Buy-to-Let Business Owners MUST Pay N.I.C’s

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If your accountants have advised you that you don’t need to pay National Insurance Contributions they are probably wrong, definitely so if you are deemed to be running a business. The good news is that you have probably only been liable for Class 2 National Insurance which is £2.85 a week, so the financial hit isn’t going… Read more

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#LANDLORDS – Are You Running A Business? THIS IS VERY IMPORTANT

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This is an extremely important question, especially for landlords who are considering incorporation.  This is because relief to roll capital gains into shares at the point on incorporation is entirely dependent upon you being a business. Also, you must be a business to be able to claim partnership exemptions on Stamp Duty or LBTT at… Read more

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Rumble with the Agents raises £18k for Noah’s Ark Children’s Hospice

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On Thursday 25th May 2017 ‘Rumble with the Agents’, an annual white collar charity boxing event in association with Landlord Action and sponsored by Hamilton Fraser, raised £18,000 for Noah’s Ark Children’s Hospice. The sell-out event, which took place at The Holiday Inn Finchley Central, brought together a room filled with property professionals, including estate/letting… Read more

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Editorial, May 2017

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As Election Day fast approaches and media reports indicate that the vote divide is narrowing, many people are getting a bit twitchy about the possible outcome.

Will it be the right result for the country at a time when we are entering critical Brexit negotiations with Europe? How will any new regime be constituted, be it Conservative, Labour or a Coalition hammered out after a hung Parliament? Will the in-out squabbles continue after the negotiations begin, will Europe and Brussels extract its “pound of flesh” helped by a divided nation?

Most importantly, how will any new regime approach the property industry: will it be the rent controls and long-term tenancy security promised by Labour, or perhaps more of the same tax penalty anti-business rhetoric from the Conservatives?

Otherwise, we are in bit of a state of limbo until after the election with all the ongoing PRS regulatory issues, and such things as the banning of tenant’s agency fees.

Our Election Poll in this issue gives you a change to air your preference, to give us some sort of steer as to the way things will go. Our last such poll, at the time of the referendum, gave us a surprisingly accurate forecast from the property fraternity that the majority would vote to leave.

Tom Entwistle, Editor.

… LandlordZONE.

View Full Article: Editorial, May 2017

The great outdoors

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The experts at Belvoir reveal seven simple steps to making the most of your outdoor space if you’re remarketing your rental property this summer

Providing appealing outdoor living solutions for tenants can help add a premium to your rental property. However, following the long winter months, most outside spaces will need a little extra help so give your garden an annual MOT maintenance makeover now…

1. Pest control

Weeds can infiltrate flowerbeds, pots, gravel, lawns and even patios at speed so it’s important to keep on top of the problem before it grows.

“An abundance of unsightly weeds can make even the nicest of outside spaces look uncared for and unkempt,” says owner of Belvoir Bury St Edmunds and Belvoir Norfolk Patsy Day.

“They instantly affect a property’s kerb appeal and if yours appears tatty on the outside, potential tenants will undoubtedly question what it looks like on the inside.

“There are a variety of ways you can help stop weeds in their tracks,” she continues. “Remove them by hand (including the roots), try a topical weedkiller, or help prevent their ability to grow and spread by laying a weed-suppressing membrane or tightly packing borders and beds with ground-covering plants and shrubs.”

Pay particular attention to signs of Ivy and Japanese Knotweed too. These invasive and destructive pests can quickly suffocate surrounding plants, plus cause damage to nearby infrastructure, guttering and drains.

2. Cutting back

Fast-growing shrubs, trees and bushes can quickly get out of control so take preventative action now.

“To make the most of your outdoor space cut back overgrown shrubs, bushes and trees,” says owner of Belvoir Nuneaton and Hinckley and co-owner of Belvoir Tamworth Clayton Foston.

“Not only will this make your garden look larger and neater it will also free-up space for other plants to shine, plus prevent a potential safety hazard to your tenant and property.

“If any of your trees or bushes are already out of control it’s advisable to seek professional guidance.”

3. Clean sweep

After the long cold snap it’s time to win the war on winter debris.

“During the winter months dead leaves will fall and debris will gather in most gardens,” says Patsy. “In addition to making your garden look untidy, if left it can also pose a slipping risk, plus provide snails and slugs with a place to hide.

