Tag Archives: Rent Smart Wales

Your Cardiff HMO in Safe Hands

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Employing any of our House of Multiple Occupancy (HMO) services you can rest assured your property and rental income is in safe hands.


We are a Rent Smart Wales accredited letting agent, a member of The Property Ombudsman Scheme and a member of the National Approved Letting Scheme (NALS) that employs Client Money Protection (CMP).

If you would like to discuss any of your services  email info@roomsincardiff.co.uk

Telephone 0845 496 0000

or complete the form below to receive a call from one of our experienced HMO managers

Is the Cardiff House Share an Endangered Species?

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The Cardiff house share is in great danger due to a number to changes to taxation and legislation to the Private Rented Sector (PRS) across the UK in 2016 with Wales leading the way with the roll out of Rent Smart Wales www.rentsmart.gov.wales a national landlord and letting agent register which came into force on 23rd November 2016.

As well as the introduction of Rent Smart Wales the Welsh Assembly Government have also introduced further legislation around the creation of Houses in Multiple Occupation (HMO) or more commonly known as house shares. Prior to 25th February 2016 in Wales the C3 planning use classification applied to all dwelling houses up to and including six tenants but on the 25th February 2016 Wales introduced a C4 planning use classification of HMO: “tenanted living occupation by 3 to 6 people, who are not related and who share one or more basic amenities, as their only or main residence.”

Why is C4 HMO Use Class Such a Problem?

In England, it’s not.  It has long been accepted that permitted development rights ensured a property owner would automatically have planning permission granted by the General Development Order where an existing single family dwelling (C3) is used as a small HMO (within class C4) or vice versa.  However, all properties in Wales with 3 to 6 (unrelated) tenants now require a change of use application to be made, at the recently increased planning fee of £380 and there is NO GUARANTEE OF APPROVAL for your house share in Cardiff or else where is Wales.

Cardiff Council’s Approach to House of Multiple Occupation (HMO)

From a landlord and property investor perspective it looks as if Cardiff Council is going all out to stop the creation of additional house shares within the city.  Cardiff Council is to try to control the total concentration of house shares in each area by denying landlords in those areas planning permission to move between HMO classes if the concentration for that area has already been met, and the property falls within 50m radius of the designated area.  The threshold for the ward’s of Cathays and Plasnewyedd is 20 percent and in all other wards 10 percent.

Here is a link to Cardiff Council’s HMO Supplementary Planning Guidance: https://www.cardiff.gov.uk/ENG/resident/Planning/Planning-Policy/Supplementary-Planning-Guidance/Documents/HMO%20SPG%20Consultation%20Draft%20April.pdf

So as can been seen from housing legislation that has been introduced by the UK Government , Welsh Assembly Government and Cardiff Council there is going to be a decrease in the overall number of Houses of Multiple Occupation (HMO) being created in Cardiff even though the number of people looking to house share in Cardiff is ever increasing as they search for high quality affordable accommodation.

Government Attacks Private Rented Sector

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Landlords and property investors across the UK have come under attack from most sections of society with the most serve attacks coming from Government in this year’s Summer Budget and Autumn Statements.

So Rooms in Cardiff have put together a handy resource for landlords and investors operating in Cardiff property market.

Summer Budget 2015 & Autumn Statement 2015

Summer Budget 2015 was where the most damage was inflicted. Hot on the heels of an outstanding success at the general election the Conservative party began to set out their stall and plans for the PRS and how they plan to remove small scale landlords via taxation:

Mortgage interest relief for buy-to-let homebuyers to be restricted to basic rate of income tax as it is, the tax relief will be halved for those paying the highest tax rates. The removal of mortgage interest relief will be gradually phased in from 2017-18 enabling landlords to claim relief to 75% their finance costs and reducing 25% each year until 2020-21 where only basic rate relief will be available, essentially higher rate tax paying landlords paying tax on their turn over and not profit.

Removal of 10% Wear & Tear for Furnished Lettings To take affect from 6 April 2016 the ‘Wear and Tear Allowance’ is to be replaced by a new ‘Replacement Furniture Relief’ (RFR) for all landlords whichever type of property, furnished or unfurnished.

Inheritance tax threshold to increase to £1m, phased in from 2017, underpinned by a new £325,000 family home allowance

The Autumn Statement 2015 had a further shock for Landlords and property investors with the introduction of higher rates of Stamp Duty Land Tax (SDLT) for buy-to-let investors and second home owners, new purchases from April 2016 will be taxed an addition 3% above current SDLT rates so a £100K property will now pay £3K (was previously exempt) and a £200K property £10K in Property taxes previously £4K.

