The Times - UK (2020-09-05)

the times | Saturday September 5 2020 1GM 65

Money

On the lookout for those buy-to-let hotspots

duty in England and Northern Ireland

on July 8 (with Scotland and Wales

following suit soon afterwards).

“There’s a risk that you could buy at

elevated levels — with lower rental

yields and less potential for growth,”

said Sarah Coles, a personal finance

expert at the wealth manager

Hargreaves Lansdown.

Simon Draper-Coates from Private

Finance, a broker, agreed. “The increase

in prices effectively erodes the savings

one would expect to make from the

stamp duty holiday,” he said.

The ban on evictions has been

extended until September 20 and the

government has instituted a six-month

eviction notice period for tenants

lasting until at least March 31.

Some analysts expect a surge in

rental demand later in the year amid a

recession as first-time buyers give up

on getting on to the property ladder.

“However, there’s also the risk that

tenants face more issues in paying rent,

which would mean rents fall again,”

Coles said. Because of falling demand

a mortgage for between £75,000 to

£100,000,” he said.

Shane is aware that rental yields have

fallen in some regions and that many

landlords are worried about the

government’s ban on evictions, which

aims to help tenants suffering hardship

in the pandemic. “Given the

extraordinary circumstances at the

moment, is it a good time to invest in

buy-to-let?” he asked. “Do you think the

stamp duty exemption will mean more

competition from first-time buyers?

What will be the impacts of the eviction

ban and falling rental yields?”

Troubleshooter says:

The experts we consulted agreed that

Shane should be cautious about

investing now because he risks

paying inflated prices as the market

bounces back after the lockdown.

Analysts from TwentyCi, a consumer

data company, said that average asking

prices are £30,000 higher today than

before lockdown, and have gone up

£10,000 since the chancellor cut stamp

A landlord from Burnham in

Buckinghamshire is keen to expand his

buy-to-let portfolio, inspired by Rishi

Sunak’s decision to exempt buyers of all

homes worth less than £500,000 from

paying stamp duty. The chancellor’s

exemption applies to landlords, but

buy-to-let purchasers will still have to

pay the 3 per cent “additional

properties” levy.

Shane de Fonseca, 45, an academic,

wants to invest in a small property in

the north of England, a region that has

generated some of the biggest rental

yields. In the northwest they average

5.4 per cent, and in the northeast they

are 6.6 per cent, compared with 4.7 per

cent in the southeast and 5.2 per cent

across the UK, according to Zoopla.

Shane, who already has a buy-to-let

property in Manchester, is also

prepared to consider the northeast,

where property is the cheapest in

England. He is hoping to buy something

for about £150,000. “By December I will

have about £30,000 to put down for a

deposit on a flat, and I aim to apply for

for homes in city centres as people

work from home Draper-Coates

suggests that towns or suburbs would

be a better bet. “If you now work from

home and primarily socialise locally, it

does beg the question as to why you

would pay thousands of pounds in rent

to be in a city centre,” he said.

“Landlords may need to broaden their

geographic horizons.”

Coles added that Shane should not

be blinded by the attraction of the

stamp duty exemption. “You will still

face tax on income and when you come

to sell, there could be capital gains tax,

which is under review, so if you’re

building up a bigger and bigger liability,

you’re increasingly vulnerable.”

Mortgages are, however, extremely

cheap, thanks to the Bank of England

base rate of 0.1 per cent — something

that may not last if Shane were to wait

until the new year. “The best two-year

fixed mortgage for a buy-to-let property

is 1.19 per cent. It is unlikely that interest

rates will remain quite so low in the

long term,” Draper-Coates said.

David

Byers

Troubleshooter

Are landlords not providing

something that people need and

want, at market prices? (Falling

rents and reduced profits. Does

it still pay to be a landlord?,

August 29). Do they not deserve

the same sympathy you might

have for your neighbour who also

has a mortgage and no money

coming in? Is it the property-

owning class, or capitalism in

general that people object to?

MB

Many of these landlords will be

sitting on healthy capital gains —

don’t forget that. The Covid crisis

is a “black swan” moment that was

pretty much unforeseeable and

has had serious effects for many

landlords. It is called investment

risk and something that equity

and debt investors have had to

deal with for decades. With almost

uninterrupted healthy capital

gains over the past three decades

for property owners, the risk of

this single (expensive) asset class

has tended to be forgotten.

TCH

I have a tenant who hasn’t paid

rent since January and has clearly

taken advantage of the lockdown

and eviction ban. I can do nothing

and have lost over 8k in income.

The7

This is a global pandemic that

hits everybody, you included.

Rent is a reward for risk, so you

have to expect some grief. I speak

as a landlord.

