Replacement windows in a leasehold flat?

admin    Uncategorized     agents

Hello, The old uPVC windows in the leasehold flat I rent out need replacing but I am not clear if this is the responsibility of the Lessor or Lessee.
If it is my responsibility do I need the permission of the freeholder &

View Full Article: Replacement windows in a leasehold flat?

Pay it off, half or not?

admin    Uncategorized     agents

I have a £100k interest-only mortgage outstanding on a tenanted property with a value of £150K. I have the money to repay the mortgage outright – it expires in 14 days. Should I repay it all? Repay half? or remortgage the entire amount with TMW @ min 3.5% + arrangement fees?

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Short term let business rates?

admin    Uncategorized     agents

Hello, I have recently switched a 1 bed property that I rented out long term rental into a short term rental. Early next year I will have to apply to pay business rates instead of council tax (which my previous tenant used to pay direct to the council).

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Surge in landlords chasing higher yields outside London, says big agency

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The search for higher yields to cover rising costs led to nearly two-thirds (62%) of London-based investors buying property in the regions this year, up from 26% a decade ago.

Hamptons’ research reveals that landlords made up a record 21% of Londoners choosing to buy in the regions, up from 16% in 2021 and 9% a decade ago.

But the overall share of those buying property outside the capital slowed in 2022, back towards pre-Covid norms; Londoners bought 7.3% of homes, down from a 14-year high of 7.8% in 2021. Driven by rising prices, first-time buyers made up a record 28% of these buyers.

Strong house price growth has also meant that buyers had to look further afield to find the space they need. 

The average was 34 miles away, one mile further than last year which itself was a record, although BTL investors bought properties the furthest away, at an average of 109 miles, a figure which has doubled since 2013. 

Midlands or North

Hamptons says 54% of London-based investors bought a buy-to-let in the Midlands or North, up from 20% a decade ago.

Several of the local authorities that have seen the biggest increase in the proportion of prospective buyers coming from London are outside traditional commuter belt hotspots.

In 2019, just 1% of applicants registering to buy in Wiltshire came from London but by this year, 16% of prospective buyers were looking to relocate from the capital.

Aneisha Beveridge, Hamptons’ head of research, says it expects the pace of London outmigration to cool further next year as pent-up demand from the Covid-related trend wanes. 

She adds: “But affordability pressures, and in particular the cost of higher interest rates, may mean that more Londoners are forced to move further afield to buy a home.”

Read more: Landlords face 'double whammy'.

View Full Article: Surge in landlords chasing higher yields outside London, says big agency

Landlord launches petition to bring back mortgage interest tax relief for BTL

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A landlord in the Midlands has launched a parliamentary petition calling on the Government to reverse its Section 24 tax changes for landlords, which since 2017 has gradually removed their ability to claim mortgage interest rate against their tax liability.

Announced by George Osborne in 2015, the tax relief was replaced by a basic rate reduction from their income tax liability for their finance costs of 20%.

Simon Foster, who is the petition’s sponsors, says: “We want the Government to reinstate the ability of landlords to set the full amount of mortgage interest against rental income, before tax is calculated.

Sign the petition here.

“Like many self-employed business people I am a small, well-established private landlord that is now struggling to make any money from letting properties.

“Unless the ability to offset mortgage interest against rental income is reinstated I will like many be forced to sell my properties. This could reduce the number of properties available on the private rental market.”

His petition has reached 9,811 signatures so far and will run for six months, but needs to reach 10,000 to prompt a Government response, and 100,000 signatures to force MPs to debate the topic in parliament.

Leading letting agent and former Propertymark President Maxine Fothergill (pictured) is urging both letting agents and landlords to sign the petition to persuade ministers that removing the tax break is both unfair and reducing stock within the PRS.

She says: “With a serious housing shortage, we can’t afford to lose any more rental housing stock and we need the Government to sit up and listen to our sector to stop this daily erosion.”

In the early days of the Truss premiership she told a meeting of landlords that she would consider reinstating the Section 24 tax reliefs and was sympathetic to the cause of landlords – but didn’t last long enough in power to deliver on her promises.

View Full Article: Landlord launches petition to bring back mortgage interest tax relief for BTL

Landlord launches official petition to re-instate mortgage interest tax relief rules

admin    Uncategorized     agents

A landlord in the Midlands has launched a parliamentary petition calling on the Government to reverse its Section 24 tax changes for landlords, which since 2017 has gradually removed their ability to claim mortgage interest rate against their tax liability.

Announced by George Osborne in 2015, the tax relief was replaced by a basic rate reduction from their income tax liability for their finance costs of 20%.

Simon Foster, who is the petition’s sponsors, says: “We want the Government to reinstate the ability of landlords to set the full amount of mortgage interest against rental income, before tax is calculated.

Sign the petition here.