“Give your garden a good spring clean to keep it looking at its best. Rake up, sweep up or invest in a leaf blower, disposing of the debris appropriately, perhaps on a compost heap.”

Remember to check guttering and drains too. Blockages from winter debris are a commonplace occurrence and, if ignored, can cause damage to the fabric of your property.

4. Create some colour

Nothing shouts summer more than a colourful visual feast of flora and fauna.

“An array of colourful plants, shrubs, containers and pots all add a touch of summer impact and desirability to a garden,” says Clayton.

“They add interest, texture, colour and fragrance as well as attracting summer wildlife, such as butterflies, birds and bees.

“A colourful garden, with a well-thought through scheme, can add visual appeal for a tenant and can brighten up even the smallest of spaces.”

5. Seating plan

With outdoor living becoming more and more popular offering a stylish outside seating area can help ‘sell’ the indoors-outdoors lifestyle.

“Most tenants will want a defined space where they can dine alfresco with family and friends throughout the summer months,” says Patsy.

“Patios or paved areas are particularly popular, as is raised decking. Before committing to an outdoor dining solution, however, always consider the initial costs, plus potential longevity and possible maintenance needs.

“Decking, for example, can be slippery in winter, plus will need regular applications of wood treatment and periodical checks for signs of decay or rot.”

6. Safe and secure

Well-maintained boundaries keep a garden self-contained, adding an extra layer of security and privacy to a property.

“Are your boundaries and borders safe and secure?” asks Clayton. “After the rainy and windy season, check out boundary walls, fences and trellis for signs of deterioration or decay and repair as necessary. Likewise, look out for loose panels or posts which could pose a safety risk.”

Patsy agrees. “Always ensure your boundaries are well-maintained and, if you’re unsure which are your responsibility, find out now,” she says. “If you find an issue with a boundary which belongs to a neighboroughing property it’s advisable to make sure that the owners are aware of it.”

7. Maintenance made easy

How maintenance-friendly is your garden?

“Not all tenants will have the time, desire or skills to maintain an elaborate garden scheme so, however large or small your garden is, creating an easy-maintenance space is advisable,” says Patsy.

“Fast-growing shrubs, for example, plus delicate plants and intricate borders and beds are best avoided. Instead opt for low maintenance options, such as pots and containers, which will be better for your budget and easier for the tenant to look after.

“Before the tenancy starts make sure your tenant is aware of the garden’s needs, plus their own responsibilities.

“And, if your garden is particularly large or high maintenance, offering your tenant the services of a professional gardener may be beneficial.

“Remember, too, that if your incoming tenant is greeted with a neat, tidy and debris-free outdoor space they will be more likely to look after it throughout the tenancy for you.”

Summer checklist… gardens at-a-glance

√ Refresh and renew thinning gravel and soil
√ Mow lawns, dethatch and aerate
√ Win the war on weeds to stop them spreading
√ Look out for destructive Ivy and Japanese Knotweed
√ Trim back fast-growing shrubs, bushes and trees
√ Sweep away winter debris and fallen leaves
√ Add summer interest with the clever use of colour, texture and height
√ Create seating areas to provide outdoor living solutions
√ Check your boundary walls and fences for signs of deterioration or decay
√ Consider the services of a professional gardener if your outside space is particularly high maintenance or large
√ Always ensure the tenant is aware of their responsibilities and your expectations of them during the tenancy

… LandlordZONE.

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How will the proposed ban on letting agent fees impact on buy-to-let landlords?

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It is now more than six months since the Autumn Statement, where the Chancellor laid out plans for another controversial regulation change set to impact on the buy-to-let sector.

During the Statement, Mr Hammond announced that the Government was to ban letting agent fees paid by for by tenants.  Presently, these fees are required to cover costs of imperative administration tasks, such as credit and reference checks.

A consultation on this move was launched on April 7th, which will run until today (June 2^nd).

Reaction to the proposals from within the sector has been mixed at best, with a number of key industry peers set against the move.

Taking this into account, just why has the Government decided to put forward the legislation? How could such a change impact on the rental market? Who could be most impacted on?

Ryan Weston, of Just Landlords Insurance Services, investigates:

Why has the proposed ban been put forwards?

“Chancellor Phillip Hammond announced the ban on letting agent fees to give both a fairer deal for millions of tenants, but also to raise competition within the private rental sector.

