Cambridgeshire auction house offers abundance of commercial units

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Heading up the sale is the Springwater Business Park, in Whittlesey, Cambridgeshire. It takes place on Wednesday 8th September at the firm’s Cambridge showrooms. Comprising of five industrial units, occupied by three established tenants, the business park currently has a rent roll of £53,043

When asked, why the predominance of commercial property at this auction?, Ian Kitson, Director at Cheffins replied:

Yes…“this is the most commercial lots that we’ve had for a while. However we wouldn’t really say that this is any sort of reflection of the commercial market, its more that the residential market has been so busy that there are less residential lots coming to auction at the moment. Commercial owners are also looking to capitalise on the strength of the current market, particularly in the industrial sector.”

Out of every economic crisis comes opportunity. Given the outlook for global and regional estate markets, there are more opportunities developing that on an attractive risk-adjusted basis will be coming to market over the next 12 months or so.

Kelly Whitman, Executive Director, PGIM Real Estate says that:

“With the right approach to asset management, necessity-driven retail sites, such as neighbourhood centres, can be adapted to benefit from online spending…”

There are several key factors supporting the outlook and more opportunities, barring another set-back with mutant viruses, as Covid wanes in the population. The vaccine rollout is taking effect, and going forward the UK economy is set to benefit from several tailwinds as we go into 2022.

Re-opening this autumn has already given the UK economy a major boost, with spending from accumulated savings giving further fiscal stimulus. Shortages are an inevitable consequence when supply outstrips demand, with an inflationary environment as a spin-off, but this lends support to assets prices.

Commercial property tenant demand appears to have turned a corner, supported by these improving economic conditions and a strengthening labour market, albeit with severe labour shortages in some areas and a continuing skills gap in the UK.

The central banks remain committed to a supporting monetary policy and the motivation for them to keep interest rates low would point towards further yield compression – increased asset prices.

There is no doubting that parts of the retail and office markets are facing structural headwinds, so investors are increasingly turning to niche sectors as a source of resilient income-driven performance. Traditional large-scale offices are going to need substantial investment to not only meet future climate change adjustments, they will also need to be post pandemic compliant as well.

As we emerge from the pandemic, or at least learn to live with Covid, companies are beginning to solidify their strategies, one of which is to go local; to develop a hub and spoke system where smaller office units in strategic locations, staffed by smaller teams, support a central hub.

A major beneficiary of the pandemic has been the industrial sector and logistics hubs, and with online spending on a continuing upward trend, that’s not going to go away soon. There are opportunities to be had in this sector with careful selection.

Auction lots at Cheffins

The are some interesting investments coming up at the auction, many of them with appeal to small-scale commercial property investors.

– The steel frame units on the business park total over 12,000 sqft, currently occupied by EDF EN Services UK Ltd, Trade Van Sales Ltd and Stadler UK Ltd. The Park has an estimate of £675,000 – £700,000.

– A modern semi-detached two storey office/workshop building on Ermine Business Park in Huntingdon. With on-site parking, the premises feature a series of office spaces, totalling over 1,966 sqft, located one mile from Huntingdon town centre and the A1 and A14 trunk roads. The property has an estimate of £195,000 – £210,000.

– In Ipswich, there is a four-storey commercial investment property, which has been recently refurbished and comprises a retail unit, storage area in the basement, a store/workshop and an additional two further storerooms, totalling over 1,679 sqft. Located on Carr Street, the property is in the pedestrianised part of the town centre with nearby occupiers including Santander, Costa Coffee and Specsavers. The building benefits from a recently signed 10-year lease, with a current rent of £15,000 per annum, and it has an estimate of £175,000 – £200,000.

– For anyone looking for a mixed-use investment, a prime shop in Braintree, with planning permission in place for two residential flats is on offer with an estimate of £295,000. Set in the town centre on Bank Street, the property is offered with vacant possession, having previously been let to Edinburgh Woollen Mill.