“Like many self-employed business people I am a small, well-established private landlord that is now struggling to make any money from letting properties.

“Unless the ability to offset mortgage interest against rental income is reinstated I will like many be forced to sell my properties. This could reduce the number of properties available on the private rental market.”

His petition has reached 9,811 signatures so far and will run for six months, but needs to reach 10,000 to prompt a Government response, and 100,000 signatures to force MPs to debate the topic in parliament.

Leading letting agent and former Propertymark President Maxine Fothergill (pictured) is urging both letting agents and landlords to sign the petition to persuade ministers that removing the tax break is both unfair and reducing stock within the PRS.

She says: “With a serious housing shortage, we can’t afford to lose any more rental housing stock and we need the Government to sit up and listen to our sector to stop this daily erosion.”

In the early days of the Truss premiership she told a meeting of landlords that she would consider reinstating the Section 24 tax reliefs and was sympathetic to the cause of landlords – but didn’t last long enough in power to deliver on her promises.

View Full Article: Landlord launches official petition to re-instate mortgage interest tax relief rules

Making Tax Digital for landlords is delayed by two years

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The Government has announced that the introduction of its flagship ‘Making Tax Digital’ (MTD) scheme for Income Tax Self Assessment has been shelved for two years

The scheme was a crucial part of the government’s strategy for tax administration and would mean individuals and businesses keeping digital records and using a software program that is compliant with Making Tax Digital.

The post Making Tax Digital for landlords is delayed by two years appeared first on Property118.

View Full Article: Making Tax Digital for landlords is delayed by two years

Commercial units soon to be compulsorily auctioned by local councils

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A Bill covers aspects of local democracy and constitutional arrangements along with many aspects of local town and country planning, plus the imposition of an infrastructure levy.

Section 8 of this Bill is of particular interest to commercial landlords with retail premises, in certain designated areas, where local authorities are to be given powers to re-let vacant high street premises.

Auction powers are to be given to local authorities over vacant high street commercial premises, predominately shops. The Bill is said to underpin the UK Government’s levelling-up agenda and will give local authorities greater direct powers to help regenerate their local areas.

The new auction provisions are aimed at re-invigorating high streets and town centres by enabling local authorities in designated areas to take over from landlords and re-let their vacant commercial premises through rental auctions, regardless of any intentions the landlords may have.

The Bill was first published in May this year and the Levelling Up and Regeneration Bill 2022-2023 is currently being debated in the House of Commons (3^rd reading) before it is passed to the House of Lords.

If passed, the Bill will under its Section 8 grants new powers to local authorities to hold compulsory auctions of long-term vacant high street premises in nominated high streets and town centres in England.

What are designated areas?

A local authority will be empowered to designate a street or an area as being important to the local economy if there’s a concentration of high street uses. There’s a wide range of high street uses as defined in the Bill including shops, offices, restaurants and even light industrial premises, but excluding warehouses.

Once an area has been designated, any long-term vacancy of a unit will be vulnerable to local authority control, that’s if the unit has been vacant and the landlord has failed to re-let for a certain period of time. The authority can intervene if it considers re-occupation would be beneficial to the public good, to the local economy, society or environment.

How are vacancies defined in the Bill?

A commercial premise is defined as vacant if it has been unoccupied for one year or, at least 366 days in the last two years. Occupation is defined as: “the regular presence of people at the premises” but as the definition stands questions remain as to how this will be interpreted into a practical everyday test?

Would temporary storage be an accepted use?, what about pop-up shop used under temporary licences? It seems at first sight there could be many loop-holes with this.

To what properties would rental auction powers apply?

The auction powers will only apply to ‘qualifying properties’, being those situated in an area designated by the local authority as a ‘high street’ or ‘town centre’ (in accordance with requirements contained in the Bill) and which meet the following criteria:

1 – Suitable for high-street use – the local authority must consider that the property is suitable for a ‘high-street use’. This categorisation will include shops, offices, restaurants and public entertainment spaces. In their process of assessing suitability, local authorities must have regard to any works or fit-outs that a landlord would be required to carry out or an ingoing tenant would do to prepare a unit prior to occupation.

2 – Vacancy condition – the property must have been continuously vacant for more than one year or for 366 days in a two year period.

3 – Local benefit condition – the local authority must consider that occupation of the property for a suitable high street use would be for the public good, beneficial to the local economy, society or environment.

How are the premises identified?

It doesn’t take much thought to realise that problems might arise with split and mixed use premises. Shop premises often have upper parts used as offices or residential accommodation. It would seem that local authorities will be allowed to specify a part of the building to be rental auctioned, for example a ground floor street facing retail unit with accommodation above could be divided and only the ground floor rental auctioned.

How does a rental auction procedure work?

