Tenants with pets have been some of my best lets, and because many other landlords do not accept them, it means some have stayed longer than usual. The new proposals allow for landlords to demand mandatory pet insurance. What that will cover remains to be seen, but it’s doubtful any animal will ever cause the damage to a property any human can inflict.
If I sound sanguine, don’t be fooled. Despite the fact that rent controls are off the agenda, it’s the talk of the ombudsman which worries me more. An ombudsman, as I understood the concept, is to be impartial. However, my reading of the proposed role is that it is worryingly one-sided in favour of the tenant.
The proposals state: “The new ombudsman will allow tenants to seek redress for free, where they have a complaint about their tenancy. This could include complaints about the behaviour of the landlord, the standards of the property or where repairs have not been completed within a reasonable timeframe. We will make membership of the ombudsman mandatory and local councils will be able to take enforcement action against landlords that fail to join the ombudsman.”
It added: “The ombudsman will have powers to put things right for tenants, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.”
The words punitive and risky spring to mind. Buried in the small print is the belief that landlords should provide properties where the kitchen and bathroom are “not too old”. There is no reference to if the services are satisfactory – just the age. In an era of high inflation, and when materials and labour costs have already increased by 25pc in the last two years, replacing such items when not strictly necessary will be costly and time-consuming.
The threat of an ombudsman who would “be able to require landlords to reimburse rent to tenants where the service or standard of property they provide falls short of the mark” is alarming. This is before we even mention those tenants who don’t look after properties, and who would be to blame?
What makes me most uncomfortable is the tone of these proposals, rather than the contents. By its own admission, the Government is aware that the vast majority of tenants are happy in their accommodation. So it is unclear why underlying much of the points (many of which I agree with) is a thinly-veiled argument that landlords must comply… or else.
It is this attitude towards landlords that I take exception to. It feels as if the battle lines have been drawn, and that we should expect a lot more layers of bureaucracy and tax crackdowns if we want to remain landlords for the long run.
OZARK, Mo. (KY3) – Rent and housing markets skyrocketed over the past year making it harder to find a place to live.
Lori Hilt is living in Ozark but is looking to be on the move.
“Someone is taking advantage, I mean, the housing markets ridiculous,” said Hilt.
Hilt said finding a place to afford is hard.
”The same house two years ago to the date, they’ve doubled in what you would pay for them now,” said Hilt.
Hilt is one of many facing the housing and renting crisis, with price hikes everywhere you turn. Hilt said her rent has gone up over the years, and she is being forced to leave, making her spend most of her day looking at listings.
” I spent about five to six hours each day,” said Hilt.
Sonya Wells, the owner of The Firm Real Estate LLC, said the current situation goes back to supply and demand.
”There’s been such a big influx of for a need of rentals that people are scrapping around trying to find places,” said Wells.
Wells said she has been in this market since 1988, and the combination of the pandemic, construction prices, supply chain issues, and more is a large storm to tackle.
”It’s just a strange market,” said Wells. “I mean, it’s kind of one of the strangest markets I’ve ever seen.”
Hilt said this strange market has been a burden.
”Nothing you can do,” said Hilt. “If I had kids that were young, I would be having panic attacks.”
Hilt said she does have a safety net of going and living with family but doesn’t see how young struggling families can go through this and hopes for change.
”I don’t know where people go, and I just think that’s wrong,” said Hilt. “We can do better than that. The fact that we’re allowing this to happen kind of is really aggravating.”
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Homeowners can also benefit from a residence nil-rate band of £175,000 on top of the nil-rate band, if they are passing their primary home to a direct descendant.
This threshold has increased with inflation since it was introduced in 2017, but the Chancellor last year announced that it will be frozen until 2026. This means there will be no allowance for the fact that in April, house prices climbed year-on-year by 12.4pc.
Julia Rosenbloom, of Evelyn Partners, a wealth management service, said: “Given that the nil-rate band and residence nil-rate band have been frozen until at least April 2026, many more will fall into this tax trap.”
Mr Sunak has also frozen the thresholds for income tax, capital gains tax and the pensions lifetime allowance, costing taxpayers thousands in a phenomenon known by economists as fiscal drag.
The inheritance tax is frozen until 2025-26, meaning a family paying tax on a £600,000 estate will pay £13,500 more by the end of the period than they would if it had risen with inflation.
The fresh calls for tax cuts came as HMRC data showed that the difference between the total amount of tax expected and that which is actually paid, was £32bn in 2020/21.
Failure to take reasonable care, criminal attacks, non-payment and evasion were among the main reasons for the “tax gap” in 2020/21 in terms of behaviour.
In terms of customers, small businesses were responsible for nearly half of the tax gap, at around £15.6bn, according to HMRC’s data.
Criminals accounted for £5.2bn of the gap, while medium-sized businesses made up £3.9bn and large businesses accounted for £3.6bn.
HMRC’s publication excluded estimates of error and fraud in the Covid support schemes.
The latest estimate from the Business Department is that, in total, £4.9bn of taxpayers’ money will be lost to Covid fraud.
The scale of the fraud has already led to the resignation of Lord Agnew in January. He said the management of fraud during the pandemic had been “nothing less than woeful”.
David Fell, of Hamptons, said: “As a crude rule of thumb, a rate rise of one percentage point today exerts about twice the pressure on mortgaged household finances as the same rate rise would a decade ago.
“The sale of house price growth and mortgage debt taken on by households means that fairly limited base rate rises by historical standards have the ability to add significant pressure onto household finances.”
Bank Rate rises today will also have a higher impact because buyers have become accustomed to ultra-low rates. For the last 13 years, the Bank Rate has been below 1pc. The move into a higher interest rate environment is likely to have a much bigger impact on market sentiment, particularly in the context of the cost of living crisis, when buyers are seeing bills for food, energy and fuel soar.
The Bank Rate would need to rise to 7pc to have the same impact on household finances as the 17pc Bank Rate recorded in November 1979, Hamptons found.
With a 7pc Bank Rate, the average first-time buyer would have to spend 66pc of their monthly salary to cover a mortgage on an average home. At the peak of the Bank Rate in 1979, the share was only 63pc.
Lewis Shaw, of Shaw Financial Services, a mortgage broker, said: “We have a generation of homeowners that have never seen a typical base rate or the mortgage rates that flow from them. This means their frame of reference will now need to adjust and we all know that can be difficult.”
Electric vehicle infrastructure is relatively well-developed in central London, but in the suburbs the shortfall is acute. While in Westminster there are 2.5 electric vehicles for every public charging point, in Dacorum in Hertfordshire, the ratio is 57. Similarly in Elmbridge, Waverley and Mole Valley in Surrey, the respective ratios are 51, 46 and 45.
Lucian Cook, of Savills, said places where electric vehicle ownership greatly outnumbered charging points would see the biggest impact on home values.
He said: “As the gap between demand for electric cars and public charging points grows, we can expect to see homes that offer private charging provisions to come at a premium.”
Charles Davenport, of Knight Frank estate agents’ in Elmbridge, said off-street parking was becoming a deal-breaker for buyers with electric cars.
He said: “We had a house in Cobham and the couple looking at it had an electric car and they said sorry we can’t because there is no off-street parking and it is absolutely essential for us.” The biggest charger shortfalls are all in the extended London commuter belt in the South of England. Other hotspots include Tandridge and Woking in Surrey, as well as Reigate and Banstead, St Albans and Sevenoaks.
In two years, the combined number of electric cars has surged by 176pc, while the number of charging points has increased by only 72pc.
At the end of 2021, there were 14.75 electric vehicles for every charging point across the UK, compared to 6.35 at the end of 2019.