Tag Archives: Universal Credit

Why Cardiff Landlords Should Says Yes to DSS

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Yes, we know “DSS” is an outdated term in respect to the benefits system, but it’s still a term that is heavily used by both Cardiff landlords, letting agents and tenants when discussing Housing Benefit and Universal Credit.

So why do we believe as a Cardiff landlord and letting agent its important to say “Yes” to tenants in receipt of benefits. Well for one landlords and Cardiff letting agents should not be proactively discriminating against prospective tenants in receipt of benefits and secondly, COVID-19 is having a huge impact on the economy and people are losing their jobs!

Let’s Look at the latest Unemployment Numbers

  • The UK’s unemployment rate rose to 4.8% in the three months to September
  • Redundancies rose to a record high of 314,000
  • The number of people out of work rose by 243,000 in the three-month period, the largest increase since May 2009.
  • Unemployment rate for 16 to 24-year-olds is 14.6%
  • It is estimated there are about 2.5 million people on furlough
  • Redundancies are at record levels with 314,00 people made redundant in the 3 months up to September 2020
  • Unemployment in Wales for July to September leapt to 4.6%
  • Wales saw the largest quarterly rise in the jobless rate out of any of the UK’s nations or regions.
  • Wales has also seen the largest drop in the rate of people in employment – down 2.5 percentage points from 74.6% to 72.1%

COVID-19 is creating a worry trend in regards to unemployment across the UK, therefore now more than ever we believe it’s important to understand the Universal Credit system as chances are your tenants may need to rely on it over the coming months

We have been renting to tenants in receipt of some kind of benefit for the last 12 years as a private landlord and Cardiff letting agent whether it be as a vanilla buy to let or our preferred option of Houses of Multiple Occupancy (HMO).

The Positives of Renting to Tenants in Receipt of Benefits

Over these 12 years and countless tenancies we have gained extensive knowledge of the Housing Benefit and of late the Universal Credit systems.  We have read numerous books and government circulars on the subject and studied case law to ensure we understand both systems, their similarities, and differences.

Due to the knowledge we have gained over the last 12 years we have found renting to tenants in receipt of Housing Benefit and the Housing Element of Universal credit has many FINANCIAL BENEFITS for LANDLORDS including:

  • Your rent is GUARANTEED by the UK Government
  • Tenants on benefits do not get furloughed so do not ask for a rent reduction
  • Tenants on benefit have seen their income increase during the COVID-10 pandemic
  • Can often receive higher monthly rent than renting to working tenants

How Can We Help?

We can provide the following for Cardiff landlords:

  • Ensure Cardiff landlords are paid the Housing Element of UC direct from day one of a new tenancy
  • If there are rent arrears with an existing tenancy quickly ensure rent is paid direct to landlord and start to recover arrears direct from existing tenants Universal Credit
  • Carry out a rent review to ascertain if there in an option for an actual rent increase
  • For HMOs the potential rent increase could be almost £50/week per tenant

These are just some of the things we can do for Cardiff landlord that employ our fully managed property services.  If you would like to receive a no obligation chat with one of our team, please complete the contact form below

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.