The Rt Hon Michael Gove MP is trying to do what is right.
His target is second homeowners who abuse the tax system and leave properties empty while declaring they are let as holiday homes. From April 2023 these owners must prove they let their property for 70-days to qualify for business rate status , small business rates relief and exemption from council tax.
Michael Gove said: “The government backs small businesses, including responsible short-term letting, which attracts tourists and brings significant investment to local communities.
However, we will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost.”
‘But will some landlords fall foul of the new rules simply because they do not have the knowledge or expertise on how the new regulation will apply?’
We asked Debbie Pennell, Associate Director at Caxtons who heads up their Residential Lettings and Management Department that, and a few other questions.
Debbie: “It is very easy for a residential landlord to miss vital changes to legislation – there are so many rules and regulations applicable to the sector. And there are more in the pipeline. So yes, I think some will be found culpable by accident, rather than design. I see it as my job, and the job of my team here at Caxtons, to keep all our landlords fully informed and compliant. This avoids them inadvertently being in breach of the law when they could incur costly penalties. The recent Levelling Up White Paper – presenting policy preferences before the government introduces legislation – insists that landlords ensure their private rental properties meet the Decent Homes Standard, which was originally designed for social housing. It also plans to end Section 21 repossessions, consult on a national register of landlords and develop plans to tackle rogue landlords more effectively.
‘So, can you reassure new landlords who want property management, that Caxtons is the right firm for them?
“We pride ourselves on the wealth of in-house expertise and knowledge we have. Caxtons is a multi-disciplinary
property firm, so the answer to a difficult question is usually just an internal call away.
“For instance, if you’re looking to enter the buy-to-let market, but have enough deposit to spread the risk and buy two properties rather than one, this would circumvent void periods in the future. If you are a first-time residential
property investor, we can advise you on the best way forward – student or professional; flat or house.
“Or maybe, you’re an existing landlord and self-management is getting too complicated – not surprising with the plethora of existing and new legislation, rules, regulations and responsibilities. We could provide you with a cost benefit proposal for full management to leave you worry free while Caxtons’ experts take the burden from your shoulders. Many existing landlords – whether individual or multi-property portfolio owners – rely on a full management option because who wants to get a call at 5 a.m. to say that their tenant has a flood and they need a plumber. That is what an agent is for!
“Sometimes landlords need help with how to get the best return on their investment, we can help. While being a landlord should always be viewed as a long term investment, rental income and property in general is far outperforming other investment options at the moment. Where rental is concerned, this is predicted to continue to rise for some time to come. Tenants are finding it harder to save for a deposit to buy so trends are veering to longer rental periods and older tenants.
‘Is Caxtons regulated by any particular organisation?’
“In order to keep apace of advice from sector bodies and best practice, Caxtons is a member of the Royal Institution of Chartered Surveyors (RICS), a member of the Association of Residential Letting Agents (ARLA), the Association of Residential Managing Agents (ARMA), the Tenancy Deposit Scheme (TDS), the National Approved Letting Scheme (NALS), the UK Landlord Accreditation Partnership, the London Landlord Accreditation Scheme and is regulated by the Financial Conduct Authority (FCA).
‘Do you have any final advice for landlords?’
“If you don’t have a full property management service with Caxtons, be aware of updates and changes to legislation governing the private rental sector. One major change that will be upon us before we know it is the 2025 government target to make new domestic tenancies illegal if the property does not meet a minimum Energy Performance Certificate ‘C’ rating. We will keep our landlords posted on any information as soon as it is available.
“Our duty of care is to safeguard both the landlord and the tenants; to ensure we protect landlords from unforced errors – because legislation can sometimes be difficult to navigate – while keeping tenants happy and secure.
“I believe one of the greatest benefits of working with Caxtons is that we invest in expertise and continue to educate ourselves. That is one reason that we have sponsored and authored the Kent Property Market Report for the past nine years. 2022 will be the 10th year that we have worked in partnership with Kent County Council and Locate in Kent to bring some of the most interesting property investment and developments of our area into the light and make them available to anyone who is interested. Potential landlords would find the Report useful to uncover which areas are attracting the most inward investment; new commercial expansion; highest rents; where new builds are planned. This is why we command the competitive edge.
“Having said all that, Caxtons is still a people business and, unlike national agents, every one of my residential lettings team has a name and every client knows who their contact is. We are always pleased to hear from clients and it’s in our interest to help each and every one of them.
“It has taken more than 30 years to earn our enviable reputation of being trustworthy and dependable right across the business – and it is not in our interest to change that anytime soon.”
Debbie Pennell, Associate Director & heads of Residential Lettings and Management Department