Here is the legislation taken from Governments Autumn 2015 Spending Review

 “Stamp duty land tax: additional properties – Higher rates of SDLT will be charged on purchases of additional residential properties (above £40,000), such as buy to let properties and second homes, from 1 April 2016. The higher rates will be 3 percentage points above the current SDLT rates. The higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporates or funds making significant investments in residential property given the role of this investment in supporting the government’s housing agenda. The government will consult on the policy detail, including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate. The government will use some of the additional tax collected to provide £60 million for communities in England where the impact of second homes is particularly acute.”

Benefit Cap & Universal Credit

Benefits have been capped across the UK and there is now a limit on the total amount of benefit that most people aged 16 to 64 can get. The level of the cap is:

  • £500 a week for couples (with or without children living with them)
  • £500 a week for single parents whose children live with them
  • £350 a week for single adults who don’t have children, or whose children don’t live with them

You can find out information of the Government’s Benefit Cap and which benefits will and won’t be affected. Housing Benefit is also frozen for a four year period from 2016-2017 making it even harder for tenants in receipt of Housing Benefit to secure housing in Cardiff and across the rest of the UK when rents continue to rise in the PRS.

November 2015 is a big month in Cardiff as Universal Credit will also begin to be rolled out across the Welsh Capital (Cardiff Council Link to Universal Credit) although this is mostly likely to only affect single “new” claimants.

Rent Smart Wales is here!

We knew it was coming but not quite when, but it’s official it is up and running but seems to be having numerous issues with registering as landlords, agents and taking payments.

You need to determine whether you simply need to register with Rent Smart Wales, or whether you need to register and be licensed you can do so by visiting Rent Smart Wales. As a landlord with property in Cardiff you have two options:

Register Only: If you use a managing agent and do not involve yourself in the setting up of tenancies or day-to-day property management, you will only need to register.

Registration and a licence: If you find tenants yourself or take care of the day-to-day property management yourself, you will need to register and be licensed.

If you haven’t already been on the Landlord Accreditation Wales training course, you will need to do landlord training before being granted a licence. Currently, the required training can only be attained by attending a one-day course in person, but there will be online training available in the New Year.

Rent Smart Wales and Section 21 Notice

 No section 21 notice may be given if:

  • The landlord is not registered, or
  • The landlord is not licensed and the landlord has not appointed a person who is licensed to carry out all property management work in respect of the dwelling on the landlord’s behalf

Ouch! Landlords May Have Rent Stopped or Have to Repay Tenants

Yes Landlords may have their rent stopped via a Rent Stopping Order or your tenant may apply for a Rent Repayment Order! What is even more worrying the person who is alleged to have committed the offence does not have to have been charged or convicted of an offence for a rent stopping order to be made?

The effect of a rent stopping order is to stop, for a period, any rent payable by a tenant. Legally the tenant will be considered to have paid this rent and no rent arrears claim could be made.

Renting Homes Wales Bill

 The Renting Homes Wales Bill has been passed by the Welsh Assembly and is likely to receive Royal Assent in December 2015. The main points of the bill include:

  • All tenancies and licenses are replaced by two “occupational contracts”
  • Tenants will have a minimum 6 month occupation period
  • Landlords to ensure property is fit for human habitation
  • Joint tenancies will be treated differently if joint tenant wishes to leave tenancy the tenancy will continue in remaining tenants sole name

One major benefit stands out for Landlords. The Bill will enable landlords to repossess an abandoned property without needing a court order!

Also there may be trouble on the horizon for HMO landlords across Cardiff. On Friday 6 November 2015, the government published a consultation paper on changes to mandatory Houses in Multiple Occupation (HMO) licensing in England. A new definition for HMOs could bring in smaller properties under mandatory licensing.

The Government is also considering a new national minimum room sizes along the lines of the statutory overcrowding standard in Section 326 of the Housing Act 1985 of 6.5 Sq. m for single rooms and 10.2 Sq. m for double rooms, here is a link to article complied by Residential Landlords Association

It seems that small landlords are under full scale attack and 2016 will be a challenging year for landlords, tenant and PRS as a whole especially in Cardiff where Universal Credit, Rent Smart Wales and Renting Home Wales Bill will all start to shape the PRS.