– On Newmarket High Street is a former banking hall with permission to convert to retail with flats above. The building has the ability to be converted to a large retail unit, with basement storage and either one or two residential flats above. It has an estimate of £325,000.

Ian Kitson, Director, Cheffins says:

“We have seen that demand for commercial investment opportunities has increased over the past 12 months as investors look to diversify income streams. Industrial buildings such as those available at Springwater Park continue to be some of the most sought-after as the sector sees vast levels of demand and strong yields.

“Similarly, mixed-use buildings are being actively sought by both smaller corporate and private investors, or career landlords who look to spread their bets across both the residential and commercial sectors. Values are increasing for small scale investment options, and we have seen that many buyers have turned to the auction room to pick up commercial opportunities at competitive prices as confidence in the market continues to grow following the Covid-19 pandemic.”

Residential properties:

In the residential section, there is a renovation opportunity in the form of a four-bedroom bungalow on Barkway Road in Royston, which has an estimate of £350,000, and there are two substantial barns in Hempstead, near Saffron Walden, with an estimate of £60,000 – £75,000.

Land investments

In the land section there is 17.8 acres of grass and amenity woodland at Creeting St Mary, near Ipswich. The land is intersected by a river and provides an opportunity for amenity use, and is sure to appeal to nature-lovers and those seeking woodland parcels. This has an estimate of £110,000 – £120,000.

Ian Kitson says:

“Renovation projects are continually of interest for auction buyers and the house in Huntingdon is a fantastic prospect for someone looking to purchase a historic property and preserve it for future generations. The land at Creeting St Mary is also set to be popular as a rare opportunity for those looking for amenity or woodland parcels.”

The auction will take place on Wednesday 8th December, from 2pm, online at https://www.cheffins.co.uk/property-auctions.htm

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REVEALED: Details of how landlords will be fined for late MTD tax forms

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Landlords who watched a webinar hosted by LandlordZONE and its tax partner APARI this week were given a rare insider’s guide to

HMRC’s Make Tax Digital (MTD) initiative, which is due to become mandatory in April 2024.

This included how the quarterly digital submission regime will work and how landlords will be fined if they are late filing their self-assessment paperwork.

The online-only event was chaired by TV star Paul Shamplina (pictured) and attended by three HMRC insiders; Mel Hume, Ian Hutchinson and Jim Rogers all of whom have been involved in the five-year-long design and build of MTD.

On hand to give advice on was Anish Mehta, Managing Partner of HMRC-recognised software platform APARI which landlords can use to prepare and submit their self-assessment tax returns digitally.

The HMRC spokespeople were keen to explain the changes that landlords will face after April 2024 and reveal some of the detail as well as answer questions fielded by some of the hundreds of landlords who were watching.

Landlord tax

“Whenever we do a webinar or other event about landlord tax it’s always one of the most popular – landlords can struggle with the challenges of self-assessment and in less than two years they’ll be new rules and procedures to deal with,” said Shamplina.

On fines, HMRC’s Jim Rogers revealed that it would be based on a points system and that landlords would only be fined if they missed all of the four quarterly submission deadlines each year.

Also, landlords will be given a month after each quarter has finished to use software to submit their paperwork.

“We realised that the first quarterly deadline would be the hardest to meet,” said Rogers.

Confirmation messages

Other nuggets revealed during the webinar included how confirmation of meeting their tax obligations will be given to landlords through software providers like APARI, not direct from HMRC.

And landlords will have to start keeping all their income and expenses in a digital form and submit this information quarterly in addition to a final end-of-year ‘Final Declaration’.

Also, it was revealed that for jointly-owned properties, each person will have to judge whether they must do MTD and if they do, APARI enables a couple to capture the income and expenses once but use it to submit two tax returns separately.

HMRC says MTD is for landlords who earn income from renting out properties of more than £10,000 a year and, although MTD becomes mandatory in April 2024, they are urging landlords to start getting used to the changes now.

They are running a pilot with APARI to get feedback and make sure that the system caters for landlords properly when it becomes mandatory.

