Its time for our Friday Newsround, in what has been a fairly slow week in housing news, we see what has hit the headlines this week.
Bank base rate rises to 5.00%
As you will probably know, the bank base rate was increased yesterday – for the 13th successive time. A move which will affect both homeowners and landlords with properties on mortgage.
It is predicted that interest rates will rise further during 2023.
But it seems that there will be no tax relief on mortgage interest payments for landlords or homeowners. Andrew Griffith, Economic Secretary to the Treasury has said
This Government [will] not come forward with the sort of unfunded spending commitments that we see on the Labour Benches.
Michael Gove has also been reprimanded by Rishi Sunak for suggesting that we should move to long-term mortgages on fixed rates like other countries, which would protect the housing market from the turmoil we are currently in.
And a mortgage expert has warned that a housing market crash is ‘inevitable’. Happy days!
Renters lie on applications
It appears that there is now a league table of where prospective tenants have most frequently lied on their application forms. Comparethemarket say 26% have admitted lying on their home rental application form and 39% have said that they would consider lying.
The report details that the younger generation are more likely to lie with 43% of 16-34year olds having lied, while least likely are the over 55’s. The report goes even further and narrows it down to regions most likely to lie as well, with Newcastle, Norwich and Manchester being the highest and Plymouth the lowest at only 5%.
Smoking status is the most common lie, with having a pet coming a close second. 6% have also lied about income.
A spokeswoman for Comparethemarket said
Surprisingly, almost one-third of renters are unaware of the implications that lying on a rental application form could have. While these do differ depending on the situation, the likelihood is that if you’re caught lying, your application will be rejected. If your application is discovered fraudulent after you have moved into the property, there may also be grounds for eviction.
This goes to show that a landlord should always double check and cross reference all the information provided.
Landlord tax system review to support long-term renting
Julie James, the Welsh Minister for housing, has said that the taxation of the private rented sector in is need of a review and is keen to ensure that it provides for long-term homes to rent. This goes in hand as a new report show that 76% of Welsh landlords have seen an increase in the demand for rental properties in the first quarter of 2023; however, 48% of landlords have said that they plan to cut the number of properties they let.
The NRLA has called upon the Welsh Government to exempt the purchase of additional homes for long-term rent from the 4% Land Transaction Tax and for Wales to have better data about the state of the private rented sector in Wales. Ben Beadle of the NRLA says
Wales needs a strong and vibrant rented sector. We welcome the Minister’s openness to look at how the tax system can support the provision of homes tenants need.
It is welcome too that the Minister has agreed in principle with the NRLA’s call for a Welsh Housing Survey. Too often good decisions have been hampered by a lack of robust data on the state of the rental market. We will continue to work with the Government to ensure policy is rooted in evidence and what works for responsible landlords and tenants.
Years of anti-landlord reforms brings supply chain to a halt
The Home Index, which produces a monthly report of the rental market, shows that there is now a large imbalance between supply and demand and is a consequence of years of anti-landlord reforms. The report says
Rents continue to rise overall. The mix-adjusted average annualised rise for the UK stands at 11.4 per cent. Supply remains tight in the face of overwhelming demand.
This is undoubtedly the unintended consequence of many years of landlord disincentivisation through increased taxation and regulation. The levelling up agenda has, ironically, made it even more difficult for renters to get a foot on the property ladder while rising rents gobble up any spare cash they might have had.Meanwhile, the HMRC is clearly the main beneficiary, along with local councils and their costly yet mandatory registration schemes.
It does not look good for the private rented sector.
Snippets
Welsh minister backs review of existing hight stamp duty rates for landlords
Notorious landlord hit with £166k legal bill after loosing court battle
Agents fined almost £79,000 for letting unlicensed and unsafe HMO property
Six letting agents fined after council clampdown
Courts embarrassing, slow and make odd decisions says top lawyer
REFORM: ‘We need legislation that works with landlords, not against them’
Landlord secures huge victory in £18,000 Rent Repayment Order case
Watch Out! Landlords warned of summer subsidence threat
Newsround will be back next week.