Labour Government

I thought it would be interesting to look to the future and see how we will be renting flats in 5+ years time. There are two certainties that we can predict – firstly there won’t be a recession, it beggars belief that we could go a decade or more with a stagnant economy, so I think that it will be safe to assume some sort of economic recovery will have been underway. Secondly there will be a change of government in 2015 – whether the coalition implodes, explodes, or simply fades away I think it is a safe assumption that we will NOT have a centre right government running the show. I will readily concede that it’s not clear whether we will lurch to the left or right, but I think the most likely outcome in 2015 will be a labour government. Helped by three recent publications of the Labour Party Policy views on Housing we can see what renting in the next decade will be like.

Private Rental Sector (PRS) Center Stage

There are some very big surprises – not least that the documents lay out a future for housing which would surprise a labour supporter of the 70s 80s or 90s – the Private Rental Sector (PRS) is center stage in providing homes. Labour is determined that everyone should have a home at a price they can afford, labelled A One Nation housing policy. It intends to achieve this by supporting renters and the majority who are responsible landlords, ensuring that they are not undercut by a minority of rogue landlords. However Labour also clearly sees the PRS in it’s current form as broken, and not working.

Labour acknowledges that most people want to own their own home, however Britain faces the biggest housing crisis in a generation and therefore many people will take longer to buy and will be renting for much longer than in the past. As a consequence, the private rented sector under Labour will play an ever increasing role in meeting housing need.

Private Rental Sector (PRS) Broken

Labour sees the PRS as not fit for purpose. It sees private renting as unaffordable, unstable and subject to poor conditions and bad management.

1. It sees a need to tackle unscrupulous letting agents and end rip-off charges.
2. It also wants to give renting families private rented homes that are affordable and stable, providing the predictability and security that allow families to plan ahead.
3. It considers that there are too many bad landlords who prey on vulnerable tenants and that 35% of private rented stock that is non-decent.
4. It also sees that the £8.6billion a year paid in Housing Benefit is going to private sector landlords who provide poor and sub-standard housing that ultimately serves to create further socio-economic costs for the public purse.
5. It also sees amateur landlords who are well meaning but unaware of their responsibilities as a problem.

Private Rental Sector (PRS) Solutions

Across the 3 policy documents there are some clear recommendations which are in part already being implemented by some local authorities, and are “Good to Go” as soon as the new government hits the road:

1. A National Register of Landlords

Interestingly HMRC is specifically associated with the register, and no doubt a lot of links will be tied up so that right to operate as a landlord, and use the legal system to recover debts, be paid housing benefit, recover possession of a property will be linked to being on the register, and paying tax on rental income (Landlord Tax Evasion is estimated at £500,000,000).

2. A National Private Rented Property Standard

This is a change from the Housing health and safety rating system (HHSRS) philosophy introduced in the 2004 Housing Act which moved away from prescribed standards, and made the Landlord responsible for assessing and implementing an appropriate level of Health and Safety. The review specifically identifies:

1. Tenancy deposits
2. Energy efficiency
3. Property conditions
4. Response times and repairs
5. Improved local enforcement intended to make it easier for local authorities to introduce licensing schemes

3. Tougher sanctions on bad landlords

1. Reviewing penalties and sentencing guidelines (expect major increases).
2. Stamping out retaliatory eviction.
3. Removing bad landlords from the national register so they can no longer operate.

4. Regulation of Letting Agencies

1. A code of code of conduct
2. Entry requirements for letting agents
3. Compulsory business and consumer protection measures.
4. A regulatory body with enforcement powers.
5. Transparency, clarity and accessibility of information relating to fees and charges which are easily understandable, upfront and comparable across agents
6. Restriction on the level and extent of activities that can be charged for, the size of deposits required in proportion to rent and the level of ‘administration’ fees for basic services, such as those for changing rental contracts.

5. New Laws on Tenancy Agreements

This area is potentially the most far reaching, and from a Socio-Economic POV a radical departure from the home owning model of the last few generations. Labour recognise that our society has changed. In previous generations education ended somewhere between 15 & 21, but currently the world of work seems to start somewhere north of 21, if ever. The home ownership model is now a thing for middle age, families are renting much as they did in Victorian times – however the tenancy contract used by landlords (The Assured Shorthold Tenancy Agreement) was designed in 1988 to be used specifically for accidental Landlords. It was intended solely to be used for the renting of property which would otherwise have stood empty whilst waiting to be sold, and the Assured Tenancy introduced in the same Housing Act was intended to be the Tenancy Agreement used by the PRS.

