wales on an Assured, Short Assured or Regulated tenancy agreements themselves, without the help of a letting agent, are required to obtain a Landlord License from Rent Smart Wales.

As part of obtaining a landlord license under the new regulations, you must undertake and provide evidence that you have completed an approved Landlord letting course, such as those on offer from the National Landlord’s Association (click here for more details).

For the full information from Rent Smart Wales about how to comply, click here.

Agent Licensing

If you let or manage properties in Wales on behalf of Landlords, then you are required under the new law to become obtain an Agent License.

It is important to note that this is not limited to companies acting as commercial letting agents, but also to family, friends and other individuals who manage the rental process on behalf of landlords.

To find out the full legal requirements as an agent operating in Wales, click here.

As the deadline to comply with the new legal regulations in Wales draws closer, make sure you are ready – the Rent Smart Wales website contains all of the information you need to comply.

For other legal updates relating to the Private Rented Sector in Wales, make sure you regularly check back to our “mydeposits Wales” page which will be updated in line with future changes to the sector that affect you.

 

Top Tips on Home Security

As the nights become darker and days get shorter, it’s now more important than ever to make sure our homes are secure. Sainsbury’s Bank has created a visual guide on easy yet effective ways you can improve your home security. From the different types of door locks you can install to steps you can take to protect your valuables, it’s full of great tips to help you deter intruders this winter.

Sainsbury’s Bank Visual Guide to Home Security