Dont get caught out. If you are a private landlord this has implications for you . If you wish to have an informal discussion with our team here about this subject please give us a call. More information will be added to our Blog on this shortly.
The end of January 2018 heralded the implementation of the new statutory code of practise for letting agents. In simple terms that means that all Letting Agents in Scotland have to comply with this Code and should also now apply to join the Scottish Letting Agents Register.
For landlords and tenants this effectively lays down a minimum standard of service that they can expect to receive from their Agent and gives them a way of challenging poor practise should this occur. This is only one part of a larger raft of regulatory changes affecting the sector , which have been covered at length in earlier posts. The important thing here is that Letting Agents have clear guidelines regarding their conduct and that staff meet the required standards having completed relevant training leading to SCQF level 6 or its equivalent.
All Agents must have gained access to the Register by October 1st 2018 or they will not be able to continue to offer these services.
Rentlocally is keeping well ahead of all the relevant dates and has in place a robust strategy to ensure that we are fully ready to meet the challenges of this new and more regulated future.
Many tenants report dampness to landlords or managing agents which turns
out to be condensation. This happens when warm air comes into contact with
a cold surface and moisture in the air turns into droplets of water.
If your tenants property has condensation, you may find a blackish mould
growing on the inside face of external walls, in the corners of rooms, on
window frames and behind wardrobes and other furniture. The mould is a
result of the condensation not being cleaned & dried in time.
Condensation is one of the main reasons why a full deposit is not returned to
a tenant at the end of the tenancy period. This is because it is normally the
responsibility of the tenant to take all reasonable steps to adequately
ventilate as well as heat the house.
If any condensation develops, the tenant is normally expected to wipe down
and clean the affected surfaces from time to time to prevent the growth of
mould and any other associated damage that can be caused to the window
frames, floor, walls and ceilings.
Tenants can reduce the risk of condensation by doing the following:
1. Open a window when you are cooking and keep lids on saucepans.
2. Leave the bathroom window open after a bath or shower to clear steam.
3. Keep the bathroom door shut when you are having a bath or shower.
4. Do not block air vents of airbricks.
5. Open windows in all your rooms for a few minutes each day to let some
fresh air circulate.
6. Leave some background heating on all day in cold weather.
7. Do not cover radiators or storage heaters with damp clothing.
New investment in the buy-to-let market has fallen by £20bn in two years as the lethal combination of tighter tax and mortgage rules has begun to take its toll on landlords.
Figures released yesterday by IMLA, the mortgage broker trade body, show that the value of new money raised to invest in buy-to-let properties has fallen by 80pc, from £25bn in 2015 to just £5bn in 2017.
In that period, a series of reforms have had a punitive effect on landlords. The stamp duty surcharge on additional properties was introduced in 2016, making expanding a portfolio more expensive, and the phased removal of mortgage interest relief which began last year has also squeezed profits.
Meanwhile some landlords now face an uphill battle getting mortgages at all, thanks to changes to lending restrictions ushered in by the Prudential Regulation Authority, a part of the Bank of England, at the tail end of last year.
There are currently 4.5 million people living in the private-rented sector and, IMLA warned that if demand continues to increase at current rates the crackdown on landlords may force average rents upwards.
Now introduced in Scotland , there are stringent new directives that must be adhered to for any business that would fairly be described as a letting Agent or some derivative thereof. These set out standards of practise which should ensure that all Agents are fully equipped to provide a professional service and that as an industry a benchmark level is implemented across the board.
The areas covered are : Approved system for the handling of client money , both tenants and landlords alike. All Agents having professional Indemnity Insurance . Agents being listed on a register of approved businesses. This approval being dependent on certain basic training standards being met.
Ministers will have the power to obtain the necessary proof that compliance has been observed and powers to address any breaches of the code.
Agents must have written processes to cover the need for identity checks , proof of ownership , reference checks , proper tenancy agreements , management of the properties , key handling and staff training.
Agents must have detailed records of all qualifications held by the principal , Partner or Director who would have hands on responsibility for overseeing the actual letting process or active involvement in same. Such persons must have a plan for continuing professional development and staff training .
All Agents must be in a position to offer a separate client account and must have client money protection insurance.
On December 1st 2017 the present assured and short assured tenancy will be replaced with a new tenancy regime hereafter referred to as a PRT. Our objective is to outline to you what this means for you as a landlord and should any points require additional clarification we would aim to be able to provide further specifics on request
Let us look at the main points in turn :
The Scottish Government has produced a model lease which contains two types of clauses.These are either Mandatory and must form part of the PRT or Discretionary and can either form part of the agreement or not . Please note , it is not compulsory to use the model tenancy agreement but all PRT leases must contain certain statutory terms.
Edinburgh has become a so called party flat mecca for certain property owners who are offering these properties for stag dos and the like. The consequent issues of noise and anti social behaviour have been affecting residents across the City and not unreasonably they want to know how and when its going to stop. The most obvious solution might be to have the Short term letting market handled solely by Agents but its hard to see how that could be enforced. BBCs Panorama is launching an investigation into the rise of this new phenomena and discussing its consequences on the lives of those most affected by it.
Many commentators refer to the supposed sea change in peoples approach to property. The commonly held view that it is a lifestyle choice and offers greater flexibility and freedom of movement might indeed be true for some but a recent survey commissioned by Go Compare mortgages suggests a somewhat different picture.
A third of tenants in the survey cannot envisage ever owning their own home , not because they do not wish to do so but because they cannot see how it might be financially possible. This is linked to the rise in rents which further erodes their capacity to save for a deposit. So are rents in fact rising ?
21% of this sample thought that because of the restriction of interest tax relief on buy to let mortgages it would lead to a reduction in the supply of rental properties in their area and as part proof of this has either experienced a rent increase or been advised that one was likely in the near future.
This is the true dilemma of the housing market. Rising rents because of reduced supply versus stagnant wage rate growth. Its an issue the Government will have to grapple with in the years ahead to avoid a housing crisis and there is plenty of coverage on this topic to be found elsewhere.
https://www.sundaypost.com/fp/class-divide-in-fire-safety-laws/ [Read more…]
Major overhaul to Making Tax Digital plans
21 July 2017
Under UK government proposals, landlords with a turnover above £10,000 were going to be required to keep financial records digitally using specialist software and send HMRC quarterly updates on their tax affairs.
We are pleased to report that in response to concerns raised about the scope and pace of reforms, the government is making the following changes to the requirements: –
• Only businesses with a turnover above the VAT threshold (currently £85,000) will need to keep digital records and only for VAT purposes
• They will only need to do so from April 2019
• Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least April 2020.
These changes mean that for the time being most landlords are removed from the scope of the requirements. It is possible that the requirements will be extended to smaller businesses and landlords in the future, but this will not be until April 2020 at the earliest.