So 25 years later we have a PRS based  around a tenancy agreement designed for 6 month tenancies, but a requirement for 5 – 30 year tenancies. The only surprising thing is that Labour is the only political party to recognise this as a problem. Fortunately they also recognise that their 1977 attempt to create a level playing field was a disaster, and they make it clear that they will not be going down the road of regulated tenancies. The changes that they have indicated are less clear than in the other areas, but expect:

1. Incentives that will form part of a “something for something” deal for landlords
2. Direct payment of housing benefit to private sector landlords and housing associations who provide longer tenancies and predictable rents
3. An improved legal process for long lets to evict renters who fail to pay rent and commit anti-social behaviour, including damage to the property.
4. Current benefits of the tax system only available to landlords offering longer term stable tenancies.

Sources:

Labour Party Policy Reviews

Private Rented Housing: Improving standards for all

Private Rented Housing: Providing stability and affordability for renters and families

Private Rented Housing

Following the outstandingly successful first open-air, free concert in May 2012, the London Symphony Orchestra in partnership with BMW and the Mayor of London is returning to Trafalgar Square this year. The next annual BMW LSO Open Air Classics concert, which last year attracted an audience estimated in the press to be up to 10,000 people, will take place in the square on Monday 27 May 2013, Spring Bank Holiday Monday, at 6.30 pm. Principal Conductor of the LSO, Valery Gergiev will conduct an all-Berlioz programme. The aim of BMW LSO Open Air Classics is to bring outstanding music performed in the open air – free for everyone in an informal atmosphere.

Gergiev and the LSO will perform Berlioz’s Overture Le corsaire, and Berlioz’s Symphonie fantastique. In a performance of a specially arranged version of Berlioz’s Symphonie fantastique by Gareth Glyn 80 young musicians including conservatoire students and LSO On Track young musicians from LSO Discovery, the Orchestra’s award-winning music education and community programme, will play alongside the LSO players. LSO animateur and composer Rachel Leach will present the concert from the stage, guiding the audience through the music. Large screens will be mounted on either side of the stage to allow the audience to witness the concert up close.

Number 10 Downing Street garden tours (Saturday 8 June) has had a staggering 35,000 people have enter the ballot. The ballot will be drawn on Tuesday 21 May and 40 lucky people will be contacted by telephone, to let them know they have a place.

Open Garden Squares Weekend is a magical two-day event, where community gardens and private squares throughout London welcome visitors from around the world. Gardens range from historical private squares to contemporary roof gardens, and barges. One ticket gives access to numerous gardens on both Saturday 8 and Sunday 9 June 2013.  (Gardens open at various times, see www.opensquares.org for details).

The Secret Garden (Photo credit: @Doug88888)

Tours of the prisons and the River Cafe garden are now fully booked. A ticket can be booked here.

Central London Wednesday 17th April 2013

The funeral of Baroness Thatcher will take place on Wednesday 17th April. Tomorrow.

To facilitate the security operation for the funeral procession and service there will be road closures in place from early that morning.  The route of the funeral procession from Trafalgar Square to St Paul’s Cathedral will be lined with barriers.   

Large numbers may attend, and there is the potential that this may include some protest groups. 

Road closures will be lifted as soon as is possible but this may not be until after 12noon so please pay attention to TfL information. 

It is advisable that people travelling to and around London plan their journeys as their normal routes to work may not be accessible at certain times. Check with Transport for London for the latest travel advice.

……. I’m afraid that on July 1st Google Reader is closing. Now personally I am moving to Feedly.com as it seems to offer so much more than just an RSS reader. It brings in feeds from website RSS & other feeds and presents them in list, card and magazine formats – so I will be setting up my own news page.

If you want suggestions for an alternative RSS reader Lifehacker suggests that the best options are

NetVibes  the most popular web reader, offering a Google Reader-like interface as well as a snazzy iGoogle-like homepage.

NewsBlur , with an interface that’s very similar to Google Reader and Android and iOS apps that’ll sync your feeds. NewsBlur has suspended free accounts for the time being.

Feedly is popular, but definitely different than Google Reader. Its interface is less traditional and a bit more “newspaper-like,” but it’s very pretty. You can, however, get a more traditional Reader-like interface if you prefer. You need to download a browser extension for Chrome or Firefox to use it, but you’ll be able to sync your feeds between browsers and even to Feedly’s mobile apps.

The Old Reader a Google Reader lookalike.

Life Hacker’s Five Best Google Reader Alternatives

• Whilst the rest of the country had a recession, London’s economy grew by nearly 12.5% between 2007 and 2011 – twice as fast as the rest of the UK. 
• The value of London’s property had risen by 15% – or £140bn since the financial crisis began. London’s top ten boroughs alone are worth more, in real estate terms, than all the property of Wales, Scotland and Northern Ireland, added together.
• The average Londoner contributes 70% more to Britain’s national income than people in the rest of the country – a difference of £16,000 each a year.
• You can cover the 120-odd miles between London and Birmingham in a train in 84 minutes. Birmingham to Manchester is not much more than half the distance, but the fastest train between the two is 90 minutes. It’s only 40 miles from Manchester to Leeds, but the fastest train takes nearly an hour.

