“By March, the worst of the winter would be over. The snow would thaw, the rivers begin to run and the world would wake into itself again.” ―Neil Gaiman

“In like a lion, out like a lamb”

“The stormy March is come at last,
With wind, and cloud, and changing skies,
I hear the rushing of the blast,
That through the snowy valley flies.”
―William Cullen Bryant, March

“It was one of those March days when the sun shines hot and the wind blows cold: when it is summer in the light, and winter in the shade.” ―Charles Dickens

Dear all,

So far we have not received an update from the Scottish Government about when we can get into properties, or repairs and the Covid-19 laws are still applicable.  Which means that the grounds and time scales for evictions have been extended for landlords, however tenants do only need to give 28 days notice.

This law temporarily extends the amount of notice landlords must give when ending a tenancy. In most cases landlords will now need to give tenants 6 months’ notice, unless they are ending the tenancy for certain reasons. Anti-social and criminal behavior and where the landlord or their family need to move into the property has been separated from the standard 6 months.

If you are thinking about selling your property, or feel that you may need to give notice to the tenants to vacate, please sent an email into admin@glasgowporpertyletting.com and we can advise you.

Information on the Scottish Government’s Tenant Hardship Loan Fund

A fund which offers interest-free loans to tenants who are struggling with rent arrears has opened for applications.

The Scottish Government’s Tenant Hardship Loan Fund is designed to help people who have had their finances or employment impacted by the COVID-19 pandemic and do not have other means of housing support.

The new fund is part of a range of support and interventions in response to the pandemic. By giving tenants access to loans to cover a maximum of nine months worth of rent arrears and long repayment terms, it provides another option for people who have lost out financially due to the pandemic, but who can’t claim support from other means, such as welfare benefits.

Applications for the Tenant Hardship Loan Fund can be completed online.

Private landlords can learn more about renting and your rights during coronavirus here.

Loans will be available for social and private tenants up to a maximum of nine months’ rent costs covering rent arrears and future rent, where those arrears have arisen since 1st January 2020 (the loan will not be available where a tenant had rent arrears before this date). The loan can include up to a maximum of three months of future rent payments as part of the nine-month total.

The loan provides an additional short-term offer that supports tenants to manage rent arrears and helps them to come back into paying their rent. Loan repayments will be deferred for six months as standard and repaid over a five-year period. This recognises the continuing uncertainty around the impacts of the pandemic.

The Tenant Hardship Loan Fund offers will be subject to an affordability assessment as part of the Scottish Government’s commitment to responsible lending. The affordability assessment looks at the applicant’s incomings and outgoings to check whether the applicant has enough surplus income, after other costs, to make the loan payments.

The application process for the loan highlights that there may be other more appropriate financial support options available to them and will signpost people to sources of further advice and support before making an application.

The Fund is part of the range of support and interventions in response to the pandemic, including the extended notice periods within the Coronavirus (Scotland) Act, introduction of private landlord pre-action requirements and the increases to Discretionary Housing Payments (DHPs), along with interest free loans for landlords.

PRS Landlord (non-business) Covid19 Loan Support

The Scottish Government has published this update to the landlord loan scheme, saying:

“No landlord should evict a tenant because they have suffered financial hardship due to Covid-19 and landlords should be flexible with tenants facing financial hardship and signpost them to the sources of financial support available.

“Tenants will still need to pay their rent and measures have been put in place to help people who are facing financial difficulties as a result of the Covid-19 outbreak, but we know it will take time for these measures to kick in and landlords could be facing delayed or loss of rental income.

“To support landlords, the PRS Landlord (non-business) Covid-19 Loan is available to assist landlords experiencing interruption to normal monthly rental payments.”

General guidance on coronavirus (Covid-19) for private landlords and letting agents can be found here – https://www.gov.scot/publications/coronavirus-covid-19-landlord-and-letting-agent-faqs/

The PRS Landlord (non-business) Covid-19 Loan will provide short-term support for landlords where tenants are having difficulty paying rent as a result of the impacts of Covid-19. Landlords should be engaging with their tenants to manage these difficulties and this loan is intended to support them to do this.

The interest free loan is available for PRS landlords who:

• were, or had applied to become, registered before 01 February 2020
• are not classified as businesses
• have 5 or fewer properties available for rent
• properties available for rent are classed as being within the private rented sector (as per the terms of the 2006 Housing Scotland Act)
• have lost rental income as a result of tenants facing difficulty in paying rent as a result of the Covid-19 situation or where a rental property became vacant on or after 01 August 2020 and the landlord is unable to get a new tenant because of the restrictions currently in place.

