New Council Tax Ruling is a ‘tax on Landlords’

Council tax relief may end on rental property depending on the local council

How will the new Council Tax regulations affect the Rental Market?

Rented property as Second Home 
If you own property that is rented you officially have a second home. If this property is furnished and empty for a period between tenancies, Local Councils have been obliged to offer discounts of between 10-50% on Council Tax, although in practice most councils only allowed a 10% reduction in fees.

This situation was already biased against the rental sector when you consider that a single occupier of a property can apply for a 25% reduction, but a Landlord could only get 10% relief.

Previous Legislation on Rented property and Council Tax
Previously if a rental property was empty and unfurnished there was no Council Tax due for six months, and after that period it could also qualify for up to 50% discount, as per the furnished property detailed above.

Second homes have long been controversial because owner non-occupiers have been accused of tying-up available living space while effectively draining the economy, by not being fully involved in the local community. However we argue that Landlords do not fall into this category. In fact they may be the only ones providing affordable housing in some areas of the country.

New Council Tax rates
New Government regulations announced last week, give responsibility to Local Councils for setting Council Tax discounts on second homes. As each Council comes under growing financial pressure it becomes increasingly likely that Councils will scrap any relief on Council Tax on second homes, and rental property.

While property undergoing major repair work or structural changes remains exempt from Council Tax bills for up to 12 months, each Local Council will chose what constitutes ‘major work’. It is unlikely to include upgrading heating systems, replacing windows, or redecorating – all of which responsible landlords will do periodically to protect their investment and to keep up the standard of housing.

No incentive for landlords to refurbish property
In a week where a landlord in Plymouth is in danger of getting an ASBO because of the condition of his properties, does this send out the right message to responsible landlords?

This new legislation does not take into consideration the financial pressures on private landlords who are often working on tight margins or indeed could be subsidising their investment now to gain long term benefits as ‘pension plans’ for the future. In effect they are being penalised for being fiscally responsible.

The Council housing sector is not able to place all the people who need to rent property, so if Councils put more pressure on private landlords they may decide to sell up and put their money elsewhere. After all being a landlord is not ‘easy money’.

Riley Marshall are Sales and Rental sector agents. Our blogs are intended to inform, and we welcome debate, please feel free to comment on this page or visit our Facebook page.


Gas Safety in rental property – What your agent does for you Part 6

Landlords: If you have gas appliances in your rental property they must be checked every year, and an annual Gas Safety Certificate issued by a Gas Safe engineer. We explore why you should use a letting/management agent?

Gas appliances must be checked by a Gas Safe Engineer


How does your letting agent help?
Any gas installation and appliances in rented property should be safe. In the UK it is a legal requirement for landlords to have gas appliances checked by a Gas Safe engineer annually. Your Letting or Estate agent can arrange these inspections on your behalf. This can benefit you by finding the most competitive rates. They will liaise with tenants to get access to the property for workmen. Once the work is done the bills can typically be paid from the rent collected. Perhaps the most important role your managing agent plays is the keeping records of due dates and certification.

Letting and managing agents build up good relations with reputable local tradesmen and this often leads to these engineers giving priority to their agents when there is an emergency or urgent job to deal with. It is in their interests to make sure a bigger client like a letting/estate agent is happy in circumstances where they might keep an individual waiting.

Tenants are often not as patient as homeowners when it comes to repairs so this can be beneficial to landlords who value hanging onto their good tenants.

CORGI replaced by Gas Safe
The old approved registration for Gas installers was called CORGI, and many people still refer to it even though it been replaced by the Gas Safe Register. Any gas fitter in the UK, Guernsey, and Isle of Man must be on the register to work legally on gas installations and gas appliances. Any reputable agent will only allow any gas related work at your rental property to be carried out by a Gas Safe engineer. If your agent does not comply with this basic standard then they put you and themelves at risk of prosecution, in which case you should get yourself a new managing agent.

The engineer will test that the appliance is working safely and write a report on their findings. This will include any mandatory work, any recommended work, and an any notes for the future. If you are arranging an engineer yourself it is worth checking that they are Gas Safe registered (and not just claiming to be) you can check their credentials on the Gas Safe Register site here.

When to get your Gas Safety Certificate
Your letting agent should arrange your Gas Safety Certificate to be issued before you let your property. Do not leave it until the tenants move in. We understand this means you incur costs before the property is let but moving tenants into a potentially unsafe environment has legal implications for you as landlord and for your letting/management agent. You may have a valid Landlords Gas Safety Certificate already in place from a previous tenancy and this is perfectly acceptable. Your letting agent should have a copy for their own records. You do not need to have a gas safety inspection carried out at the beginning or end of each tenancy – just on an annual basis.

Renewing your Gas Safety Certificate when appliances are serviced saves you money
If you are not sure when to have appliances serviced and maintained, it is worth noting that although anniversaries of renewal are likely to be dictated by the first tenancy, it is actually a good idea to have gas appliances tested, serviced, and maintained in the spring and summer. That way if there are problems to be addressed the tenant will be less inconvenienced. Finding a reliable GasSafe engineer, with time to make repairs, will be much easier in the summer too. There is no problem with having two Landlords Gas Safety Certificates issued within a year if you decide to make your dates coincide, just don’t wait for longer than 12 months t have your safety certificate issued.

Remedial works – your agents role
If the engineer finds a gas appliance or installation is not safe he is obliged to disconnect it and place a warning sticker on it (like the one below), so the tenant cannot use it, until it is repaired. This can upset tenants and so it may be helpful for you to have a letting agent as a middleman to deal with their concerns.

One of the best ways to prevent this inconvenience to your tenant is to have the appliance serviced when you have it tested. This is most appropriate for gas boilers and fires. Many landlords assume that their appliance will be serviced as part of the fee, but actually it is more like a car MOT – the engineer is simply testing performance and not carrying out any maintenance work. Your managing agent can arrange to have the appliance serviced at the same time as the annual gas safety check, and it is often cheaper to have this done together, rather than on two separate visits.

Remedial works are tax deductible and any good managing agent will receive the bill on your behalf, deduct the amount from rent paid by the tenant and pay the contractor for you. Your letting agent will keep records and issue statements which you can use to fill in tax returns.

About Riley Marshall Limited
Riley Marshall are Estate agents who specialist in letting and management of properties in South East London. If you would like us to come out to discuss managing your property around Greenwich, Shad Thames, Bermondsey, Rotherhithe, Deptford, Lewisham or New Cross areas then please do contact us for a free valuation. For other blogs on matters relating to property please visit our main blog page.