LETTINGSnews
RESULTS
Paragon reports strong results
The Paragon Group of Companies PLC, Paragon Mortgages’ parent
company, announced its
results for the first half of the year ending 31 March 2012, with profits increasing by 13.4 per cent to £44.8m from £39.5m. With £87.2m of new buy-to-let loans advanced, John Heron, Managing Director, said, “The Group delivered a further period of growth during the first half of the year, with an increase in profits. “We have seen a sustained level of buy-to-let mortgage business during the year and we also successfully completed our first securitisation since 2007 which was also the first deal consisting solely of buy-to-let loans by any lender in the UK since the credit crunch. “The first half of the year was
successful in terms of the level of applications received for buy-to-let loans, from both new and existing customers, following the introduction of 50 new products launched in January. “Our strategy for the rest of the
year is to build upon the success of the first six months, generating further buy-to-let business and keeping our low level of arrears across all of our loan portfolios.”
TAXATION HMRC knocking on landlords’ doors
HMRC has announced that private landlords can expect a knock on the door in the coming weeks as it launches a special task force to investigate and recover up to £17m in unpaid taxes. Whilst specific details on the scope of the taskforce are yet to be announced, it is likely to focus on landlords providing temporary accommodation and those with houses in multiple occupancy (HMOs). The taskforce is initially focusing
on private landlords in East Anglia, London, Leeds, York, Leicester, Nottingham, Lincoln, Durham and Sunderland, but could, as
54 JULY 2012 PROPERTYdrum
accountants James Cowper warn, be easily extended to cover the whole country. Stephen Barratt, Private Client Director said, “Landlords can reasonably expect HMRC to gather information from across government departments, and many other sources including press and internet advertisements, universities and colleges. HMRC is also using increasingly sophisticated techniques to identify those who are not paying sufficient tax and the chances of going undetected are rapidly vanishing.”
And it is not just unpaid income
tax that HMRC will be looking for. Many landlords providing temporary accommodation – perhaps to seasonal agricultural labourers, students or even homeless people – may find that a sizeable VAT liability is incurred. Ruth Corkin, Head of VAT Services at James Cowper adds, “Many landlords may not realise that VAT is chargeable on temporary accommodation as HMRC treats it in the same way as hotel or guest house accommodation. Landlords may not be registered for VAT when they should be and so could face a back-dated VAT claim.”
TRAINING Northwood’s apprenticeships
The lettings agent Northwood has submitted a bid for Government funding of
£250,000 to kick-start an industry-wide, industry-owned initiative that would deliver apprenticeships with training and development programmes tailor-made for the lettings and management sector. The aim is to raise the profile of the lettings industry as a credible career choice for young people and to provide a clear pathway to increased professionalism. The grant, part of the
Government’s Employer Ownership of Skills Pilot Fund, would enable the industry to develop a flexible alternative to the traditional property management apprenticeship, facilitate easy access to critical skills development across the
sector (particularly for small firms) and signpost a clearly defined career path for those entering the sector. Nick Cooper (pictured below), MD of Northwood said, “There needs to be a more flexible and joined up approach to apprenticeships that is more accessible for all and that can be owned and delivered by firms themselves. “As established agents, we
have a responsibility both to our staff and to our landlords and their tenants to deliver the highest professional practices. As such, we will continue to support the need for increased investment in innovative and flexible training opportunities. For us all the constant challenge is to grow our businesses and sustain jobs for the future while also raising professional standards across the sector.”
LEGISLATION
BTL loans saved by EU decision
MEPs at the European Parliament have agreed to remove buy-to-let mortgages from the
scope of a new EU Directive. Under the original plans, which would have had a serious impact on the BTL market, lenders would no longer be able to take account of rental income when considering whether to lend to a landlord for a new property. After lobbying from industry bodies in the UK, including the Residential Landlords Association (RLA), the European Parliament committee looking at the Directive has now decided that buy-to-let mortgages would be taken out of its scope altogether. Alan Ward, Chairman of the RLA
said, “Today’s decision by MEPs represents a common sense solution to a measure that would have crippled the private rental market in the UK. “With a chronic shortage of properties in the sector, the initial proposals would have exacerbated the problem still further, causing further difficulties and higher rents for those looking for homes.”
Lenders could not have considered rental income!
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