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financial conduct

Rogue landlords risk banning orders from April 2018

A new database of rogue landlords and letting agents will be launched in England next Spring, as the government introduces banning orders for those who fail to protect tenants. Originally announced in 2016’s Housing and Planning Act, the legislation is now set to come into force in April – as long as its regulations are approved by parliament in the new year. Here, we explain how the banning orders will work, and offer advice on how to meet your responsibilities as a landlord.

  • Whether you’re a first-time investor or a buy-to-let pro, you can get advice on finding the right mortgage by calling Which?

    Mortgage Advisers[1] on 0808 252 7987.

Banning orders to be introduced

From April next year, a new database will name landlords who have been banned from letting property, or have been convicted of an offence that prevents them from letting or managing one. The Department for Local Communities and Government (DCLG) has provided details of breaches that can result in landlords being banned. They include:

  • Illegally evicting or harassing a tenant
  • Using violence to enter a property
  • Failing to comply with improvement notice/prohibition order
  • Failing to adhere to HMO (houses in multiple occupation) rules or management regulations
  • Providing false or misleading information
  • Failing to adhere to an overcrowding notice

Those given banning orders won’t be able to earn income from lettings or work as part of managing agents.

At this stage, it isn’t clear whether the database will be available to the public.

Your responsibilities as a landlord

As a landlord, there are a series of things you need to do to ensure the safety of tenants living in your property. These include:

  • Maintaining heating and water systems and bathroom installations
  • Having a gas safety check done by a registered engineer each year
  • Ensuring electrical circuits and appliances are safe
  • Ensuring furniture meets fire-safety regulations and testing smoke detectors
  • Carrying out a condition check at the start of the tenancy

You’ll also need to ensure your tenants are living in the UK legally under ‘Right to Rent’ laws, and will need to adhere to any licensing systems[2] put in place by your local authority.

With this in mind, some landlords choose to appoint a managing agent[3] to look after their property on their behalf.

Becoming a landlord

With a raft of new affordability legislation and taxation changes coming in to force in the last couple of years, starting out as a landlord has become a more complicated and expensive business. Before considering property investment, make sure you do your research on the local market (including likely capital gains and rental yields), and check out our guide on 12 things buy-to-let landlords need to be aware of[4] to get to grips with how time-consuming a pursuit property investment can be. Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029).

Which? Mortgage Advisers and Which? Money Compare are trading names of Which?

Financial Services Limited.

References

  1. ^ Which?

    Mortgage Advisers (mortgageadvisers.which.co.uk)

  2. ^ licensing systems (www.which.co.uk)
  3. ^ appoint a managing agent (www.which.co.uk)
  4. ^ 12 things buy-to-let landlords need to be aware of (www.which.co.uk)

Death of the cashback card? Nationwide cuts cashback scheme

New customers to Nationwide’s Select Credit Card will no longer be offered cashback on purchases – while existing customers will see their rates slashed. But can you still benefit from cashback schemes? Nationwide has announced its cashback rate will drop from 0.5% to 0.25% for existing customers from 11 January 2018, and new customers will not be offered cashback at all.

The move follows new EU rules limiting the fees which retailers and card issuers can charge. Which? looks at other cashback deals on the market and why card issuers are winding down their cashback schemes.

What cashback deals are available?

Currently, the Nationwide Select Credit Card offers one of the more competitive cashback deals[1] on the market – but cutting the rate to 0.25% will move it to the bottom of the pack. A number of other providers offer cashback deals which pay 0.5% or above on purchases.

But bear in mind that benefits like cashback are only one element of choosing a card – you should also consider the APR, which shows you an annualised interest rate, and any card fees. The Santander card, for example, charges a ?180 fee.

Why is Nationwide cutting its cashback scheme?

Nationwide is just the latest in a long series of providers who have withdrawn cashback offers in recent years. CapitalOne ended its reward cards in April 2015, with RBS and NatWest ending their ‘YourPoints’ scheme a month later.

Santander withdrew its 123 credit card in October last year. In June this year, Barclaycard announced[2] it was ending its relationship with American Express, which offered a 1% cashback deal, and moving customers to a Visa card offering just 0.5%. In explaining its decision to curtail the cashback scheme, Nationwide pointed to the decrease in card fees that credit card issuers could charge, which made the program more expensive.

Previously, card issuers were entitled to charge retailers a fee for processing their payments – and this fee was often passed onto customers as a 2% to 3% surcharge. Since the end of 2015, card issuers have faced a cap on the fees charged retailers, currently 0.3% for credit cards. From 13 January 2018, retailers will also be banned from charging customers[3] a fee to use their cards online or in stores.

Both changes are part of a raft of EU regulation aimed at improving payment services. As a result, the cost of transactions has been rising for card issuers, who have begun scaling back on ‘perks’ – including cashback. Other card providers are likely to face similar financial pressures in coming months.

Should I get a cashback card?

When choosing a credit card, cashback deals can be a tempting money-making offer – but it’s important to look beyond the perks.

If you can’t clear your balance monthly, interest payments are likely to wipe out any rewards you’ve received. You may also have to shop at certain stores, or use certain airlines to get the most benefit – and these won’t always offer you the cheapest deals. The Which?

Money Compare credit card tables[4] let you search hundreds of cards from providers large and small to choose a great deal based on quality of service as well as cost and benefits. Which? Limited is an Introducer Appointed Representative of Which?

Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which?

Money Compare are trading names of Which?

Financial Services Limited.

References

  1. ^ cashback deals (www.which.co.uk)
  2. ^ Barclaycard announced (www.which.co.uk)
  3. ^ banned from charging customers (www.which.co.uk)
  4. ^ Which?

    Money Compare credit card tables (moneycompare.which.co.uk)

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