DVV

I was in a very similar situation

with my son at least ten years ago

(Trapped in a vicious O2 circle

over son’s bills, Troubleshooter,

August 29). It is astonishing that

there seems to have been no

better way found to deal with the

debts of family members with

mental health problems. The

treatment meted out to “Jayne”

by those companies is almost

identical to that I faced. The stress

is almost unbearable.

HJM

Great article! (Crazy pension

rules force young women to

think about having babies,

Modern Money, August 29) Let’s

hope a fraction of the affected

demographic see it at least.

Schnapps

In 2008 I lost £30,000 of my

pension and never again invested

one penny. I bought property and

it has given me far greater

stability and returns.

Auslawyer

Just seeing the headline was

enough for me to realise this

would be Tonik Energy (16 bills

were sent to my dead mum,

August 29). Their customer

service is a disgrace. I have had

no end of problems with them

since moving this year.

S-Hale

Probate is a time-consuming

business. I think the last one took

me about 250 hours. In my

experience of three probates in six

years, a significant minority of the

time is spent with the two worst

companies.

Dianne Fraser

Comments made via thetimes.co.uk

Have your say

A

grieving widower has ap-

pealed for help to stop com-

panies from continuing to

address letters and bills to

his late wife, causing him

distress and frustration.

Alan Surry’s wife, Madeline, died

from cancer in July last year aged 56.

Their flat in Essex, which they owned

jointly, has now passed to him.

Alan, 57, has, however, been unable to

persuade his freeholder’s agent, Arrow

leasehold management, to stop writing

to Madeline, alhough he has told it

several times that she has died.

“I have spoken to, and written to, the

leaseholders informing them of the sit-

uation, but nothing has been done,” he

said. “It claims it is unable to address the

letters to me because my wife is listed

on the Land Registry as the title holder.

This is incorrect. We were listed as joint

owners. I have no problem paying in-

voices addressed to me, and have paid

those addressed incorrectly up until

now, but quite frankly I am tired of

having to deal with people who cannot

or will not resolve a simple issue that is

causing me distress.”

Alan, an IT engineer, is the executor

of his wife’s will. He says it upsets him

to be sent correspondence to his home

addressed to “Miss Madeline Susan

Elizabeth Surry (Deceased)” more than

a year after his wife’s death and he is

considering withholding payment. He

has sent the company copies of her

death certificate and her will.

“I would be grateful for any advice as

to my legal position regarding the

non-payment of charges that are

incorrectly addressed. I feel I have no

option but to make a stand because my

pleas have fallen on deaf ears.”

Troubleshooter says:

Land Registry documents show that

the property was always in both the

couple’s names. Arrow could have

checked this for £3.

Troubleshooter has seen email cor-

respondence in which the company

acknowledges receipt of Madeline’s

death certificate and a copy of the will

naming him as the owner.

The company was also sent an email

on September 6 last year from the be-

reavement service Trust Inheritance

Limited, which prepared the will and is

administering the estate, urging it to

stop addressing letters to Madeline.

Alan is so angry that he has “resorted

to returning the letters marked ‘No

longer at this address’,” he said.

Mark Loveday, a barrister at Tanfield

Chambers specialisting in property law,

said that Arrow should have started

writing to Alan, as inheritor of the prop-

erty and executor of her will, immedi-

ately after being shown a death certifi-

cate. He adds, however, that Alan

should continue to pay the bills.

“Landlords who fail to update the

details of the correct legal owners of

flats run the risk that legal notices are

invalid. But in the case of service charge

and ground rent demands, a court is

likely to invalidate it if it is ambiguous to

a ‘reasonable recipient’. The error in

this case is likely to be an obvious one to

the legal owner — so I would not advise

him simply to return demands unpaid.”

Mr Loveday suggested that Alan

make a formal complaint to the Proper-

ty Redress Scheme, to which Arrow is

enrolled, as stipulated by the Enterprise

and Regulatory Reform Act 2013. This

scheme, authorised by the Department

for Communities and Local Govern-

ment, can offer redress to clients of let-

tings, property management and estate

agents. After a complaint is made the

scheme will try to mediate between the

parties and if it finds wrongdoing can

impose fines of up to £25,000.

After Troubleshooter contacted

Arrow, a year on from Alan’s loss, Sean

Scott, its head of operations said: “Ac-

cording to our records, the property

was not in the name of Mr and Mrs Sur-

ry. Since the sad passing of Mrs Surry,

we have clarified to Mr Surry on a num-

ber of occasions that we need a copy of

the title to prove ownership. Unfortu-

nately this has not been provided. We

are unable to issue a service charge de-

mand to an unregistered person.”

He added: “If Mr Surry can provide

this by end of January, when the next

demand is issued, this will mean this

matter is resolved.”

Write to Troubleshooter,

Times Money, 1 London Bridge

Street, London SE1 9GF or

[email protected],

including your phone number

Can I refuse to pay bills

addressed to my late wife?

ILLUSTRATION BY CHARLIE ACORS