Landlord & Buy-to-Let Magazine Issue 69, November 2016 | Page 20

For latest show news visit www.landlordshow.info industry news Tenants face rent rises over tax hike Two thirds of landlords plan to increase rents to cope with recent tax increases on the private rented sector according to a major new survey. The survey of almost 3,000 private sector landlords carried out by the Residential Landlords Association (RLA) also found that the same proportion do not plan on purchasing any additional properties for their portfolio . Nearly a third of landlords are considering leaving the market altogether. This is despite predictions that one million new homes to rent will be needed by 2021 and evidence showing that institutional investors in the rental market are not delivering the homes needed. With the majority of landlords (56%) planning to increase rents in the next 12 months to offset the impact of changes to mortgage interest relief, the policy will most negatively impact families, with 63% of landlords reporting letting to tenants with at least one child. There are also likely to be cutbacks in raising the standard of existing properties with 58% saying the tax rises will hit their plans for investment in their properties. Recent tax changes have included restricting the payment of mortgage interest relief to the basic rate of income tax, an extra 3 percent stamp duty on the purchase of homes to rent and taxing landlords’ income and not their profit. A majority of landlords (54%) do not have confidence in the future of the sector with 70%, anticipating further government policies aimed at landlords in the near future. Other figures from the survey show the sector defying some of the perceptions it often attracts. A huge 86% of landlords reported they had a good relationship with their tenant with almost as many (82%) reporting that their tenants pay their rent on time. The current average tenancy period is 3 years suggesting the majority of tenants are happy and secure in their current home. Nearly three quarters of landlords (73%) have not attempted to remove tenants from their property in the last 12 months and of those who have, most (70%) were because of rent arrears or abuse of the tenancy and only 3% were related to a rent increase. The RLA is calling on the new Chancellor to review the tax changes made by his predecessor and get behind the nation’s landlords and encourage more homes to be developed for rent to meet the demand. Commenting on the survey, the RLA Policy Director, David Smith, said: “These results show how perverse recent tax changes have been. By implementing policy that will increase rents and choke off the supply of homes to rent, the Government is making it more difficult for tenants to save for a home of their own. “We are calling on the Chancellor to use the Autumn Statement to hit the reset button.” The 2016 Chancellor’s Autumn Statement is planned for 23rd November. From beehives to freezers - tenants on the take New research by landlord insurer Direct Line for Business reveals that nearly one in three (30 per cent) people who have rented a property in the last five years think it is acceptable to take items that don’t belong to them when they move out. Some of the more common things tenants have removed from their rental properties have included fridges, freezers, light fittings, televisions and sinks. Some of the reasons for taking items from rented properties included believing that the landlord wouldn’t notice that the item was missing, taking items by accident and forgetting that the item was not theirs. However, the most common excuse – given by more than a fifth of respondents who admitted that they had stolen items – was simply that they wanted to take the items. The cost to the landlord of replacing these items adds up, with tenants estimating that the overall value of items they had taken from a property stands at over £500. Nick Breton, Head of Direct Line for Business, said: “The range of items that tenants feel that they can take with them when vacating a property is quite amazing. It isn’t even just small items that go missing; our research found that renters are helping themselves to beds, sofas and cupboards once their tenancy agreement comes to an end. These are expensive to replace and could have a knock-on effect for future tenants of that property. Plus a tenant could find that they lose their deposit.” The research also revealed that one in five (21 per cent) respondents who have stolen goods said they did not complete 18 Landlord & Buy-to-Let Issue 69 • November 2016 an inventory when they moved into the property. However, almost a quarter (23 per cent) admitted that all of the items they removed were listed on the inventory but this did not deter them from taking the items. The research also identified some very unusual items that were taken from rental properties including coconuts, a beehive and a rolling pin. Nick Breton continued: “The research highlights the importance of having a thorough inventory before your property is vacated. Building a relationship with your tenants is a bonus and can open up communication which could minimise issues further down the line. If the property is furnished then make sure you have the right insurance in place so you’re covered should things go missing – like the kitchen sink!”