National Landlords Association NLA News & Update Richard Blanco, NLA Representative

In Today’s Update Tax Changes Timeline & Update Brexit Implications Regulation –Client Money Protection, Electrical safety, ‘Green Tax,’ HPA Implementation –Update on licensing across London Mayor of London’s Plans House Prices, Repossesion & Rental Increase Stats

Tax Changes Now In Force –Replacement Furniture Relief (replaced wear and tear allowance) affects 47% of us –3% stamp duty surcharge on additional properties –8% CGT levy Still To Come –Withdrawal of 40% and 45% mortgage interest relief begins 1 April 2017 –25% withdrawal per year over 4 years –By 1 April 2021 only 20% relief can be claimed

Tax Changes Update Judicial Review permission hearing held and permission to proceed denied Some landlords are proposing a campaign to raise rents

Implications Of Brexit On Construction –Fall in share prices and gating of commercial funds –Larger construction projects have stalled according to Grafton Group (Selco, Buildbase & Plumbase) –Lobbying for removal of 3% SDLT surcharge On House Prices –To July 12.3%, Rents 3% (in London) –Micro markets –Bank of England predicts small fall –Mortgage approvals at an 18 month low –Supply is almost at a 30 year low

Implications Of Brexit Reduction in Bank Base Rate to 0.25% –Great time to remortgage Pound down by 15% –Renewed interest from overseas investors –SDLT 6 x £250,000 = £60,000 –SDLT 1 x £1.5million = £138,750 Change In Government Policy? –Possible removal of 3% surcharge –Build to Rent vs Landlords vs Homeowners –Autumn Statement 23 November

Brexit Unknowns Hard or Soft Brexit? Article 50 in March 2017…… so 2019? Recession? Inflation? Wages? Will PRS decline?

Housing & Planning Act Civil Penalties Extension of Rent Repayment Orders A revised fit & proper person test Wider availability of tenancy deposit data For Consultation… –Electrical Safety –Client Money Protection –Abandonment –Banning Offences & Orders –Rogue Landlord Database

Implementation Sharing of deposit data with LAs begins end of 2016 Banning offences and orders are set to come into force from Oct 2017 following consultation Mandatory Client Money Protection –Government has established a working group –No Policy As Yet On Electrical Safety Tests –Likely mandatory fixed wiring test every 5 years, PAT tests still uncertain –Reassured there will be long lead in time

Other Regulatory News ‘Green Tax’ –Landlords won’t be able to start or renew tenancy in property with EPC F or G rating from April 2018 –Landlord must spend up to £5,000 to bring it up to an E rating, thereafter be exempt…. –Government is consulting, NLA is opposed Don’t lose your right to serve a Section 21 –EPC, DPC, Gas Safety Cert, How To Rent Guide –Only 40% of landlords are doing this –Test smoke alarms too

Other Regulatory News Bank of England Regulation of Buy To Let –Compulsory stress test of 5.5% (commercial exempt) –Some lenders have increased rental cover to 145% –New criteria for portfolio landlords –Will affect maximum loan to value in London Rent Smart Wales –Deadline for registering/licensing is 23 November –Compulsory accreditation –Fees are £33.50 and £144 –Only 10% of landlords had registered by July

Licensing Update Think Before You Buy –7 Boroughs have Article 4 Directions in London –19 Boroughs consulting on or have implemented licensing schemes – Redbridge –Two proposed schemes SL in 2 or 14 wards –Unclear about AL – say they will borough wide –Consulting until 16 October 2016 (fees £250/£500) –Hinted they are looking at Article 4

Licensing Update Havering –expected to begin consultation on Selective Licensing in 3 wards then borough wide this Autumn. –Introduced Article 4 on 13 July 2016 Newham considering options on licensing –Current scheme ends on 31 December 2017 –20% restriction applies on selective licensing (or secretary of state permission required)

Mayor Of London’s Plans More moderate than initial wishlist Discretionary Licensing –Common framework, more consistency, incentives London Rental Standard –Boris record was poor, but keen on accreditation Support Build to Rent Naming & shaming bad landlords London wide lettings agency –Aimed at market renters

Latest Possession Stats Q Possession claims down by 6% Repossession orders down by 4% Average time from claim to repossession by bailiff is 41 weeks

Inside Property Podcast New monthly podcast First episode on Brexit and investing insideproperty.org.uk

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What do you think? Time For Questions Richard Blanco, NLA London Representative Blog at