Newsletters for landlords are issued by the Director of Belvoir Tunbridge Wells when important information becomes available. A selection of key content is available below:
Buy-to-let market in Tunbridge Wells
Overall rents are growing modestly, in line with inflation and wage growth, but tenant demand is strong as more young people join 'Generation Rent'. We have seen a number of Landlords opt to sell in the past few months either to get out of the BTL business or because they need the funds to invest in their own home. Whilst some of these have been sold with tenants in situ others have gone to owner occupiers so we are always looking for new landlords to keep up with demand. At the same time we are seeing existing Landlords expanding their portfolios and investors entering the market for the first time as a result of inheritance, pension funds or business sale. We have people with cash to invest who are still looking for the right property so if you are planning to sell please do give me a call on 01892 615406
Some Tax Implications for Buy to Let
Before April 2017, mortgage interest and other finance costs were generally deductible in full when calculating the taxable profit from a residential letting. This allowance began to be phased out on 6th April 2017 and in the current tax year only 50% of the relevant costs have been deductible in full, with the remaining 50% replaced with a 20% tax credit. Over the next two years the interest deductible will be restricted further so that from 6 April 2020, relief will ultimately only be available at the basic rate of tax. The impact can be significant and landlords may want to consider their options and if they can limit the impact the changes. Alternative ownership structures of re-oganising debt may be appropriate for example Finance Cost Restriction. Since 6 April 2015, non-UK residents have been subject to UK CGT on the disposal of UK residential property and the disposal has to be reported within 30 days of completion If this all sounds a bit confusing then you may wish to seek advice from your accountant or contact Simon Tadman at SRT Tax Consulting who helped us with this article - firstname.lastname@example.org/ 07834 368876
Making Tax Digital
Whilst those VAT registered entities with turnover above £85k will be getting ready for digital filing from April 2019 this will not apply to Landlords with a turnover below £85k until at least 2020 which is a welcome relief.
Many landlords are probably not aware that this has not always been the case but it is now possible to claim 45p per mile for all journeys related to managing your property
Legal Update: Minimum energy efficiency standards (MEES) and Gas Safety
From 1st April 2018 it became unlawful to grant a new tenancy agreement (including renewals) with an EPC rating below an 'E' From 1st April 2020 this will extend to all privately rented properties including those with existing tenants. If you are concerned about your property please do contact us for advice or to arrange for a MEES compliance review of your existing EPC. There is some good news on Landlords Gas Safety Certificates which can now be operated MOT style whereby when a certificate is produced up to 2 months ahead of the annual renewal date it will not expire until the anniversary of the renewal date (provide the last two have been done on time).
Thanks for choosing Belvoir Tunbridge Wells!
We know that you have a choice about who lets and manages your property and we appreciate you choosing Belvoir! in Tunbridge Wells.
Since I bought the business in August we have been busy streamlining our processes and updating our professional standards. We have moved to a new cloud-based system for managing and marketing our properties and we have started using an app for completing property inspections. All of this means we are more efficient and therefore can spend more time supporting our landlords.
The office is in the process of becoming accredited by the Association of Residential Letting Agents (ARLA) and the team are completing their training.
We have recently signed a lease for new premises opposite the train station and will let you know when we have a definite move date. The office will have a fresh new look so I hope you will pop and see us if you are in the area.
I would be delighted to speak to you about your plans for your property and to hear your feedback on how we are doing. I plan to run seminars about some of the issues that are concerning landlords so watch this space for details and please let me know what would be interesting to you.
We also do Sales!
The office has been undertaking sales since 2014 and we will be expanding that side of the business during 2018. In October we completed on a sale in just 17 days from offer to move-in as a result of a great team effort working alongside Thomson Snell & Passmore in the town. Sadly I can't promise they will all be that quick despite our best efforts!
I would encourage you to click and read this really useful article covering whats on the horizon for residential landlords: Landlord Tips from Belvoir
Concerned about getting paid?
Many of you have have taken up the Rent and Legal Cover that we are able to offer on Managed Properties. Whilst we undertake comprehensive referencing and hope you never have to use it, this product does give peace of mind knowing you will always get paid even if the tenants circumstances change and any costs of eviction will also be covered. We will be offering this on all new managed tenancies going forward.
What's happening in the rental market in Tunbridge Wells?
According to the Belvoir Rental Index, average rents across the South East region are flat at aound £1,030 pcm. This
accords with what we are seeing here at Belvoir Tunbridge Wells where average rents are steady at around £920 pcm.
As referencing criteria mean that applicants need to earn at least 2.5 times the annual rent, rental prices are closely linked to wages. Whilst wages are stagnant or only increasing in line with inflation rents will remain flat.
August has been all about 1 bedroom flats which tend to have the highest turnover of tenants and these are renting at between £700 and £800 pcm on average. August has seen more new tenant enquiries than July and we have taken offers on every property we listed.
That fact that the millenial generation do not like making phone calls is reflected in our enquiries where more than 60% are now received via email rather than phone! In addition, our presence on Google has soared in the last year and well over a thousand searches now land on our business page each month.