Watch the webinar for free here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – REVEALED: Details of how landlords will be fined for late MTD tax forms | LandlordZONE.

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CONFIRMED: Treasury rejects proposals to hike CGT bills for landlords

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Landlords won’t face a hike in Capital Gains Tax (CGT) after the government decided to shelve plans to align it with Income Tax and cut the levy’s annual allowance.

The Office of Tax Simplification (OTS) had suggested the changes, which were dismissed on the Treasury’s second tax and administration day when it set out details of proposed changes and consultations on the tax system.

Lucy Frazer MP (pictured), financial secretary to the Treasury, told the OTS that these reforms would involve a number of wider policy trade-offs.

“Careful thought must be given to the impact that they would have on taxpayers as well as any additional administrative burden on HMRC,” she said, adding: “The government will continue to keep the tax system under constant review to ensure it is simple and efficient.”

CGT is taxed at 10% for basic rate taxpayers and 20% for higher and additional rate taxpayers, or 18% and 28% respectively on residential property, while the first £12,300 of CGT is exempt.

The OTS proposals had suggested bringing it in line with Income Tax, currently charged at a basic rate of 20%, and rising to 40% for higher rate taxpayers.

It also suggested cutting the annual allowance, which could have dragged many more people into the tax net.

Costs revealed

If these changes had been adopted by the government, previous research by lettings and estate agent, Beham and Reeves based on the average capital gain of a buy-to-let investment of £82,798, had shown how it would hit landlords hard.

Selling in the current market would see a lower rate taxpayer pay £12,690 in CGT, while a higher rate taxpayer would pay £19,739.

But if the changes had taken effect, the tax owed would climb to £14,100 for a basic tax rate payer, while those in the higher threshold would see it increase to £28,199, a jump of £8,460.

Despite the respite, tax experts have warned that the rise is still likely in the future.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – CONFIRMED: Treasury rejects proposals to hike CGT bills for landlords | LandlordZONE.

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30% of serious complaints about landlords involve deposits, says claims firm

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Almost a third of the most serious tenant complaints about landlords relate to deposit misuse, according to an online claims management firm.

Veriwise says 30% of cases considered by solicitors acting on its behalf were about ‘deposit abuse’, with 25% of the firm’s clients unsure if, or where, their deposit is protected.

Meanwhile, 21% of initial inquires made to the firm – set up to take on housing disrepair claims for renters – relate to damp and mould.

Veriwise founder Ajay Jagota, who also runs a lettings firm, says he’s been surprised by how many of the most serious complaints it has received about landlords continue to relate to deposits.

Rogue landlords

“The situation could be even worse that it looks – it’s truly alarming how many of the renters who come to us to complain about things like broken central heating, rodent infestations and dangerous electrics are also unable to tell us if and where their deposit is protected,” says Jagota (pictured).

“It stands to reason that the same landlords who don’t care about their legal responsibilities when it comes to living conditions would be equally negligent when it comes to deposits.”

It is 14 years since tenancy deposit protection became mandatory and landlords must register with one of three government-backed insurance-based or custodial deposit protection schemes operated by MyDeposits, Deposit Protection Service (DPS) and the Tenancy Deposit Scheme (TDS).

But it’s not just landlords who don’t protect deposits; it recently transpired that due to an IT error, a number of deposits taken on assured shorthold tenancies by Purplebricks weren’t registered.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – 30% of serious complaints about landlords involve deposits, says claims firm | LandlordZONE.

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ECO3 New gas boiler – just a lot of hot air?

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Another advert push for ECO3 and the installation of both gas lines (up to 23m) and new Worcester boilers. Is it REALLY worth doing given the total uncertainty and lack of direction as to where this is all going???

I have some tenants that may be within 23m of an existing gas line that currently are quite happy with full electric in their homes.

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Scale down a Property Portfolio and release equity the tax smart way

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It’s a fact that more and more landlords over the age of 50 are choosing to sell or scale down their portfolios. either to retire or to change investment strategy to a less ‘hands on’ option, and it’s easy to understand why.

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