New rent guarantee service ‘first to eliminate rent arrears and voids for landlords’

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A letting agent is guaranteeing landlords that it can pay out their total rent every month, regardless of void periods and late payments.

London and overseas firm Holland Properties’ new service – Holland Assurance – aims to guarantee a consistent income for investors, even if their tenants miss a payment.

Tenants don’t pay the company up front, but as per a normal letting agreement, it explains. For landlords, there’s no need to wait for tenants to pay, as they receive their income regardless of when payment was made, even when tenants are in arrears.

All property breakdowns get combined into one single statement, once a month, on a chosen day. 

The company also guarantees an increase on the rent for the first year based on a landlord’s current rent, while paying out even if the property is empty, depending on the property, area and current rent.

Financial problems

“Landlords can be assured that in case of any financial problems, their rent is protected by tenant referencing,” according to MD Sheldon Cole, who believes that his is the first property firm offering this kind of guarantee.

“It is a bold and dynamic move that pushes boundaries, but we are confident we can deliver,” he says.

“Our total transparency, openness, and honesty, alongside our service standards has always set us apart from our competition and now we can offer an assurance to our clients as well to make their lives easier.”

Holland Properties adds that the launch comes at a time of scrutiny for usual rental guarantee services, which can see agencies sometimes charge tenants an extra fee that the investor doesn’t see. 

Read more about rent guarantee products.

View Full Article: New rent guarantee service ‘first to eliminate rent arrears and voids for landlords’

Payments on Account: What you need to know

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It’s time to make your next tax payment – Don’t miss the deadline!

It seems like summer is finally here – time for barbeques, picnics, beer gardens – and your next Payment on Account!

31st July 2022 stands as the deadline for taxpayers to pay their second payment on account towards their 22/23 tax bill – some of you may have already received letters about it from HMRC.

What is a payment on account?

The Payment on account system was brought in by the revenue as a way of receiving tax payments from tax payers in advance of their tax return submission and the tax year ending.

It is calculated using the previous year’s tax liability as the estimate for the next year. When you submit your tax return for the last tax year, you are also required to pay 50% of that liability towards the current tax year’s liability. Then come July 31st, you are required to pay another 50% – so by the January deadline, you just need to pay the difference between the payments already made, and the actual liability.

If we take the following as an example:

Tax year 2019/20 was your first year trading.

31 January 2021 – Tax liability for 19/20 is due PLUS Payment on Account 1 (50% of the 19/20 liability, towards the 20/21 liability)

5th April 2021 – End of 20/21 tax year liability is calculated

31st July 2021 – Payment on Account 2 is due (remaining 50% of the 19/20 tax liability)

 31st January 2022 – Balance of 20/21 tax liability is due PLUS Payment on account 1 for the 21/22 tax year.

It sounds pretty complicated, and to be honest it’s not the easiest system to get your head around! So to help you we have added a section on paying your self assessment tax bill to our Ultimate Guide to Self-Assessment Tax Returns. We have even included an easy to follow “how to” video!

Do I have to make payments on account?

This depends on your liability, and other circumstances. If you have a total liability of less than £1000 (not including tax deducted at source, such as PAYE) then you do not need to make payments on account.

If you know that your liability is going to be lower than the previous year then you can request a reduction in your payment on account from HMRC.

How can this system help me?

Although the tax return isnt due to be submitted and balance paid until 31st January, using the 31st July Payment on account date as an aim for submitting your tax return could be a huge benefit.

If you calculate your tax return in July/August – then you will know the balancing payment and next year’s liability 6 months before you are due to pay. This could be a valuable time to sort cash flow, or request reductions in your payment on account, if needed. It can also give you time to make any tax planning decisions for the current tax year. 

Thousands of taxpayers are already starting to submit their 21/22 tax return – but it doesn’t have to be a complicated process – you can calculate your tax liability for FREE using  APARI Simple Self Assessment.

View Full Article: Payments on Account: What you need to know

LATEST: Portfolio landlords to buy more properties as rental demand soars – claim

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Nearly half of landlords with multiple properties plan to expand their portfolio in the next year, bucking the trend of those reportedly looking to sell up.

New research from Handelsbanken reveals that 49% of professional landlords – those owning at least four properties – intend to buy more, while 8% plan to invest in improving the quality of their portfolio.

