Grampa

Well, I guess as the Scottish government appear to be questionably incompetent regarding managing their own finances, they need every Scottish penny they can lay their grubby paws on. But as we know, if it is accepted without too much kicking and screaming from the Scottish landlords something similar will be introduced down here in the land of plenty.

An EPC may not be required if the landlord can demonstrate that any of the following applies: buildings officially protected as part of a designated environment or because of their special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance; – (including a listed building, see page 6 DCLG guidance). Please have in mind listed buildings are NOT always exempt. It is only if certain energy improvements would unacceptably alter their character or appearance. How do you know what works would unacceptably alter the character or appearance if you haven’t obtained an EPC? What does “unacceptably altering” mean? Also, actually doing the EPC does not alter the character or appearance of the property! In our view, therefore, most listed buildings will require an EPC (or at least it’s safest to have one).

It always makes my blood boil when the media report on housing issues such as mould reported or section 21 that have been served on tenants and they are then interviewed by a journalist . The narrative always implies (especially the BBC) that the fault lies solely with the landlord with out asking on air why the tenant was served notice or if the fault/cause of the mould has be established by a professional. I don't disagree that there are some rogue landlords but most landlords will not give notice to a tenant without good reason and certainly not to a tenant who looks after a property, pays the rent on time and doesn't cause any problems. (not counting selling a property). Also in my experience as a agent 90% of all mould reports are caused by the lifestyle of the tenant not a fault with the building ie: insufficient heating, insulations, holes, leaks etc. I know if I was unfortunate to be renting and living a property that suffered with mould whether it was caused by lifestyle or building fault I would be washing it down regularly and not allowing it to build up. Surely that is basic cleanliness?

Its early days yet as the mortgages don't run out until May but that's the next plan to talk to a broker. But the big question is do I wait until closer to May to renew or tie in something earlier about Feb which will then be held until May?

I have just found out that TMW which normally offer some of the most competitive BTL rates have a restriction against also owning the property next door. Which is a bit of a bugger as I have a house converted into 2 flats and own both. Aldermore which is the current (shortly ending) lender new rate is a eye watering 7.9%. Has anyone come across this restriction before? mmmmmm. I wonder if "next door" also means "above"

Welsh housing law is a complete mystery to me. I would hate to be a agent on the border with England managing both properties either side of the border.

https://www.gov.uk/guidance/assured-tenancy-forms#form-6a

I agree. I have seen some agency AST's so out of date they are making reference to Corgi. We update ours 2/3 times a year and have a number of extra clauses added which helps greatly with tenant enquires either during the tenancy or check out such as responsibilities for garden waste, light bulbs/starter units blocked drains to a few. Nothing more satisfying than pointing a stroppy tenant in the direction of a clause in their tenancy.

Dont know if this is of any help regarding CGT If landlords think Section 24 is bad wait until you read this by Mark Alexander - Founder of Property118 As I write this article the Bank of England Governor is under immense pressure to take emergency measures to protect against the collapse of the pound by increasing the Bank of England base rate by a further 1.75% to 4%. The £ is currently trading at $1.07 and is predicted to slump much further unless the UK bank base rate is increased imminently. Whether either of these things will happen in the next few days remains to be seen, but either way money market pundits are now predicting the Bank of England Base rate will need to reach 5.8% in 2023. Interest rates at this level would cripple most landlords, not to mention homeowners who are on variable-rate mortgages. It’s also a ticking time bomb for those on fixed rates. What can landlords do? There is a limit to how much rent people can pay, even with the unprecedented high levels of demand which is set to rise even further as landlords buckle under the pressure to sell up or risk bankruptcy. It is probably fair to say that most landlords who follow economics are deeply concerned and looking into the viability of selling at least some of their properties and using the net proceeds of sale to reduce or pay down their remaining mortgages. But what about Capital Gains Tax? CGT is usually payable on the profit between the sale price minus acquisition and sale costs minus a further £12,300 per person of annual CGT exemption allowance. Here’s a worked example. Mr and Mrs X jointly own 10 identical properties worth £300,000 each. They paid £100,000 each for them some years ago. For every house they sell they will make £200,000 of capital gains. To keep the maths simple, we will assume the cost of redeeming their mortgage combined with their costs of sale are also £100,000 per property, so the net sale proceeds before tax are also £200,000 a property. If Mr & Mrs X sell four houses they will have £800,000 of cash and only £600,000 of mortgages left to repay. However, their capital gains on the sale of the four houses would be £800,000, so they would receive an eye-watering £217,712 CGT bill. In other words, they still wouldn’t have enough money left over to pay off the £600,000 of mortgages on their remaining six properties. Incorporation could be a far better solution When landlords sell their properties to their own Limited Company in exchange for shares the value of the shares created is offset against their Capital Gains. The HMRC manuals describe this process as follows … “TCGA92/S162 applies where a person other than a company transfers a business as a going concern with the whole of its assets (or the whole of its assets other than cash) to a company wholly or partly in exchange for shares. Provided that various conditions are satisfied, the charge to CGT on the whole or part of the gains will be postponed until such time as the person transferring the business disposes of the shares. The way the relief works in practice is that all or part of the gains arising on the disposals of the assets are ‘rolled over’ against the cost of the shares. Relief under TCGA92/S162 is sometimes referred to as ‘incorporation relief’.” So what would this mean for Mr & Mrs X? Following incorporation Mr & Mrs X will not pay any Capital Gains Tax on the sale of any of their properties unless they appreciate even further in value. In other words, the value of the properties at the time of incorporation sets a new base cost value for capital gains calculation purposes. Therefore, if Mr & Mrs X were to sell four of their properties soon after incorporation they would be left with £200,000 of cash after paying off their remaining six mortgages. They would have no CGT to pay whatsoever! For this reason it can make sense to incorporate before selling properties. The entire process can be achieved in less than six weeks, so much quicker than you are likely to be able to sell your properties. Also, depending on your circumstances it may be possible to incorporate without your new company having to pay Stamp Duty or to refinance.

