The Proposed Landlords Database, How Will it Affect You?

Nobody really seems to know what’s happening with the proposals for a national landlord database, although the legislation is due to be introduced in autumn 2009. It’s widely believed that when the proposals are introduced, every single landlord in England – and that includes everyone from the accidental landlord to the property developer with a huge residential portfolio, will at the very least have to pay a £40 fee to register with a national body.

It’s likely that every landlord who is on the database will find themselves having to comply with yet another set list of requirements and standards, and if they are found wanting in any area they will be removed from the list and not permitted to carry on business as a landlord, or offer their properties for rent. Even if they own more than one property and only one of them is found to breach the conditions.

Full details of the scheme are due to be revealed in a green paper on 24 September. For more information on the progress of the green paper, you can go to: www.publications.parliament.uk

Different Measures Across the UK

As it stands at the moment, each of the four countries in the UK seems to be adopting a different approach to the issue of a central database for private landlords.

• In England, the Government seems to favour a nationally run register which will include details of every landlord’s name and address, in addition to a list of every one of their rental properties. Landlords will have to apply to re-register on the landlord database annually, and they will receive a unique identifying number that they will be able to use on tenancy agreements, housing benefit applications or on any legal documents relating to a tenancy agreement, such as repossession proceedings.
• In Scotland, a register of private landlords has been in place since 2006, and it’s a criminal offence not to register on it if you are a private landlord. It’s proved to be ineffective so far, given that an estimated 25 per cent of landlords have not bothered to register. The responsibility for enforcing registration falls to local authorities who just haven’t been able to keep up with the paperwork.
• Northern Ireland has rejected the idea of a landlord registration scheme entirely.
• Wales has no plans to introduce any landlord database either.

Tax Implications for Live in Landlords

While a national landlord database may seem like a good idea for weeding out rogue landlords and people who take advantage of tenants, there is also the fear that a landlord database could help Revenue and Customs (HMRC) get their hands on information that will allow them to check up on homeowners who are letting out a room in their property to make ends meet.

It’s been confirmed that HMRC will be given access to the English landlord database, and although it’s not been confirmed yet that rent-a-room landlords will have to register, it is a distinct possibility – Whitehall has yet to say one way or another.

The existing rules mean that if you rent out a room, or rooms, you can charge up £4,250 a year tax free, which allows you to charge a rent of up to £81 a week. Some greedier landlords with lodgers have been charging rents of up to £200 a week without notifying the Revenue – and it’s these landlords who are most likely to be clobbered by a massive tax bill when the landlord database comes into force and the Revenue start making enquiries.

Officials from the Department of Communities and Local Government have said that the new regulations were not intended to be a revenue raising measure, but that they were simply intended to give local authorities more powers to tackle unscrupulous landlords.