The Chancellor announced in the Autumn Budget that Councils would be allowed to charge the landlord of an empty property 100 per cent of the Council Tax, rather than the current 50 per cent.
The reason given by Mr. Hammond is that it is grossly unfair that properties should be left empty whilst there is so great a need for accommodation. He is right, of course, but more properties are left empty by the extremely wealthy (and therefore well able to pay the Council Tax) than by the hard-working private landlord.
Why do any landlords choose to keep properties empty? Perhaps it’s because of the years that the private sector landlord was castigated by the Government for anti-social tenants, placing the blame squarely on poor management skills and landlord greed. Landlords were advised not to take tenants without full referencing, taking the time to interview prospective tenants. How likely is it that landlords will be happy to act on this, if they will be faced with the Council Tax debt? They will be even less likely to want to have void properties.
I had an interesting conversation with a landlord last week. He has been in the business a very long time, practices good management and is one of those landlords that would prefer long-standing tenants than risk taking a bad tenant who could pay a higher rent. The tenant he wanted to discuss had been with him over 11 years. He and his wife had come as newly-weds and over the course of time had a baby. They were good tenants, in that they did no damage; on occasion, they fell into arrears, some of which they made up, some of which the landlord forgave, because of the long and trouble-free tenancy.
The problem was that the tenant had now fallen 11 weeks into rent arrears. This was partly due to the fluctuating earnings the tenant had as a self-employed gardener. The tenant was, of course, in sufficient arrears to warrant a section 8 notice being issued, but the landlord was hesitant to do this, in view of the circumstances and the proximity to Christmas. The landlord could apply to have the rent paid direct to him, but that is of little use if the claim is disallowed or if the amount of benefit does not cover the rent.
More discussion and conclusion reached – he was a decent chap, the rent was not so high that its’ loss made a significant difference to the landlord and after all, the Council Tax would be a considerable sum to pay, if the property was left empty. He felt he was better with a tenant looking after the property, even if the full rent was not paid.
It was the landlords’ choice, but if more landlords find themselves in the same position, how does this accord with Landlords taking responsibility for their tenants’ behaviour? Surely, some encouragement for landlords to keep their properties empty whilst the right tenant is found, would be a better way of urging landlords to take time in choosing who to entrust their properties to.
Logic says yes, but we are left with the view that the right hand does not know what the left is doing, or that there is any relationship between them.
For advice on buy to let issues – Ask Sharon