So you have bought a property and need to get it ready to let. How far should you go with a refurbishment? There will be several factors to be considered.
Who is going to do the work? If you can do it yourself, so much the better as this will keep costs down. Otherwise you will need to get some quotes from professionals.
It is the start of a New Year and the time for considering how you can improve things in your life. If you are a landlord, you might consider these questions:
Are you happy with the service you get from your current letting agent?
I know that this is a contentious issue for both tenants and landlords. It is estimated that 90% of independently adjudicated cases are awarded to the tenants and it is often the case that a landlord has unrealistic expectations of what constitutes fair wear and tear.
At the end of October the government launched a consultation looking into ways of making the house buying and selling process faster, cheaper and less stressful.
I was shocked recently to read in the papers about a lady who decided to leave the buy-to-let market for a variety of reasons, including the new tax increases. What was upsetting was the abuse she subsequently received online, including her Facebook page, primarily for her simply being a landlord.
Of course all landlords are not perfect and there are a fair number of rogues out there. There are plenty of rogue tenants about too, of course.
It is not something that everyone will be aware of, but I am pleased to say that we are members of a redress scheme overseen by the Property Ombudsman.
Back in October 2015 the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015, known as the ADR regulations, officially came into force.
Tenants deposit fees are non-refundable.
Payment of Rents Due:
Tenants paying rent will only be refunded if the rent is found not to be due. Refunds will be made back to the card from which they were paid and will be paid within 7 days of funds being requested for refund and accepted by Charles Carter Lettings as being owed.
In All Cases:
If any refund is deemed due by Charles Carter Lettings, refunds can only be made to the card that was used to purchase the goods and/or services.
I read about an interesting case the other day concerning a landlord who was querying some requests made by the tenant of his terraced house.
Over just a couple of months the tenant requested call outs to clear a blocked drain and to deal with two mice infestations. The landlord was enquiring whether these calls were justified and if they were in fact his responsibility.
I was interested in a recent article on the Letting Agent Today website. It concerned the recent suggestion that tenants are seeking tenancies of five years or more.
It looked at a survey carried out by insurers Cover4LetProperty which made these interesting findings:
• 48% of tenants have lived in two or three different rented properties in the last five years.
• 47% of renters have lived in the same property for the last five years or more.
• 5% have lived in four or more properties in the last five years.
I realise it may seem like an ideal situation to let your property to someone you know, such as a friend or family member. The key, however, is to always remember that this is a business arrangement, not a favour.
Many agents will advise against it and some mortgage lenders absolutely forbid it. Problems can arise when one party or the other forgets that this is a legally binding situation and even the best of intentions can go wrong.
Bristol Charity for Vulnerable Tenants tops list of UK’s Most Prosecuted Landlords!
I spotted a recent article in The Guardian that reported a Bristol-based charity has topped a list of the most prosecuted landlords in the country.
Alternative Housing was set up to provide accommodation for homeless people in Bristol and has received thousands of pounds in housing benefits. It has been convicted of housing offences on six separate occasions in the past two years.
I am often asked by landlords which type of mortgage they should go for. My answer is that it depends what you want to achieve.
In effect there are two ways of using mortgage, a traditional repayment mortgage where you pay down the amount of the loan over time or where you use the value of the property to raise money, known as leverage.
With a traditional interest only mortgage you have the choice of what you do with the rental profits after deducting expenses. One option is to save money in order to pay off a part of the mortgage. Alternatively the money could be put towards purchasing another property.
I have heard a lot of talk recently about the benefits of transferring Buy to Let properties to a company. While there are certain tax advantages there are other factors which may make such an option less attractive.
New rules come into effect next month which will restrict the amount of mortgage interest that can be deducted when calculating profits from rented properties for tax purposes. In addition companies also pay Corporation Tax of 20%, reducing to 17% by 2020, as opposed to personal taxation levels of 20%, 40% or 45%, depending on personal circumstances.
Clearly there are tax advantages to transferring to a company but there are disadvantages too, starting with Capital Gains Tax (CGT).
In the next five years rents are expected to rise faster than house prices in the UK.
I read that the Royal Institute of Chartered Surveyors (RICS) are predicting rents will rise by 25% over that period compared with property price rises of 20%. They also reported increased tenant demand for rental properties in the three months prior to January.
The stamp duty changes and tougher mortgage rules may be deterring some landlords from purchasing new properties. Indeed, RICS reported a drop in new properties being offered to let for the fourth quarter in a row. Fewer properties coming onto the market will inevitably lead to rising rentals.
As house buyers struggle to find affordable properties to buy, rentals look set to outstrip the sales market for the first time since before the Second World War.
I read recently that the UK’s largest estate agency chain, Countrywide, has acknowledged that the sales market cooled dramatically at the end of 2016. There was a boom in March as landlords attempted to snap up properties before the changes in Stamp Duty.
I was pleased to learn recently that, despite the punitive tax changes imposed by the government, landlords confidence in the private rental sector is on the up.
Savings specialists Kent Reliance have published their latest Buy to Let Britain report and it concludes that residential landlords are predicting a bright future.
The report covers the third quarter of the year and was carried out via a survey of 900 investors. No less than 54% of landlords are confident regarding the prospects of their property portfolios. This compares favourably with the figures for the second quarter which reported a record low of just 39%. This was deemed to be a direct result of the increase in Stamp Duty.