The loan scheme funding may be used to pay the mortgage on a rental property where your mortgage lender is unwilling to provide a mortgage holiday or to pay living expenses that would usually be covered by the lost rental income. This includes where the rental property has no mortgage or you are covering mortgage payments by other means.

The loan scheme will cover lost rental income for up to 3 properties although landlords will be able to indicate if they are losing rental income from more than one property.

Landlords will be able to apply for a loan to cover lost rental income for a period of up to 6 months, backdated to the 01 August 2020. An initial payment of half of the agreed amount will be available and landlords will be asked to verify the continued loss of income before the second instalment is paid.

Loan repayments will be deferred for 6 months, with the loan being repaid in 24 monthly instalments. The loan can be fully repaid at any point and requests for extension of the payback period will be considered on a case by case basis.

The loan is intended to provide an option where other forms of financial support are unavailable to the landlord. Where a landlord is eligible for other forms of support – for example the Coronavirus Self-Employment Income Support Scheme – then they would be expected to take these up rather than apply for this loan.

Mortgage lenders are making repayment holidays available in line with UK Government commitments. In the first instance, landlords facing difficulties with mortgage repayments for a rental property are expected to seek a mortgage repayment holiday from their lender rather than apply for this loan.

In all circumstances, landlords should engage with their tenants, as detailed in the Coronavirus Guidance (Covid-19) for private landlords and letting agents. Although landlords cannot compel tenants to access the available support, it is beneficial to engage with tenants experiencing difficulty to raise awareness of the help that is available to them.

Where the landlord is applying for this loan in respect of loss arising from their tenant being unable to pay their rent, it is expected that they will have discussed rent issues with the tenant and reached agreement on managing rent arrears before they apply for the loan.

The Budget

Chancellor Rishi Sunak delivered his Budget earlier this afternoon and EQ’s Property Taxperts have briefly summarised the main issues for landlords.

The good news:

• No apparent increase in Capital Gains Tax (CGT)
• Income tax, NIC rates frozen along with personal allowances for 2021/22
• No increase in Corporation Tax for smaller companies with profits of £50,000 or less with effect from 1 April 2023
• Freeze in current Corporation Tax rates up to 31 March 2023
• Inheritance Tax (IHT) thresholds to remain up to 5 April 2026 (at least)
• Pension limits remain unaffected
• The Coronavirus Job Retention Scheme has been extended until September with no changes to terms for employees. From July, 10% employer contribution added and 20% for August and September
• The £20-per-week boost to Universal Credit will be extended until the end of September

The bad news:

• Corporation Tax rise to 25% with effect from 1 April 2023 for larger companies with profits of more than £250,00
• Tapered increase in Corporation Tax, with effect from 1 April 2023 for those companies with profits between £50,000 and £250,000
• Further anti avoidance legislation (a detailed review of Government press releases in this respect will be available later today)
• Stamp Duty relief was extended in England, but as announced in the Scottish Budget, the Scottish Government did not extend the relief to LBTT in Scotland

Given the bad news for landlords in previous Budgets, today’s Budget has a much lower impact for landlords which is no doubt welcome news.  Whilst the Corporation Tax rise is disappointing, the rate remains low and may simply mean that corporate landlords reconsider their remuneration and investment planning.  For landlords intending to sell properties, the retention of Capital Gains Tax annual exemption limited, and no rise in CGT rates is welcome news, along with the incentives for first time buyers.

Head of EQ Property Tax, David Morrison, commented, “The Budget was perhaps most significant for the freeze in certain areas such as CGT, IHT and Income Tax.  Whilst Corporation Tax rises may prove challenging for some, nevertheless business owners will have some time to plan for these changes.  EQ’s property tax team will be happy to discuss matters with any SAL member and we will provide further updates on our website – www.eqtaxperts.com – over the coming days. 

Alternatively, please contact us at taxation@eqaccountants.co.uk and one our Property Taxperts will get in touch with you. More details of any relevant anti avoidance rules affecting landlords, will follow.

Hope that you are staying well and keeping safe.

This week seems to have passed very quickly.  It was the first week of the month which is busy for payments and check ins. I had several training courses combined with on line events through the week, all ways to keep busy and up to date with the current rules and legislation.

Any problems, questions or queries, please email into admin@glasgowpropertyletting,com and the office number is 0141 221 3990.

Kindest Regards

Michelle O’Donnell

Branch Manager

 

17 Elmbank Street

Glasgow

G2 4PB

0141 221 3990

Registration number LARN1903009

VAT : 174415411

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