We have partnered with SDL Auctions to offer an alternative route to selling your property
An auction offers the option to sell your property quickly and with certainty. An online auction will typically run for 21 days and the buyer pays a reservation fee to secure the property so you know they are committed. The buyer is then granted 28 days to exchange contracts and a further 28 days to complete so the end to end transaction is much quicker than a traditional private treaty. By setting a lower guide price you can encourage competitive bidding to ensure you achieve the best price and bysetting a reserve you know the property cannot be sold for less than your minimum price. Belvoir will handle all viewings.
Ensure you are adequately Insured
Buildings and Contents Insurance
I am sure all of your properties are protected by buildings insurance but is it a specialist landlord policy and does it include your contents, for example carpets? Our partner, Let Alliance can offer a Landlord Buildings & Contents insurance policy with a number of featues that are aligned to the rental sector including:
-Legal liability cover up to £5m
-'Malicious and accidental damage by tenant' option
-Up to 20% loss of rent
-Up to 90 days unoccupancy
-Nil excess home emergency cover option (unlimited claims)
-Multiple property quotes and discounts
-Employed, self-emploted, retired, student, local authority
tenants all covered
Rent and Legal Cover
Whilst we undertake comprehensive referencing on all prospective tenants, circumstances can change and our Rent and Legal cover provides complete peace of mind. For £240 pa (inc VAT) for any property with a rental value of up to £2,500 pcm this product covers all unpaid rent and legal costs if eviction is required. Quotes for higher value rents can be provided.
Tenant Liability Insurance
We now ask all tenants to take out a small insurance policy that covers accidental damage (up to £2500) to landlord's contents including carpets, sanitaryware and the internal walls. This policy has a nil excess so small items such as a red wine spill canbe dealt with during the tenancy at no cost to either party. And at the end of the tenacy the tenant can claim on their insurance rather than paying out of their deposit, if any deductions relate to accidental damage.
GET SET FOR AUTUMN: MAINTENANCE TIPS
Leaves starting to drop from the trees are your cue to do some Autumn property maintenance. Your property is your investment so think about the following:
1. Gutter clean -clogged gutters can lead to all sorts or problems which an annual clear out can avoid. Leaves in the gutters means water can't run away as designed which can lead to an ice dam as temparatures drop. If you would like us to arrange this for you do let us know.
2. We highly recommend a boiler service when you arrange your annual Gas Safety Certificate. One of our heating engineers remarked that he has noticed Belvoir landlords do generally have a service at the same time and have far fewer problems as a result.
3. In older properties you may also want to check insulation, lagging of external pipes and consider draught exclusion for doors and windows.
Mortgage Reviews : Why NOW is the right time to review how your investment portfolio is financed
There has been a lot of publicity about Buy-to-Let over the last year or so. Focussed mainly on how the tax treatment of rental income is changing and how much tighter lendingcriteria for BTL has become.
The one thing which has not been spoken about much is how competitive the BTL finance has become. Rates are currently lower than they have ever been which makes now the perfect time to reivew your BTL mortgages to see how much you could save on your financing costs.
It is true that BTL market has tightened considerably with lots of new complex assessement criteria, making it much harder to identify who will lend on the most preferential terms. This is why now, more than ever, it is essential to get the very best expert advice.
At Belvoir we have teamed up with Domus Finance who specialise in financing investment property. Domus are offering a free, no obligation meeting to review your portfolio from which they wil be able to indicate what kind of savings you could make.
If you are interested in reviewing your portfolio please contact me, Natalie Boardman, on 01892 615406 and I will arrange for one of the team at Domus Finance to give you a call.
Calculating the return on your buy to let investment
To work out your annual return on investment on a property with a mortgage, subtract your annual mortgage cost from your annual rent & then work out what this is as a % of the deposit you put down.
For simplicity's sake let's work out the sums for a £100,000 property that rents for £500 per month, on which you pay a £25k deposit and spend £2k on buying costs.
So your £75k mortgage at 5% interest £312.50
£500 rent mortgage interest £312.50 £187.5 x 12 £2250
Deposit plus buying costs £27k
Annual return 2250/27000 8.3%
Don't forget tax, maintenance and other landlord expenses will be deducted from that return. Source : www.thisismoney.co.uk
5 EASY STEPS TO SWITCH TO BELVOIR
Recently a number of Landlords have approached us asking how they can change their management to Belvoir Tunbridge Wells. We can do most of the work for you and take out any of the hassle. Below is a step by step guide that will make the process that little bit easier.
Find out how much notice you are required to give your current agent
This is likely to be one or two months and should be shown in the Terms of Business you signed. If you cannot find it, simply ask them. Once you have this information, give them the required written notice. If your notice ends on a rent due date it will make the process much easier.
You will need contact details for the current tenant which your previous letting agent should provide
We will send you our terms of business to sign
We will contact your tenant and meet them at the property to introduce ourselves
All the tenant needs to do is adjust their standing order. The timing of this switch will depend on when you give notice to your previous agents. We will advise you of the best time to do this.
We will produce a new tenancy agreement for the tenant to sign
We feel more comfortable using our own tenancy agreement as we know the contents and our legal team have ensured it is up-to-date.