The Government wants to get rid of hidden charges that are currently hitting tenants in the pocket, while eliminating rogue letting agents charging extortionate fees at the same time.

Together with raising standards in the housing market, Mr Hammond feels that the ban on agent fees will help 4.3million households in England, by preventing them from paying any fees upfront. These costs average out at roughly £337 per household, according to research from Citizen’s Advice.

How will the proposal impact upon the rental market?

On first glance, many tenants will be more well-off as a result of reduced outgoings and a better sector. This said, many industry peers have moved to voice their concerns.

It is feared that these fees once paid by tenants will be instead absorbed by buy-to-let landlords- leaving many with little option but to pass them back onto tenants in the form of increased rents.

A number of landlords and industry bodies are unhappy at another legislation change impacting on the buy-to-let sector coming soon after other major alterations. These include amendments to mortgage interest tax relief, the full rollout of the Right-to-Rent scheme and the 3% rise in Stamp Duty surcharge for buy-to-let and second homes.

Chief Executive of the National Landlords Association, Richard Lambert has been one to air his concerns, saying he feels that while the Chancellor is, ‘clearly aware of the pressures facing those living in the private rental sector,’ he, ‘lacks an understanding of how the whole sector works.’

Mr Lambert went on to say ‘Agents will have no other option than to shift the fees on to landlords, which many will argue is more appropriate, since the landlord employs the agent. But adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents.’

What about the public’s reaction?

Despite the perceived negativity from leading peers of the industry, the wider public have actually pledged their backing to the proposed ban.

A recent survey from Citizen’s Advice showed that 46% of UK residents feel tenants should not be made to pay admin charges -apart from their deposit and monthly rent – when obtaining a property through a letting agent.

This figure rose to 61% when renting directly from a buy-to-let investor.  The same percentage of respondents believe that tenants should not pay more than £50 to secure a rental property. Unsurprisingly, this figure rose to 74% when assessing results ascertained from private renters.

Nick Marr, co-founder of The House Shop, comments: ‘There is little public support for the current system. Many tenants are prepared to pay a small fee for legitimate expenses involved in securing a property, such as a professional reference check but vague and undefined admin charges that can total hundreds of pounds are tough to defend in the current market.’

Will the impact really be so severe?

It is understandable that a large number of landlords are undoubtedly going to be worried about the impact that the ban of letting agent fees paid for by tenants could have on their overall income.

Typically, it is estimated that letting agents charge buy-to-let landlords an average of 10-15% of their income to pay for their management services.

‘Some landlords will undoubtedly raise their rents as a result of the ban – as we have seen in Scotland – but many will be able to absorb the costs of this new system without substantial losses, meaning tenants should not face a barrage of rent rises once the ban is in place’, Marr observes.’

What does the ban mean for letting agents?

Whilst it would be inaccurate to forecast that all letting agents will not be affected by the proposals, research seems to suggest that the long-term forecast looks to be stable.

A report from the UK Association of Letting Agents (UKALA) suggests that just 9% of landlords plan to leave their letting agent if their premiums were to rise.

This prediction comes despite the fact that 79% of landlords believe that their agent will increase their costs should the ban on fees come into force.

Richard Price, the executive director of UKALA, seems to sums the situation for letting agents up perfectly by noting there is a, ‘tricky path ahead to navigate for agents as they’ll need to balance out the need to cover their costs in the wake of a ban on tenant fees without alienating their primary customers and source of income.”

… LandlordZONE.

View Full Article: How will the proposed ban on letting agent fees impact on buy-to-let landlords?

Evicted lodger belongings?

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Hi my lodger been evicted yesterday, I gave her notice she was agreed to move by end of the month the when the time was to vacate the room then she suddenly changed she said has nowhere to go refused to move police were called then before the police come she disappeared she left her… Read more

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UK start-up InsureStreet helps solve cash deposit crisis

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Trust-based property rental solution:      

London, UK, May 2017 – UK start-up, is set to solve a major issue in the rental market and potentially pump nearly £4 billion of ‘dead money’ back into the UK economy by replacing cash deposits with trust-based deposit replacement insurance – InsureStreet.