Despite fears of an economic downturn and the cost of living crisis, only 7% of landlords expect to sell some or all their portfolio, while a third (35%) are keeping their current properties for the next 12 months.

Handelsbanken’s poll of 120 professional landlords finds that many hope to diversify their assets across different sectors and regions, with London seen as the most attractive place to invest (chosen by 53%), followed by the East of England (40%) and the East Midlands (22%).

When it comes to the type of property they have their sights set on, houses come out top (66%), followed by flats (38%), HMOs (34%) and commercial retail (32%). The survey also found that 86% of landlords expect a rise in demand for residential property, with nearly two-thirds (63%) confident that commercial property demand will also increase.

Buoyant

James Sproule (pictured), UK chief economist at Handelsbanken, says: “Landlords are anticipating that a shortage of rental properties will help keep prices buoyant, particularly as working patterns continue to adjust to the post-pandemic world and people seek to move back to big cities, particularly in popular areas such as London, which is also seen to be better placed to ride out the next series of economic challenges and opportunities.

“Landlords went through a tough period following the COVID-19 pandemic, with residential property transactions falling by more than half and business investment contracting. But the sector has survived and is now looking forward.”

View Full Article: LATEST: Portfolio landlords to buy more properties as rental demand soars – claim

Bank of England Governor prepares us for possibility of 0.5% base rate increase

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Andrew Bailey, Bank of England Governor, gave a speech yesterday at the Mansion House Financial and Professional Services Dinner. Although he did not and could not give an indication of what the Monetary Policy Committee’s decision would be for the next Bank Base Rate vote on the 4th of August

View Full Article: Bank of England Governor prepares us for possibility of 0.5% base rate increase

New podcast from LRG, hosted by radio legend, Ian Collins, discusses what landlords are likely to get caught out on

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Radio host Ian Collins spoke to Michael Cook, Group Managing Director and Mark Giacomin, Policy & Guidance Manager at Leaders Romans Group, and independent property expert, Kate Faulkner, about the tough job landlords have of staying up to date with lettings legislation.

The podcast started with a discussion on why it’s so tough for landlords to keep up with lettings legislation. Michael explained that with around 168 laws covering over 400 individual rules and regulations – with many new ones added each year and existing ones changed – it’s a tough ask for landlords to keep track, especially if they have a full-time job that’s not in the property market.

Michael shared that he’d done a test of his own, first self-managing a property to let, then outsourcing it to an agent. Although he had to pay for the agent’s service, the costs were tax deductible and it wasn’t just the fact that the legislation was taken care of, he was also surprised how much time it saved him. In addition, he’d struggled to increase the rent while he was self-managing, as he’d got on so well with the tenant and didn’t want to cause any problems!

Kate explained that while keeping up with ever complicated legislation across different countries and local authorities in England is tough for landlords, there’s also the threat of increasingly severe penalties if they fall foul of the law.

Local Authorities can fine landlords up to £30,000 without having to go to court and they can dish out these penalties for even accidental admin errors, such as not licensing a House in Multiple Occupation, not giving tenants the correct ‘prescribed information’ at the start of their tenancy or, as Michael pointed out, not protecting deposits properly, which can result in landlords having to return more than three times the deposit amount to the tenant. For the most serious legal breaches, landlords can be issued with a banning order preventing them from letting property and even sent to jail.

The panel agreed that to be successful at buy-to-let, landlords had to find a reliable way to stay on top of the legislation – or outsource the responsibility to a qualified letting agent that’s a member of ARLA Propertymark or RICS. They added that continuing to invest in maintaining and upgrading your buy-to-let is essential if you want it to keep delivering the best returns.

Both Michael and Mark highlighted that one of the key mistakes landlords make is not keeping rents in line with the market. Over time, the rental income is eroded by inflation, reducing its real value and making it hard to keep affording property repairs and renovations. Consistently raising rents a little every year helps ensure your buy-to-let continues to deliver enough income to cover all ongoing costs, plus extra to keep the property in top-notch condition so it appeals to the highest paying tenants.

And this is where they feel the job of a good letting agent comes in. Not only can agents help you find the best buy-to-let for the local area that will achieve your investment objectives, but they know how to keep it legally and safely let and understand the importance of having the means to upgrade the property to retain or improve its value over time.

Listen to episode 1 of The Property Crowd here.

View Full Article: New podcast from LRG, hosted by radio legend, Ian Collins, discusses what landlords are likely to get caught out on