London – Capital of the World

Source

Landlords are a recent target for HMRC – in January the latest target was taxpayers who have failed to pay capital gains tax on the sale of second homes & Taxpayers will have until 9th August 2013 to disclose to HMRC details of unpaid capital gains tax on the sale of second homes and up to 6th September 2013 to settle the unpaid tax. HMRC will charge a lower penalty to taxpayers who come forward voluntarily. There may be some taxpayers who may not be aware that they owe tax because they do not know the rules. In particular:-

•The taxpayer(s) may have gifted their second property to a relative (i.e. son or daughter). In this circumstance, capital gains tax could be payable with the open market value of the property at the time of the transfer forming the sales proceeds in the transaction;

•The taxpayer(s) may have lived in the property before moving to a new home. Instead of selling the property, the taxpayer(s) rent out the property to tenants. The Principal Private Residence Relief will not apply to the property when the taxpayer(s) move to their new home so some capital gains tax, relating to the period of non-residence, could be due.

How does the Taxman identify Property Tax Evasion?

•CENSUS – The 2011 census revealed a large number of UK citizens who own a second home including homes abroad;
•BANKS – Now have to provide more information to HMRC;
•PROPERTY WEBSITES – Can give readers an indication of the capital uplift in the value of the house since the last transaction;
•OTHER WEBSITES – Sites such [url=http://www.192.com]Search for People, Businesses and Places – 192.com[/url] contain information from Land Registry showing the value of the last transaction on the property;
•CREDIT AGENCIES – Are required to give details of loans and mortgages linking them to names and addresses;
•DATABASES – HMRC can search databases such as the Northgate Public Services System which shows details of housing benefits paid to landlords by any UK Council;
•LAND REGISTRY – HMRC can ascertain who owns any particular property and details of any sale proceeds;
•ELECTORAL REGISTER – Can ascertain who lives at a particular property;
•PURCHASE DOCUMENTS – These documents should now disclose the National Insurance and Ultimate Tax Reference for individuals and/or VAT numbers for companies and partnerships.

Connect Computer System

HMRC will then use their Connect Computer System to draw all this information together so that they can correctly target taxpayers. It is understood that HMRC have ALREADY used all of this available data to check over 10m property transactions.

When Mike Wells touches a button on his keyboard, a tangle of tiny lines bursts on to his computer screen. Within seconds, it weaves an elongated spider’s web connecting small graphic symbols representing people, addresses, phone numbers, bank accounts and employers.

When he clicks on an icon, another maze of connections ripples across the screen. At a glance, a skilled investigator can detect a pattern of concealment. Wells, director of risk and intelligences services at HM Revenue & Customs, says: “Over time you get familiar with a normal person’s spidergram. When someone is operating in a hidden economy it has a different shape.”
This is the tax authority’s “breakthrough” computer system, a new, powerful weapon against the fraud, evasion and avoidance that costs the Exchequer billions of pounds every year. The system – known prosaically as Connect – was designed by defence contractor BAE Systems and launched in the summer of 2010. It cost HMRC £45m, but even by 2011 it had delivered £1.4bn of additional revenues, according to the National Audit Office. Wells says: “Its power is making it so much harder to hide from us.”

Six out of ten inquiries now make use of the system, with investigators working “hand in hand” with 3,000 Connect analysts in offices up and down the country. It uses a mathematical technique known as social network analysis that ploughs through disparate, previously unrelated information to detect otherwise invisible networks of relationships. It automates analysis that would once have taken months, if it could have been done at all. “If a human being tried to plough through 26 databases, they just couldn’t do it,” says Wells.

Connect is an appropriate name. HMRC has a unrivalled wealth of information about people living in Britain, due in part to its many connections with other databases, such as the Land Registry, Companies House and the electoral roll. “We have more data than the British Library,” says Wells, adding that the HMRC website is one of the world’s biggest websites at peak filing time.

Access to such comprehensive data does not just allow investigators to spot anomalies. It also makes it much easier for HMRC to check up on individuals’ tax returns. Take inheritance tax, where HMRC receives about 300,000 paper returns every year. Around 200,000 of those come from estates claiming to be below the taxpaying threshold.

Using Connect, HMRC can sift through information on property transactions, company ownerships, loans, bank accounts, employment history and self-assessment records to spot where estates might be under-declaring. In its first year it raised an extra £26m in inheritance tax.

