At our March Property Meet we welcomed Matthew Evans the Revenues and Benefits Manager from Wrexham Council as our main speaker and also had updates on recent developments affecting landlords from Richard and an update on the current financial market from Mark Heywood of Watts Commercial Finance.
Richard highlighted changes coming in, in relation to long term empty homes which will see 50% more council tax being payable once a property has been empty for more than 12 months.
Mark Heywood introduced himself and explained what Watts are able to offer to landlords. He stated that they are really busy at the moment due to the changes coming into force on the 1st April in relation to Stamp Duty Land Tax; they have 94 purchase completions to get through today (31st March) !
He highlighted the recent news from the Bank of England which stated that they want to reign in buy to let lending. He stated that to put this into perspective, it doesn’t overly concern commercial banks because they have a cautious approach to lending to begin with. The news is more aimed at residential buy to let lenders. Buy to let lending represents 16% of the residential lending market. He explained that the Bank of England are aware of people over committing themselves and don’t want a repeat of 2008. The maximum amount commercial banks will lend is 75% of the purchase value. Most banks now want to see your last 6 months bank statements. He stated that the banks they use will not allow you to over commit. Watts tend to pre underwrite their applications before submitting them to the banks. The banks approve 1 in 10 applications so they really do cherry pick. Furthermore it’s not a given that the banks are going to lend you money, they look at every aspect of your personal finances and your life.
Mark concluded by saying that Watts would love to help if they are able to. If you have any questions or should you wish to contact Mark his details are as follows:-
Tel: 01270 611000
Mobile: 07855 217508
E Mail: firstname.lastname@example.org
We then turned to our main speaker for the morning, Matthew Evans from Wrexham Council.
Matthew introduced himself and explained his current role within the council. He picked up on Richard’s update and stated that the increase in council tax for long term empty homes was coming into effect as from April 2017. He explained that if a property was for sale and had been for over 12 months the council would look at whether it was being marketed at a reasonable market price. He went on to state that there are approximately 200 long term empty properties in Wrexham. Conwy County Borough Council will be imposing this additional council tax on not only long term empty homes but on second homes in addition; Wrexham will not be including second homes.
Matthew advised that hi colleague Sion Wynne deals with empty home loans and he would be writing to people to inform them of these loans and to offer help via the empty home loans. Matthew stated that each and every case will be different; at the moment there are some empty properties which are in a bad state of repair. Finally he concluded by saying that there will be a right of appeal against the additional 50% in council tax being imposed on long term empty properties.
Matthew moved on to talk about Local Housing Allowance (LHA) and asked whether the landlords who rent to tenants on benefits receive the LHA direct, there was a mixed response. He advised that if the rent is in line with LHA or below the LHA rate then the council can pay direct to the landlord in order to sustain it. Likewise if a tenant has potential vulnerabilities it can be paid direct, it all depends on the nature of the tenants you have living in your property.
He asked whether any landlords had any tenants who were on Universal Credit (UC) at the moment, there were none. Matthew explained that in relation to single claims UC had been live since March 2015, about 70 people in Wrexham are receiving housing costs. UC is paid in arrears therefore it is 5 weeks before the recipient gets paid. UC only applies to single claims at the moment but this is being rolled out, the earliest we can expect to see it in Wales is early 2017. Any new claims will receive UC and if anyone has a change, for example to their address or their benefits then they will be switched to UC. In the majority of cases if the landlord is being paid direct then this will change. There have been changes to UC from April and lots of the benefits are changing. Someone who was in receipt of benefits used to be able to keep the first £1,300 if they worked, however this is being removed. In addition if for example someone is working 10 hours per week, they will be asked to see if they can increase their hours and if no reasonable attempt is made to do this, then their benefits will be sanctioned. Matthew explained that the ethos behind UC is that the government is trying to make it into a pay packet mentality. The award letter only shows what the person has been awarded so they will have to budget. Credit Union accounts are good, however there are potential changes to those, coming about in the future.
Matthew highlighted some potential benefits for recipients, namely they can apply for discretionary housing payment (DHP) which is in effect a top up. In deciding whether or not to award such, the council look at the person’s financial circumstances. DHP is a short term award not a long term solution and can be granted for 3-6 months. In autumn this year the benefit cap will be coming in around November time. The cap is currently £26,000 and will be reduced to £13,400 for single claimants and £20,000 for couples. Approximately 200 people will be affected in Wrexham, the council will be writing to those affected in May/June time and will be trying to work with them. It is mainly people with large families who will be affected. The cap only restricts housing benefit and not DWP benefits. Further changes which are being introduced are as follows; in relation to backdating of claims. As from April a claim for housing benefits can only be backdated for 1 month and not 6 months as was previously the case. The family premium is to be removed from May for new claims, this is currently £26 per week.
Matthew informed us that from May claimants will be able to claim online and they will have 1 month to provide any missing information if the council go back to them for such. The council is struggling with staff shortages at the moment with some applications taking 10-12 weeks to process; at the moment it is taking 10 days to look at the initial application.
Should anyone wish to contact Matthew his contact details are as follows:-