RLA : RPI : Increasing costs

News from the Residential Property Investor, the bi-monthly magazine for RLA members

other artilces from the December 2000 / January 2001 issue

Increasing costs - December 2000 / January 2001

The cost of supplying property to private sector tenants is increasing at an alarming rate. Most of the costs are associated with stealth taxes, increasing local 'taxes', and regulation creep.

With the average property costing more than £100,000, stamp duty on purchases is now beginning to bite. Stamp duty is also payable by landlords and tenants on lettings of more than £94.16 per week. Changes being introduced in April by the Inland Revenue, detailed elsewhere in this issue, will also drive up the cost of accommodation.

In Scotland, where licensing has been introduced, landlords are reporting that it can cost £1,800 to comply with registration. Compliance with registration requirements has hidden costs associated with appealing against wrongful council decisions and poor administration, particularly where special control provisions are in force.

The requirement that all single asylum seekers' shared accommodation must comply with all local council HMO dictats is also an unnecessary cost. Asylum seekers who share accommodation do so after signing service user agreements to share, and so should be exempt from such regulation.

The cost of letting to housing benefit tenants has increased dramatically due to regulation creep. In some areas it now takes 10 times the effort needed to manage a private let to manage a housing benefit let.

Even the proposed new 'sellers pack', which it is suggested will speed up the buying and selling process, will increase the costs of operating in the private sector.

Tenants will have to meet these costs eventually, either through higher rents or lower standards.

Martin J Moylan

other artilces from the December 2000 / January 2001 issue