Informers

Disgruntled Tenants paying cash are the Taxman’s best friend. City law firm Reynolds Porter Chamberlain (RPC) says HMRC paid out 21 per cent more to informers in the tax year to April 2012 than the £309,620 in the previous year. “HMRC is under intense pressure from the Treasury to increase the tax yield for the Exchequer and it is increasingly resorting to unorthodox methods to get the job done,” says Adam Craggs, tax partner at RPC. “Other informers include those reporting someone bragging in the pub or doing a lot of jobs cash-in-hand.”. Rewards vary from a few hundreds to tens of thousands of pounds, but are paid only once tax has been recovered – and payments are not a fixed percentage of the tax recouped.

Third Party And Online Information

HMRC has recently beefed up its powers to demand “bulk” information from businesses or government agencies. In 2008 it homed in on the medical profession, acquiring information from National Health Service trusts, private hospitals and medical insurance companies to test its suspicions that practitioners were failing to declare fees for consultations, medical examinations and other services. Plumbers and heating engineers have also been targeted, after HMRC obtained information from the Gas Safe register. This trawl resulted in five arrests. The tax authority’s access to Land Registry and DVLA data means it knows how much someone has spent on their house and can see vehicles registered to each address. If someone has bought a Ferrari but is living in a modest flat, that might not fit with that individual’s financial affairs according to the Revenue. Or if someone owned three properties in their name but had not declared any rental income, that would also be a warning sign.

Social Networking sites, such as Facebook or Twitter provide evidence of a lifestyle that’s out of kilter with declared income. If the Revenue has doubts about someone’s tax affairs they will search for any information they can find on that individual, including posts on Facebook and tweets. Several individuals were caught out after appearing on the Channel 4 television programme My Big Fat Gypsy Wedding spending thousands of pounds of undeclared income on lavish family weddings. Another individual came under HMRC’s watchful gaze after posting photos of their luxury holidays on Facebook.

Higher-rate taxpayers with properties abroad are among those targeted by the 200-strong “affluence unit”, which is dedicated to checking that those who pay the 50 per cent tax rate, but are worth less than £20m, are complying with tax law. The team uses “sophisticated data mining techniques” on publicly available information to identify individuals who own property abroad. It then uses risk assessment tools to highlight those who do not appear able to afford those properties legitimately as well as those who have not declared the correct income and gains from the property. The affluence unit has been set a target of raising an extra £560m over the next four years.

Further Reading:

http://www.ft.com/cms/s/0/0f98bbc0-2db6-11e2-9988-00144feabdc0.html#axzz2Nt9eXOZK

http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/9542989/HMRC-recoups-26m-missing-inheritance-tax-using-complex-PC-systems.html

Tenants will know that for 10 years we have provided Internet Access which we don’t make a charge for. Believe it or not in the early days experts advised us not to do this as we would become liable for all sorts of activities by our tenants using what was our internet account, nevertheless we have provided this free service for some 10 years now. Initially the service was only to the flats which had been modernised, and had cabling for the internet installed, but 3 years ago we added a number of wireless routers extending the facility to all flats.

Tenants intending to run a business from home, or needing reliable internet access have always been advised to provide their own service. The service I provide is shared amongst everyone, and so is not secure, fast, or reliable. We do not employ any technical support and internet access does not form part of the tenancy contract.

At the beginning of this year things suddenly went bad – the internet stopped working, and it still isn’t back to full health. I thought that I should crawl out from under my stone and make an apology, and an explanation – which whilst not excusing the extraordinary delay in returning the service, may explain what I now know. I am really sorry for what is happening, and we are working hard to fix things and get them running again.

Our Internet disappeared at the beginning of January, and it took some time to establish why. It was provided by Sky has part of a TV package that I was paying for – for some reason the TV channels haven’t been provided for some time, and I only continued with the TV package because I got free Internet Access with it. When the Internet disappeared Sky claimed that I had cancelled it in 2010 – the questions as to why I would cancel a free service, and why they continued to supply a cancelled service for another 2 years aren’t clear.

I decided to make a break from Sky and also to improve the speed of the internet service that we provide, and so have cancelled the Sky service and signed up to Utilities Warehouse to give us a Super Fast Fibre Optic Broadband Service to improve everyone’s connection. Currently this isn’t going well – Utilities Warehouse have visited, installed, and left without anything working. We have had a look at what they have left, and got an ordinary ADSL service running ourselves, but a few flats that used to have wired services seem to have lost their connection, and we are yet to get the wireless routers working again.

I am really sorry about this, and will be visiting next week to review the situation. Meanwhile we believe that most wired connections should work, and a wireless connection should be available on:

SSID: TNCAP3EEECF

PASSWORD: CA998ADAE8