There is a two stage process that a local authority must go through to notify a landlord that it intends to proceed to a rental auction with a qualifying property. The landlord will have a right of appeal. This will be during the second stage notice period, including where the landlord intends to occupy the property itself, or to carry out substantial renovation works or to redevelop the property.

The government will publish further regulations and guidance on how such an auction would proceed in practice. Currently, no guidance has been given as to how a bidder may be deemed to be successful.

What will be the terms of a tenancy?

It is proposed that a rental bidder deemed successful will negotiate with the local authority, the specific letting terms in an agreement for a lease, this ‘having regard’ to the landlord’s representations, before powers requiring the landlord to grant the lease on those terms.

The local authority would have the power to require a landlord to carry out works before the start of a tenancy, The Bill will set out certain terms to be included in a tenancy, but details of these will be left to be covered by additional regulations.

For example, mandatory terms would include include:

1 – the tenancy term for a minimum of one year to a maximum of five years

2 – repairing obligations will fall on the tenant, to repair and insure the property

3 – definition of circumstances in which the tenant may (or may not) dispose of its interest

4 – Provisions will be made out for when a landlord may forfeit or terminate the lease

5 – there will be a requirement for the tenant to hand back the property with vacant possession at the end of the term.

6 – The tenancy will be excluded from security of tenure under the Landlord and Tenant Act 1954 Part2, and consent to the tenancy will be deemed to have been granted by mortgagees and superior landlords.

7 – The Bill considers the use of a model lease agreement for these compulsory lettings and guidance will be issued for a co-operative process between local authorities, landlords and tenants

The Levelling up and Regeneration Bill Bill introduces a new concept in local authority control, effectively taking new compulsory powers to re-let a landlord’s premises. By accomplishing something a landlord has been unable to do for itself, the theory is that the authority’s actions will promote the regeneration of its high streets and town centres.

The provisions of this Bill will be of concern to landlords who have been unable to find what it deems as suitable tenant in the specified time period. Letting commercial premises, finding suitable tenants, can often take a considerable period of time. Landlords would be concerned about being railroaded into letting to what they deem to be unsuitable tenants and uses.

A further concern would be the possibility, given that many or most existing retail premises are older, and potentially need expensive improvement works necessary to meet energy efficiency requirements, to be imposed on landlords as part of an auction letting process.

View Full Article: Commercial units soon to be compulsorily auctioned by local councils

BREAKING: HMRC completely rejigs and delays MTD scheme for landlords

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Only landlords with property incomes over £30,000 will now need to comply with HMRC’s looming Making Tax Digital (MTD) rules, while those with incomes under £30,000 will not be mandated to use the scheme until a review has been completed.

Even for landlords with larger incomes from property, HMRC says it realises that they face a greater task to comply with the MTD given the ‘challenging economic circumstances’.

Property income

The dates for the introduction of MTD are now different depending on personal or business property income.

From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.

Those with an income of between £30,000 and £50,000 will need to do this from April 2027.

Victoria Atkins (main image), Financial Secretary to the Treasury, says: “It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually.

“It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.

“Smaller businesses in particular should be able to experience the benefits of increased digitalisation of Income Tax in a way which meets their needs. That is why we are also today announcing a review to establish the best way to achieve this.”

Read the ministerial statement in full.

View Full Article: BREAKING: HMRC completely rejigs and delays MTD scheme for landlords

COST RISES: Portfolio landlord says expenses now eat up 32% of his rent

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Analysis by portfolio landlord Open Property Group has revealed that it pays out 32% of its gross rent each month in rental property expenses.

Using Hammock software, the company studied its 140-strong portfolio across England and Wales to establish what percentage of the gross rent it receives as net rent (gross profit) after subtracting typical running expenses but excluding financing costs.

Repairs were revealed as the biggest outlay in November, equating to 11% of the total rental income, while the cost of full-time property managers came a close second at 10%.

General maintenance amounted to 7% and other costs such as gas safety, electrical safety and energy performance certificates totalled 5%.

This means its net rent is 68% of the gross rent, although this does not include mortgage, insurance, licensing and other miscellaneous costs.

Stark reminder

The findings are a stark reminder to landlords that management of a rental portfolio can make up a large chunk of the monthly rental income, eating into profits, and all on top of additional finance and miscellaneous costs, says Open Property Group MD Jason Harris-Cohen (main picture).

“Even if a landlord doesn’t outsource the management, there is still a value they need to put on their time, and these are the kinds of costs they should be scrutinizing when evaluating the health of property portfolios,” he explains.  

“With falling property prices, increased management costs and higher borrowing rates, landlords need to ensure they are conducting a thorough review of their rental portfolio profits to understand which properties are still a viable investment.

“Property remains a solid investment over the long-term, but in the current market and with the ever-changing pressures on regulation, it could make sense to invest in other types of rental properties.”

View Full Article: COST RISES: Portfolio landlord says expenses now eat up 32% of his rent