We have never found it necessary to post notices from 2 different post offices offices. Have been doing this for many years either doing the whole process ourselves including going to court or just serving the notices and a specialist eviction company taking on thereafter. NOT once has the method we use been questioned by solicitors or judges or asked if the tenants have actually signed for it. We post x2 copies of the notice both 1st class, x1 with certificate of postage and x1 signed for. The receipts/copies are then supplied as the proof of service with the court application form. However, we do have a 2 stage process now because of all the normal and up-to-date documents that have to be provided to a tenant during a tenancy and could invalidate an eviction hearing if its put in to question weather they received them or not. So 2 days before serving the s21 or s8 we write a letter to the tenant saying please find enclose the replacement and up to date documents relating to your tenancy and post in the same way as above. Gas cert Elecy cert Latest "How to rent guide" EPC Prescribed info relating to the deposit There is no question they haven't received them then and you are good to go with the s21/s8

Having 2 relations who are accountants and do everything from vat, payroll and annual accounts for me is a double edged sword because I have never bothered to get my head around CGT and certain other elements of accounting as I would rather leave it to them and which many of you guys are far more knowledgeable than me. My head is filled with housing law and there is no more space. Which is the reason I rarely contribute to accounting posts.

Nice of you to say so Melboy.😀 We just find it so frustrating fighting to compete with these agents with hidden charges. We are even considering offering a similar deal along side our normal rate even though the admin to manage these extra charges and not forget to bill them as they arise would be a pain.

I have a BOE tracker rate on my home and have had a fantastic low rate for the last 10+ years. So I am in the fortunate position of moving within the next month and will be mortgage free. However, my BTL’s are all on 5 yr fixed. One was renewed with a smallish increase abour 3 months ago which was covered by a rent increase. Another was due Feb 2023 but I but I have just sold that one but have 2 coming up next Aug at the same time (2 flats in converted house). The mortgages are not huge so am thinking I may pay one off fully, renew the other (at a higher rate) and the cost will be about the same. Then hopefully when/if the rates drop I can release the funds put in. A chat with the accountant may be in order first though in case I am missing the obvious.

We all know landlords are being squeezed at the moment with extra costs and interest increases so it’s understandable to want a low-cost option when choosing a Letting Agent. But consider this, you can get a cheap agent or a good agent but rarely can you get them both at the same time. As the industry isn’t regulated sometimes you can make a bad choice and get both a poor agent who is also a more expensive one. But that is down to not putting in the leg work and doing some basic checks and asking relevant questions before signing up. Too many landlords choose an agent solely on monthly % fee alone. What they don’t realise or choose to ignore is all the very well-hidden extra charges which makes a nonsense of their fantastic advertised rate. To give you an example we had a client who wanted us to match another agent that was 20% less on the monthly fee. So, after a quick call to that agent (as a potential landlord) just to clarify the fees I knew that would be included I got my calculator out. Well would you believe it the agent with the fantastic rate was more expensive on a tenancy over a 3 year period and the landlord would have achieved a greater income with us. And if extra visits were required, s21 needed serving, or extra maintenance needed (as a % is charged on top). The drop in income would be a lot more for the landlord with the other agent. So do your number crunching and ask the right questions and dont forget to check reviews on facebook, google yell.

