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Landlords licensing, register & build to let - LettingFocus.com

It’s looking increasingly likely that all private landlords in England and Wales will soon have to be registered before they can let residential property.
The costs are likely to be low at about £50 per annum and will cover all private landlords but, natch, it looks unlikely to apply to those models of efficiency, the social landlords!
For decent landlords it looks unlikely that you will have to do anything more than you do now, apart from have to pay another fee, of course.
This new idea comes on top of extra work like tenancy deposits, HIPs and getting an HMO license (if you operate in that sector). all of which have been introduced in the last 3 years.
GOOD LANDLORDS WONT NEED TO WORRY
Good landlords already carry out repairs and they don’t intimidate tenants. And why should they? After all, decent landlords want to keep decent tenants not lose them.
The intention from the government is that the system will operate with a “light touch” to root out rogue landlords, but another compliance cost and another level of bureaucracy will be just one more thing to scare off both would-be landlords and the new “accidental landlords” who have fallen into letting because they cannot sell their house.
No wonder most letting agents think it is a good idea as more and more novice landlords will be ever more likely chuck their lot in with a letting agent rather than read a book on letting property and learn to do it right themselves.
BUT IS THIS REALLY ABOUT GETTING TAX EVADERS?
It is likely that a landlord would get a licence number which would have to be shown on all documents related to a letting.
A spin off of all this is that it would make it easier for HMRC to identify tax evaders and many think this is the real driver behind the move - because it is well known that the taxman thinks lots of landlords are evading tax. (If that is the case, we suggest a trawl of Land Registry data to show multiple ownership would be a better starting point!)
LETTING FOCUS’S VIEW
At LettingFocus.com we say another piece of regulation on top of all the others probably wont hurt too much but how it will be implemented is key.
There are undoubtedly some bad landlords out there and weak letting agents too - and if this roots them out then that is for the good of society.
But if it is just another bit of bureacracy with no teeth that will further put off good landlords, then it will be a waste of time and money.
One can only hope that implementation is better than it was In Scotland, the land of Big Government, where they already have a landlords registration scheme.
There, in year one, only one in 6 landlords bothered to register at all and rogue landlords continue to ignore the scheme despite the penalties.
WHAT ABOUT IMPROVING THE LUMBERING COURTS PROCESS TO SPEED UP EVICTIONS?
Good landlords will also rightly question when something will be done to speed up their ability to recover their property from bad tenants which can take 6 months to go through the lumbering courts process all the way to bailiffs and an eviction.
Indeed recent figures show it is taking longer than ever as more people fall behind on rental payments.
SMALL LANDLORDS MISS OUT TO THE BIG BOYS - AND IT DOES NOT SEEM FAIR The proposal for landlords licensing falls out of the Rugg Report from last year but it’s a shame that the Government is not expected to back Rugg’s other call for tax relief for landlord repairs, such as new roofs, windows or boilers.
And hey, there are other plans afoot too because the Homes and Communities Agency has invited big property firms and other investors to support a fund to build lots more homes for rent – so called “build to let”.
I can see the logic of this. It would restart the house building sector and provide places for people to live. All good!
But what I object to is that the government seems to be negotiating incentives for big investors like stamp duty tax breaks or guarantees to underwrite rents on unfilled properties to get them on board.
This is unfair on two counts.
First, the Rugg report clearly said that small landlords do the job better.
Second, government incentives almost certainly will not be available to small scale landlords and so will penalise them and create an uneven playing field.
But can we be surprised?
The current government seems to be getting increasingly close to big business as we can see from other industries - just look at food retailing where Tesco and the other big boys have been allowed to wipe out the competition from the smaller players.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the property investing experts. Read Property Articles.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book.
The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing and capital gains taxes.
I’m an expert property writer and property speaker - and I run the well known landlords blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general advice on property letting and consulting to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we offer independent unbiased property advice because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
On the contrary, we are often asked to evaluate other property investments.
Find out about some great deals we have arranged at our Landlords Links page.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
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  1. Anonymous Anonymous | 1:22 PM |  

    Hi David

    Surely licensing will restrict the entry of new landlords into the market - hence driving rents up? What happens if a landlord is struck off - will all their tenants get immediately evicted? In whose interest is that? Why not extend tax relief to include refurbs and upgrades on property to raise the standard of accommodation? And aren't replacement windows and boilers already tax deductible?

    Douglas, Sussex

  2. Blogger lettingfocus | 1:44 PM |  

    Some good points there.
    Regardsing whether new boilers are or are not tax deductible against rental income, that is a very grey area. See:
    http://www.lettingfocus.com/2009/03/lesa-landlords-energy-saving-allowance.html
    Regards
    David Lawrenson

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