Welcome Landlords – Have 0% for three months!

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The Leads building society is offering a welcome start of 0% for Buy to Let purchasers on their new range of ‘Easy Start’ products.

Welcome is designed to allow BTL customers breathing space when their finances are most stretched after the initial cost of purchase.

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A Budget for the sunny uplands of a post-Brexit Britain?

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Budget 2018: 

Budget predictions from accountants, business and financial advisers Kreston Reeves for next Monday’s Budget.

Chancellor Philip Hammond will deliver on Monday 29 October the most keenly watched and important Budget of his career.  It will be a Budget delivered through the lens of Brexit and will, says accountants, business and financial advisers Kreston Reeves, set out the Government’s vision for what the UK might look like once we have left the European Union.

Laurence Parry, Tax Partner at Kreston Reeves said: “With 29 March drawing closer we would expect the Chancellor to deliver an upbeat Budget that gives a flavour of how the UK will look post-March 2019 and one that sends a message to the country of the Government’s future intent.�

Whilst big policy announcements might be missing, Kreston Reeves tax partners, Laurence Parry and Daniel Grainge anticipate the following.

The introduction of a digital tax
“The corporation tax payed by some of the world’s largest digital companies has once again hit headlines with Ed Sheeran earlier this month reportedly paying more tax in the UK than Amazon and Starbucks,� says Laurence.

“The Government is under increasing pressure to act, and we expect the Chancellor will announce a consultation on a new digital tax whether based on turnover from UK customers or some other measure.  We don’t expect a blunt transaction tax.�

Buy to let
Daniel Grainge, a partner specialising in private client tax says: “A further move to make houses more affordable for owner-occupiers was raised at the Conservative party conference earlier this month with the potential for landlords to be offered capital gains tax reliefs if they sell to tenants.  We expect to see more detail in the Budget.

“This is potentially an attractive position for property investors looking to realise the value of their investment.  The Chancellor would hope that this measure might increase supply and so reduce prices; however, it is difficult to see how this will significantly ease our housing crisis.�

Agricultural Property Relief and Business Property Relief
“Agricultural Property Relief (APR) has long been rumoured for reform,� says Daniel.  “It is a valuable relief for farming families, but there is a feeling that the relief should not be used for investors owning land.  Given, however, that many landowners will be Conservative voters we would be surprised if reform were announced on 29 October.

“But we would not be surprised to see reform to Business Property Relief (BPR), with the relief removed from AIM-listed shares.�

Inheritance Tax
“Again, the reform of inheritance tax has long been promised by the Conservative party but not actioned,� says Daniel.  “It is difficult to see any meaningful change being announced this time around, but we would not be surprised if the rules surrounding gifts were eased.�

What would we like to see?
“There is one reform we and many employers would welcome,� says Laurence, “and that is the harmonisation of national insurance and income tax.  The two are increasingly blurred.  Combining the two would save employers, their advisers and the Treasury considerable time and money.

“But, just as Heathrow’s third runway and HS2 are proving challenging, we think this might be a step too far for a government consumed by Brexit.�

About Kreston Reeves:
Kreston Reeves advises dynamic organisations, private individuals and families on their business, tax and wealth needs. We help them make confident decisions about the future. We have offices in London, Kent and Sussex and employ over 550 people including more than 50 partners.

Offices in: London, Kent and Sussex

Website: www.krestonreeves.com

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – A Budget for the sunny uplands of a post-Brexit Britain? | LandlordZONE.

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Refusal to award fixed costs and contractual costs

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I have been in court again! The case was heard in Canterbury County Court yesterday, Wilson v Manser and Manser, which went in the landlord’s favour. The Judgement itself is not of particular interest, but the refusal of Deputy District Judge Eyley to award fixed costs and contractual costs is of considerable importance to the Letting Industry.

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Minor ACM Cladding = unmortgageable

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My niece has been trying to buy a flat in Hackney Wick, a relatively new development next to the Olympic Park. One flat was rejected by all lenders as it had ACM cladding in the block – not on the flat she wanted to buy but on the attached 5 storey block.

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The ups and downs of the rental property market

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The Rental Market:

The commercial landlord with investments on Britain’s high streets, retails shops and in some cases offices, have seen the threat of the relentless growth of internet shopping. But home delivery and urban living have at the same time created a boom and driven-up the demand for warehouses.

One company that’s benefited greatly from this seemingly on-going structural change is FTSE 100 quoted real estate investment trust, Segro (LSE: SGRO). Its share price has doubled over the last five years, quite a contrast when you look at the stock price performances recently of retail agents like Countrywide and Foxtons.

Segro says it has 891,000 square metres of property approved or under construction, and this year it has signed new rental contracts worth some £52 million. That’s a 48 per cent increase on its reported figure of £36.4 million for the same period in 2017.

Quite how long this boom in warehousing will last is hard to forecast, and there’s always Brexit entering into the equation. However, with land in short supply, and internet delivery forecast to continue its rapid growth, there’s no reason to suppose this story does not have longer to run.

Another property company that’s done well in the letting market is student housing specialist, Unite Group PLC (LSE:UTG). One of the biggest operators in this sector, the FTSE 250 Company has also seen its share price double over the last five years.

The latest report from the company claims that it has let out 98 per cent of its available accommodation to students in the current academic year, and it has managed to achieve a rental growth this year of around 3 to 3.5 per cent.

The group recently had a change of focus: selling off some of its units in the smaller university towns, to concentrate on what it calls the “high and mid-ranked universities�. Here it thinks demand should be the most stable for the future.

Continuing high student demand for university places obviously poses a risk for a company like Unite, as it does for ubiquitous small-scale student landlord. But Unite’s emphasis on the top level “Russell Group� schools, and that fact that something like 60 per cent of its 50,000 rooms are let on long-term agreements with the universities themselves, gives it long-term stability.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The ups and downs of the rental property market | LandlordZONE.

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