Section 21 Tenant Evictions Notices are now
6 MONTHS NOTICE - applies from 29th Aug 2020
The PIMS Tenancy Agreement complies with the Tenant Fees Ban June 2019
The Prudential Regulation Authority (the financial services regulator) is warning all lenders that they should be far stricter when awarding BTL mortgages.
Image credit. CanStockPhoto
In the Bank of England’s latest ‘Bank Overground’ publication there is a large feature centred on private landlord tax changes, it surmises that over the last five years buy to let has had its margins and profits reduced by legislative dictates and tax increases, making it far less profitable for tax payers especially those in the higher income bracket.
One of the biggest tax grabs was the phasing out of the mortgage interest tax relief for landlords which ended in April.
The PRA believes that there are some lenders, when considering BTL mortgage applications, do not take this into account which could lead to granting mortgages that go beyond the criteria for customers’ affordability levels.
The financial services authority says: “The PRA expects lenders to take income tax into account when assessing affordability. If the mortgage interest tax relief changes were strictly enforced for affordability testing, higher-rate taxpayers would need to meet a higher stressed interest cover ratio of 167 per cent to be assessed to the same standard as an ICR [interest cover ratio] of 125 per cent for basic-rate taxpayers.”
The PRA states that the majority of lenders assess higher rate taxpayers against the ICR minimum stressed of around 145%; this could mean that lenders could be accepting a lower net rental income making the loans a greater risk.
The authority will monitor lenders more stringently but admits in the report: “The risk posed by such lending is low at present. The overall quality of buy to let lending has improved since 2016. And tax changes introduced since 2016, including the MITR [mortgage interest tax relief], have meant the buy to let market has been very subdued.”
Immigration Act revised 2016 should a landlord or letting agent fail to ensure ALL tenants/occupiers have a righto reside for the duration of the tenancy then they may be fined £3000 for each breach. The Secretary of State may instruct the landlord to remove such persons without the need of a court order by way of reasonable force
Labour market enforcement - restriction on illegal migrants to work. A labour market enforcement undertaking (an “LME undertaking”) is an undertaking by the person giving it (the “subject”) to comply with any prohibitions, restrictions and requirements set out in the undertaking
Under section 42 of the County Courts Act 1984 it is possible for the Court to transfer a matter from the County Court to the High Court for enforcement but leave (permission) of the Court is required first. The transfer time varies from court to court and can take up to 28 days, but normally takes far less. An application to seek permission can be made either at the time of making the possession claim or after possession has been ordered.