Tessa Shepperson Newsround #40

Friday again.  Lets see what news items we can find.

Crisis in buy to let?

There are a lot of articles around just now, such as this one, saying that landlords are selling up and moving out of the Private Rented Sector largely due to issues with increased tax burdens and increased regulation which is putting them off.

However, on the other hand, we have this article in Landlord Today which says that although being a landlord may not be as profitable as it was before:

• The impact of the tax changes has been greatly  exaggerated
• There is a difference between ‘deciding’ to sell up and actually doing it
• Around 30% landlords are accidental and are likely to remain, and most importantly
• What other investments are there with the sort of return you get from rented property?

Needless to say, these conclusions, especially those on tax, are disputed in the post comments.

Increasing Rent

The other response to the problems facing landlords is to increase the rent.

It looks as if this is happening especially in the East Midlands and the Eastern Counties.

The Problems with Planning

Mrs May has recently criticised Local Authorities for being ‘anti-development’.  However, this article in the Guardian by Ben Rodgers argues that the problem is much more complicated.

For a start, there is a lack of expertise in Councils, something which has been happening over the past 40 years or so (which I discussed in my post here.)

In 1976, 49% of UK architects worked for the public sector. Today it is 0.9%, and only 0.2% in London. Over the same period, important roles in planning departments, including those of architect-planner, borough architect and chief planner, have simply disappeared.

Which, Rogers continues

marks a loss of public sector capacity to engage with local residents, to plan and design new schemes, or to effectively engage with private developers. Master plans can be commissioned from world-leading architects, and housing can be built by joint ventures, housing associations or private developers, but if borough planners are struggling to keep up with their day-to-day workload of applications, councils lose the ability to carry out strategic planning or to ensure that developers deliver on their commitments.

Many Councils are being innovative with the resources they have, but Rogers argues that

we won’t get the new housing we need without well-resourced, highly skilled and locally engaged planning departments. And that requires the government to acknowledge a deeper problem at the heart of our planning system.

Unfair CCJs?

The number of CCJs (many of which will be for rent arrears) rose by 59% over the past 4 years and the Ministry of Justice consulted last year on reforms to protect the public.  However, the general view among the respondents to the consultation seems to have been that the Ministry’s proposals did not go far enough.

Top things that worried them were

• the effort needed to dismiss a case and
• the time that judgments stay on an individual’s record

The Law Society Gazette reported recently on some of the responses:

The Law Society

said that consumers should be alerted of claims by email as well as post, and that they should also be able to carry out a free online search for any judgments against them. The Society added: ‘We suggest action could be taken to provide clearer public information, educating consumers of how and when they may be able to set aside default judgments.’

The Bar Council

said the proposals will result in the ‘unsatisfactory’ situation of a claim remaining on the register for many years, even it was served at an incorrect address. The body said it ‘does not consider that it is satisfactory that a CCJ should remain on a consumer’s credit record where they have been served at an address at which the consumer does not reside.’

The council also suggested creating a specific process for setting aside default judgment when service has been made to an incorrect address.

The Civil Justice Council

welcomed the proposals but criticised the length of time (six years) that a judgment stays on a person’s record. A six-year register entry ‘and subsequent poor credit’ rating is onerous in some circumstances, it said, suggesting a system where the length of registration is linked to the value of the debt.

We will have to see what responses if any the Ministry makes to all this.

A campaign to axe VAT on landlord safety products

This, reported on Property Industry Eye is a petition which has been launched asking the government to exercise its discretion to remove VAT on various safety products including Gas Safety Certificates.

Of course, it is not specifically aimed to help landlords as such, it is aimed at ‘safety products & services for residential homes’.  However, landlords would be a major beneficially of such a change.

The campaign is supported by various celebrities including Ultravox singer Midge Ure, former Liverpool, England footballer Jamie Carragher and West End actress Carley Stenson (all of whom I suspect may have invested some of their earnings in the property market).

The campaign makes the very valid point that MOT inspections are zero rates as they save lives.  Items highlighted on the petition page to be zero-rated are smoke alarms, annual gas safety checks, fire blankets, and carbon monoxide detectors.

You can sign the petition here.

Robotic agent

Finally, if you are looking to buy a property – do you find the idea of talking to an estate agent to awful to contemplate?

Fear not, an entrepreneur is developing a chat box you can talk to instead.  Find out more here.

Newsround will be back next week.