• UK start-up aims to pioneer a rental community built on mutual trust and respect

• Digital platform to benefit tenants, agents and landlords, says HISCOX insurance

• Serial entrepreneur Vin Murria among high-profile investors

The app, whose backers include serial entrepreneur Vin Murria and insurance provider HISCOX, presents ‘generation rent’ with an easy and affordable alternative to the often crippling upfront cash deposits required by landlords.

InsureStreet comes at a time when rent rises across the UK have far outpaced wage increases over the past five years – and at a time when more misery is predicted for renters with further steep rises expected over the next few years, particularly in London. However, with a shortage of affordable housing, more and more people have no choice but to rent.

How InsureStreet works:

• Typically, renters are charged a minimum of six weeks’ rent as a security deposit, plus agency fees and a month’s rent in advance.

• InsureStreet provides renters with a digital RentPassport™ that validates their profile and then provides renters with an instant insurance quote to cover their deposit.

• Instead of paying a traditional cash deposit, renters make a one-off payment for an insurance policy that covers them for the duration of the rental contract. In most cases, that one-off insurance payment is less than a tenth of what you would pay for a traditional cash deposit.

• The platform rewards good behaviour through lower policy premiums at renewal.

• For landlords, the fear of unknown renters forces them to take cash deposits to cover any losses. InsureStreet replaces that fear with a trusted renter profile and an insurance policy, backed by HISCOX.

• InsureStreet has also partnered exclusively with Experian to offer renters the option to choose to pay their rent on the app and help improve their credit score.

With nearly two out of five UK households renting their home and home ownership at its lowest level for a quarter of century, this new data-driven approach also has the potential to channel £4bn of dead capital back into the UK economy, as well as free up often badly needed cash for renters. According to the latest figures around the Tenancy Deposit Scheme, right now more than £4bn is tied up in rental deposits schemes, and £1.25bn of that is in London alone.

Tahir Farooqui, founder and CEO of InsureStreet, says: “We believe change comes from within, especially in an industry that has been blighted with mistrust. In championing social mobility, we chose to lead by example and empower our customers to do the same; together we can grow and evolve as positive agents of change. Our goal is to make it easier for good tenants to find nice places to live – especially in large cities where rent is inflated beyond their means.

“And for landlords, because they have access to trusted renter profiles, it takes away the fear and mistrust out of rental transactions,” he adds. “What we are offering is not only a convenient app to set up and access our RentPassport™ service, but also a ‘Rental Hub’ to connect tenants, landlords and agents with each other and relevant services to improve their overall rental experience. The hub is both intuitive and transparent, ensuring open communication channels, so together the industry can evolve products and services that make a positive difference on the communities it serves.

“We will continue to develop a range of on-demand insurance-based services targeted at ‘generation rent’, and as we grow, a percentage of our profits will go to the homeless.”

Martin McBrearty, head of underwriting partnerships at HISCOX, comments: “The launch of InsureStreet is an exciting development for the rental market. Its RentPassport™ will connect tenants with agents or landlords digitally, making the whole rental experience more trusted and flexible. We’re really pleased to be involved.”

The company has secured initial funding from angel investors including Vin Murria, one of the UK’s top women entrepreneurs, along with other angel investors including Charles Burgess, Christopher Raymond McKee, Nick Martin and Catherine Hardiman.

The London-based start-up, which is regulated by the FCA, is selectively piloting with trusted and reputable insurance partners including HISCOX, Experian, Urban Spaces, Get Living, Quintain (Tipi), Essential Living, Atlas Residential, Walten & Allen and Fifty Thousand Homes.

Jonathan Westley, managing director of consumer information services at Experian, says:

“Experian is committed to be able to help millions of renters improve their credit score by having rent payments count in their credit record. We believe the new proposition from InsureStreet doesn’t just make renting more affordable, but that it can give people access to more attractive and affordable credit products in general.

“A strong credit history helps people to access mainstream financial services, including mortgages. In the past, building a good credit rating has been easier for homeowners than for tenants, because mortgage payments are factored in, but via Rental Exchange we want to help level the playing field for renting tenants.”

Jonathon Ivory, managing director of Atlas Residential adds:

“InsureStreet offers a unique and interesting proposition to benefit both investors and customers. For the former, there is some nervousness in respect of arrears and bad debt and the impact on returns, which InsureStreet can insulate against.

