The Rights, Obligations & Responsibilities of the 10,221 Southampton Landlords & 25,247 Tenants During the Virus Outbreak

CLICK HERE TO FIND OUT HOW MUCH YOUR SOUTHAMPTON PROPERTY IS WORTH

The last few weeks, unquestionably, have been one of the most life-changing times we have seen since WW2. The threat of the Coronavirus has taken over the world, the UK and Southampton and will challenge you, our families and our relationships.

The driver of this worldwide action of social distancing is not just to stop you from getting ill with the virus; the bigger driver is to slow down the spread of this virus so the NHS will not become overwhelmed with those who are most likely to need hospital care. Yet the issue of social distancing has certainly raised many questions around the landlord/tenant/agent relationship, so in this article I wanted to share with all the 10,221 Southampton landlords their rights, obligations and responsibilities to their Southampton tenants. I also wanted to highlight the rights, obligations and responsibilities of the 25,247 Southampton tenants in return.

These will be trying times for Southampton landlords and Southampton tenants alike, so let’s start…

A landlord has the responsibility to ensure the property is fit for habitation, so what if the Southampton landlord/agent is incapable of undertaking an emergency repair (or say the annual gas safety check) because the tenant is self-isolating or actually has the virus? The answer is the landlord should use their best efforts to fix the problem if it’s an urgent repair, yet if the landlord/agent are unable to do so they should record this fact and that it is related to the Coronavirus epidemic. One should then re-try as soon as possible and appropriate, having full respect for the protocol on self-isolation, personal-safety and social-distancing and ensure that you have documented the process. My advice is that you or your agent (as we are with our Southampton tenants) need to uphold good lines of communication with the tenants touched by these current circumstances, so they are clear on what action you are taking and the timescales for this.

Yet at the same time, there will be situations in the coming weeks when the contractors who the landlord/agent use will also be in self-isolation, meaning a handful of the 25,247 Southampton tenants might have to wait for repairs to be sorted. We have some excellent Southampton contractors with their own backup plans and so together we will use our best endeavours to find an alternative contractor to fix any issues. If your agent has issues, then maybe we can help – do call me. Yet whatever you do, document everything. Do remember that agents and contractors will have to prioritise emergency works over more basic maintenance and prioritise key workers / NHS over non key workers.

The total rent paid by Southampton tenantseach month is £32,593,900

It’s true the UK government has requested that building societies and banks give a three-month mortgage holiday to those landlords that are unable to make mortgage payments. This is not free cash, the mortgage payments are basically postponed with interest to be collected at the end of this crisis, meaning your obligation as a Southampton tenant to pay the rent still exists. HM Government is offering employers an 80% wage support with furloughing to avoid having to make people redundant and at the same time enabling them to pay their bills. Universal credit is also there to help. One-point worth noting is that not all landlords have mortgages and I am not talking about extremely wealthy landlords, some our landlords are retired, own one property and rely on the income as part of their pension to live off.

The average Southampton rental payment currently

stands at £1,291 per month

Therefore, if you are incapable of paying your rent, it will still build up and accumulate during this virus predicament and you will need to start a payment plan to pay it back on top of your normal monthly rent. So if your rent is £1,291pm and you have already been living there for 2 months into a 12 month tenancy, there is still £12,910 to be paid over the next 10 months, so should you make no rental payments for 3 months your rent would increase by 43% a month for the last seven months or you face eviction due to arrears. One option, subject to status and agreement by all parties, could be to renegotiate a new longer lease to pay off the arrears over a longer period or make lower rental payments for a few months. Again, the point here is communication. Landlords, agents and tenants need to talk to each other and agree a plan – making sure there are no nasty surprises.

So, if you are in this predicament, there is a lot of help accessible from the HM Government including Universal Credit or Employment Support. You should access these as soon as possible to escape any interruptions to your monthly payments. Remember, your Southampton landlord will need proof of your Universal Credit or Employment Support claims to give to their mortgage company to be able to start the mortgage holiday, so my advice to all the 25,247 Southampton tenants is keep in contact with your agent to ensure your Southampton landlord doesn’t suffer any avoidable hardship (which ultimately may end up with your home being repossessed because the mortgage payments were missed because you were unable to furnish the landlord with your own claim documents).

Communication is the #1 priority here. Whilst most agent’s premises are closed including our own, it is business as usual for telephone and email enquiries, with staff working from home. This is a fast-changing time for everybody but now more than ever we need to stay in touch with each other, an email, text or phone call to our landlords and tenants.