As an agent myself and seeing all the constant changes in law regarding the letting industry I would say it is highly important that any self managing landlord belongs to an Landlord organisation that provides documents. guides, helplline, law updates etc. Most letting agents would belong to one and have access to a number of legal resources. You only need to see all the silly mistakes landlords make posted on the numerous forums and a high % of those mistakes has a monetary cost far exceeding the annual fee to belong to an organisation such as Guild of residential landlords, NRLA ETC. I have no symphty for landlords who think they can do it themselves without even the basic knowledge or dont even try to eduacate themselves to save a couple of quid.

Up the revolution.

Never say never. I think if you are a cash buyer there are going to be some fantastic deals coming to market over the next 12 months. Rents are at a record high as well. There are always winners and losers when the market changes.

Its knowing which tenants on benefits to choose and which one to avoid. Also how to establish if they can afford it and can manage their finances in a responsible manner.

If you are a first time landlord and buying out of the area I would say you need a agent 100% until you find your feet, confidence and knowledge. It would be so easy to buy in the wrong area you need to research, research, research. I am a agent myself and if in your position I would visit at least 3 local agents for a balanced opinion on demand and areas to avoid. When you are in a position to choose an agent you need to research again and don’t choose on fee price alone. Check google and Facebook reviews and always make it clear you want the final choose before a tenant is housed and never be pushed into accepting a tenant you are not happy with. If an agent is only providing a tenant find service they may not be so picky in getting you the best tenant because they get all their fee up front and any future problems will be yours to deal with.

The Government proposes introducing a new ‘Decent Homes Standard’ in the private rented sector in England. A consultation has been announced which sets out the Government’s proposal for the new Standard and seeks views on how they could implement it. The Government apparently is committed to ensuring that all homes in the private rented sector are fit for human habitation. Apparently over a fifth of the 4.4 million households that rent privately endure poor conditions and lack security and control over the homes they pay to live in. The Decent Homes Standard would set a minimum home repair and maintenance level. The Standard would be enforceable by local authorities, who would have the power to impose sanctions on landlords who fail to meet it. The consultation is open to all interested parties and will close on 14 October 2022. I thought the local councils already had the powers to enforce standards within the rental market but I guess they want to beef it up further. https://www.gov.uk/government/consultations/a-decent-homes-standard-in-the-private-rented-sector-consultation

The thing is some people just dont have the ability to manage their finances efficiently. We all probably know someone who is intelligent but jump from one financial crisis to another and are forever in debt due to lack of basic money management. I guess it could come under the banner of common sense and once again we all know some intelligent people who have no common sense or problem solving skills. But back on the subject of rents not being paid due to the current economic situation it never ceases to amaze me how some tenants think it is perfectly ok to prioritise some other expense over their rent payments and just think its ok to state the rent will be late due to some trivial other expense and it doesn't cross their minds that it could put their tenancy at risk and lose goodwill of their landlord. If they at least just asked instead of telling it would be more acceptable.

I also dont provide appliances. However, I do have one flat and the only place to fit the washing machine was in the bathroom boxed in at the end of the bath. The trouble was the bathroom door needs to come off to remove/install so for I brought the cheapest possible washing machine from Currys but also paid the a lifetime insurance policy for it at £3 pcm. This means Currys send out an engineer to fix (including parts)and if it cant be repaired they replace for free though I acknowledge I will have to go and take the door off first. Its been there 8 years so far with only one call out and cost £288 in insurance so far. I'm still trying to work out if it was a good decision or not.

Its the program they use to enter the information into. So I guess if there isnt an option for it, it cant be accounted for. However, I was told the programs algorithms' were updated a few years ago which meant (so i was told by an assessor) that an EPC calculated on the old program would now likely to score higher (better) on the new program.

Well as the original post is over a year old if she hasn't found a tenant yet she certainly is taking her time.

I'm sure it does, as the older the materials the likely hood of a less insulation value. There is a huge number of factors that the algorithms in their computer mash up to come up with a score.