“For the later, with Atlas’s priority for customer satisfaction and retention, the consumer no longer has to tie-up such large deposit sums but they can also begin to build a valid credit history that can support downstream home ownership. This makes the InsureStreet offer very compelling and of great interest to our business.”

It is also one of only five insurance start-ups to be chosen as part of the Accenture FinTech Innovation Lab.

About InsureStreet

InsureStreet™ was founded in 2016 by Tahir Farooqui and was born out of personal experience when his younger brother, a millennial, struggled to find the large sum cash deposit typically required by landlords. The company’s mission is to solve this growing deposit crisis for ‘generation rent’.

Its service offers an alternative solution as users are able to access an on-demand insurance platform that generates real-time prices for deposit insurance, and rewards the good behaviour of trustworthy tenants. This removes the headache for landlords.

As the company aims to unlock billions of pounds currently locked away as deposits across the UK, it hopes to redirect that capital back into the economy. http://insurestreet.co

… LandlordZONE.

View Full Article: UK start-up InsureStreet helps solve cash deposit crisis

Consider These Things Before You Increase Your Tenant’s Rent

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1. It could force good tenants to leave.

It might only be a small amount you’ve increased the rent by, but don’t underestimate how this could offend a good tenant who pays rent on time and looks after the property. If you reward good tenants who want to stay and make your property their home for a long period of time, does it really make a difference to get a bit extra each month? And consider carefully if you’re prepared to put your property back on the market if the tenant doesn’t accept the increase…

2. Can the rental market sustain an increase?

Should your tenant decide not to accept the increase they may give you notice to leave. During a periodic term, this will be 1 month. So now you need to prepare your property for market, take photos, book in any repairs and try to arrange viewings with a potentially disgruntled tenant. Along with this, you’ll have your fees for advertising and management percentages to fork out, unless you self-manage. These fees can be reduced if you go it alone or use an online letting agent, like Upad, with prices from £100+ VAT. Once on the market, there’s no telling if it will let for the increased amount. You also need to consider seasonal variations; such as the decline over the Christmas period, and general market conditions i.e. is supply exceeding demand?

3. Can the tenant afford a rent increase?

Let’s say your tenant accepts the rent increase, can they even afford it? Affordability checks at the initial referencing stage were based on the rent price then and their salary at that point in time. As we know from being a landlord’s- things change. There is a chance they may not be able to afford the increased amount. Also consider that they may be earning less than before if they changed jobs. Plus, it’s well documented that wages aren’t increasing at the same rate as rents, particularly in the South East and London.

4. An increase could lead to your tenant falling into arrears.

If your tenant accepts the increase, not wanting to leave the property but also not seriously considering the implications on their finances, it may lead them to fall into arrears. Even a difference of £50 a month could trigger this, particularly if a tenant’s wages aren’t increasing but their monthly outgoings are. It could end up costing you a significant amount if you need to issue court proceedings for possession based on rent arrears. There are currently 62% of landlords dealing with tenant arrears and this is only set to worsen with rents predicted to rise even faster than wages due to the tax changes from 2017.

5. Will you be left with a void period?

If your existing tenant leaves because of the rent increase, you could be left with a void period because there is no guarantee you can quickly find a new tenant. Void periods can be very costly, even a 1 month void means you’re not only missing out on a month’s rent, utility bills and council tax, you will also have to pay the mortgage that month. Many investors rushed to complete purchases before April this year when the increased stamp duty tax rate affecting landlords came into play. This led to an 11.5% increase (up to 50% year on year in some areas) in available properties to let on the market- according to Rightmove. This huge surge in demand means tenants have more choice and the knock on effect could be even longer voids.

6. Do you really need to?

If you’re achieving a good yield then remember this is a long term investment based also on the capital growth of the property. Of course there are expenses for you as a landlord and particularly with the new changes from 2017: profits will be affected. But on balance it might be better to keep hold of a long-term tenant that looks after your investment and pays the rent in full and on time each month.

… LandlordZONE.

View Full Article: Consider These Things Before You Increase Your Tenant’s Rent

Tenant wants new AST in order to claim housing benefit?

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I own a single 2 bed terraced property which has been let to the same working single tenant for just over 3 years. The tenant has unfortunately lost his job recently, and reached out asking if I would give him a new 6 month AST agreement which he claimed he needs in order to claim… Read more

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