The coming weeks are going to be tough for the people of Southampton (and the world), financially and mentally; yet together we will come out of this stronger. By working together, working in partnership, again keeping lines of communication open with regards to your finances and your housing, by keeping safe and protecting our families and most of all by being kind to each other...

We will get through this, a little battered and bruised, yes, but hopefully better human beings for it? Take care and stay safe Brian.

CLICK HERE TO FIND OUT HOW MUCH YOUR SOUTHAMPTON PROPERTY IS WORTH


If you would like to pick my brains on the Southampton Property Market – pop in for a coffee or drop me a line on social media or email.


If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on brian.linehan@belvoir.co.uk or call on 023 8001 8222.

Don't forget to visit the links below to view back dated deals and Southampton Property News.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirsouthampton/

Twitter, https://twitter.com/sotonbelvoir

LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/offices/southampton 

Southampton Property Market – Is it Time to ‘Plan’ to Get the Builders In?

Even though the new legislation was placed on hold because of the recent General Election, it is expected the Government will start fining around half of all UK local authorities for failing to build enough new homes as Westminster starts to force local authorities to build more homes with the new laws.

The Conservative Government has gone on record with an ambitious plan to build 300,000 new homes each year from the mid-2020s (aspiring as the average for the last 13 years has only been 177,000 pa). So Downing Street see the planning system as requiring root and branch change to ensure local authorities deliver on that promise.  The Ministry of Housing, Communities and Local Government’s ‘Housing Delivery Test’, which should be launched on an undetermined date this year, will hold local authorities to account for ensuring they hit their own specific house building targets.

If a local authority is unable to show that it has a five-year stock of land for building new homes, it gives builders greater rights and liberties to build their new homes where the builder wants (not where the local authority wants).

This will mean there will be a house building free-for-all

as the council will have less control over the setting, types of properties, contribution to infrastructure and location of any new home development.

Only 44% of local authorities have a local plan that is less than five years old.

Locally, Southampton isn’t in that 44% of local authorities. The current situation is, a draft Local Plan is in preparation.

Yet, the original question of this article was to find out if we are building enough homes in Southampton and the surrounding local authority area i.e. should we get the builders in? Well, the Government set targets for local authorities for the number of homes they should build each year. The latest set of data is for 2018, so for the three years up to and including 2018 i.e. 2016/2017/2018,

Southampton’s new home building target was 2,381 new homes, yet it achieved 2,869, a surplus of 488 new homes 

So, what does that all mean for the Southampton property market?

Even with the surplus, there are positive and negatives to this. The Southampton property market is not broken, yet it does need to get the builders in. Irrespective of the results from the last three years, we have over three decades of under building, which has created issues regarding affordability of homeownership and older generations being stuck in homes too big because there aren’t enough suitable homes for them to move in to, i.e. bungalows. The stabilisation of the General Election has been a net positive to overall confidence in the local property market, meaning Southampton homeowners and Southampton landlords looking to sell their home in the coming spring and summer will find decent demand (although sellers still need to realistic with their pricing).

Unfortunately, the negatives are that many Southampton renters that want to buy, are unable to as they can’t save after paying their rents and feel as if they’ve been left behind. I know the Government recently launched their “First Homes” scheme for selected first time buyers at the start of February, where a 30% discount would apply to “a proportion of new homes” and would be subsidised out of contributions from builders, the Tory’s have previously promised to build 200,000 cut price homes for first time buyers back in 2015, yet the National Audit Office has recently confirmed they never built a single one!

The simple fact is, we as a country need to build far more affordable homes in the areas where people want them. This means the dream of homeownership will be a greater possibility for our children and grandchildren in the future. Our local authority needs to continue to plan the housing needs (and associated infrastructure) to ensure that as we live longer and continue to grow as a country - we have the homes to live in that are suitable for every generation.

CLICK HERE TO FIND OUT HOW MUCH YOUR SOUTHAMPTON PROPERTY IS WORTH


If you would like to pick my brains on the Southampton Property Market – pop in for a coffee or drop me a line on social media or email.


If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on brian.linehan@belvoir.co.uk or call on 023 8001 8222.

Don't forget to visit the links below to view back dated deals and Southampton Property News.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirsouthampton/

Twitter, https://twitter.com/sotonbelvoir

LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/letting-agents-southampton 

Southampton Property Market What is going to happen to Stamp Duty on 11th March?

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If you are buying a home in England costing more than £125,000, you will have to pay Stamp Duty Land Tax on the purchase of your new home. In the provinces, it’s called something slightly different, so if you are buying a property in Scotland over £145,000 you will pay Land and Buildings Transaction Tax (LBTT) and for any property over £180,000 in Wales you will pay Land Transaction Tax (LTT). Whatever the tax is called, it is an important factor when moving, when you consider that;

Last year the average UK house buyer paid

£10,150 in Stamp Duty Tax alone

Now as soon as the date for Rishi Sunak’s budget was set for 11th March 2020, conjecture in the Press began about what stamp duty changes he may disclose on budget day. The Chancellor only sets the budget for England and Northern Ireland, yet this is just as relevant for Wales and Scotland. Even though Derek Mackay, the Scottish Finance Secretary said on 6th February he has no plans to change Scotland’s version of Stamp Duty (LBTT), more often than not, Stamp Duty rule changes in England are often adopted in Wales and Scotland at a future date.

Some are asking if Mr Sunak will impose what was promised in the Conservative manifesto with the 3% additional Stamp Duty surcharge on non-UK resident buyers? I have certainly heard in the Estate Agent community that foreign buyers are trying to rush through their sales in central prime London (Park Lane/Mayfair etc etc) before 11^th March to ensure they don’t get hit with a new tax. Or will he go even further, and will we see a reappearance of Boris Johnson’s hitherto specified aim of eliminating Stamp Duty below £500k, consequently theoretically saving homebuyers many thousands of pounds?

However, opinions are divided on what, if anything, will be included in the budget.

Most believe that the extra 3% for foreign nationals is an almost certainty, and if it isn’t implemented straight away, it will be in the Autumn Statement. Many believe the Chancellor could also decide to repay the favour to those in the North who turned the Election map ‘blue’ on the evening of 12^th December with actions to enhance the housing market north of the M62 with stamp duty changes. The best way he could do that is to raise the threshold from the current £125k.

When Boris ran for Tory leadership back in May 2019, he said that he wanted to expand the threshold at which you begin paying stamp duty from £125k to £500k, which when you consider 7 out of 8 residential sales in 2019 were for homes below £500k, that would have a considerable effect. If the Stamp Duty threshold had been raised to £500k in 2019, then 700,400 homebuyers in England would not have paid any Stamp Duty Tax.

92.1% of Southampton properties sold last year were below £500k

Of the 7,177 properties sold in the last 12 months in Southampton, only 570 of those properties sold were over £500,000 (interesting when compared with Greater London where 44.9% of properties were below the £500k level).

Yet the cost to the HM Treasury would be significant. If all properties below £500k were exempt, the government would lose £2.22bn in tax receipts according to Savills. Of course, this could be made up with extra tax on empty properties or increasing the second homes Stamp Duty levy from the current 3% to say 5%, which would raise an additional £1.12bn on top of the current £1.68bn it raises for the Treasury, yet it would have a negative effect on buy-to-let landlords buying additional homes.

What almost unquestionably won’t happen is the earlier idea of switching the Stamp Duty liability from homebuyer to home seller

this would stall the property market, would probably cause political fallout among 688,300 homebuyers who paid Stamp Duty last year alone, make homes ‘appear’ more expensive as house sellers would inflate the asking price to try and recoup some of the tax, yet ultimately could be seen as ‘re-arranging the deckchairs on the Titanic’.

The 3% additional levy for foreign buyers is almost certain (of which we don’t get many in Southampton – as they tend to buy in prime London areas which is of course the City of Westminster and the Royal Borough of Kensington & Chelsea, and parts of the boroughs of Hammersmith and Fulham, and Camden), yet I have a feeling that ultimately the Government doesn’t want to rock the boat on the wave that is being rode by the property market on the ‘Boris Bounce’ since December. I also doubt any changes will be made to first time buyer Stamp Duty relief, as 22% of all property transactions in 2019 were to first-time buyers, and whilst it cost the Treasury (or saved the first-timer buyers) a total of £539m in Stamp Duty relief (an average of £2,411 each), the Government are keen for first time buyers to get onto the housing ladder.

Ultimately, we can only wait until Mr Sunak opens his red leather box on 11^th March to find out what will happen. I will of course report back after 11^th of March on what (if any) changes to the tax regime will affect the Southampton property market going forward.

CLICK HERE TO FIND OUT HOW MUCH YOUR SOUTHAMPTON PROPERTY IS WORTH


If you would like to pick my brains on the Southampton Property Market – pop in for a coffee or drop me a line on social media or email.


If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on brian.linehan@belvoir.co.uk or call on 023 8001 8222.

Don't forget to visit the links below to view back dated deals and Southampton Property News.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirsouthampton/

Twitter, https://twitter.com/sotonbelvoir

LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/letting-agents-southampton