Grampa

7 hours ago, kanrent said:

What system

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.   

1 hour ago, LopicPilof said:

I think you should take your time on this issue, man.

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

3 hours ago, bil8999 said:

I also believe the age of the property and the date when any improvements were completed make a difference to the EPC

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.   

3 hours ago, kanrent said:

The cavity wall insulation was put in when it was built, built according to the building regulations at the time and checked by the building inspector will they still need proof? 

From my experience of assessors they accept evidence in the form of invoices, photos, evidence of seeing the multiple drill holes where insulation has be pumped in to, but generally not, without some form of evidence. Can you get any documentation from the builder, surveyors report or even just remove one brick if that's possible. It maybe worthwhile phoning around a couple of assessors and have a conversation about what you are trying to achieve before called them out and what you need to do as it will vary to vary depending on the assessor. 

These EPC assessors can get audited so they need some record/evidence to prove how they assessed the building but the mockery of it is appliance's do not have to work. So an unscrupulous person could just fix a boiler, room thermostat, off peak meter, Heating Programmer to the wall but not connected and get the points value for it. I've even been told an invoice of a delivery of insulation  to a property would suffice. 

On 8/28/2022 at 6:33 AM, kanrent said:

Hi I have a property  that just makes an EPC of D

If I install solar panels  4kw at a cost of about £5000 with hardly any distribution to the tenant i can get it up to just inside a C.  Just interested  if  anyone here has had solar panels fitted to upgrade  their EPC 

If you are considering this on the basis of a EPC report and the suggestions added within the report I would suggest you do your own assessment of the property first as the reports in my experience dont list all the optional changes you can make to achieve the require rating. 

I would establish how many points you require to reach a C rating which is 69. a D starts at 55 so the most you would need is 14 points and its surprising how easy it can to get these extra points by doing a number of minor/cheapish improvements.

The below point gains are estimates as all houses vary.

LED bulbs 1-3 points

TRV Radiator valves 2-4 points

Draft Excluder on any wooden front/rear doors 1-2 point

Double glazing 5-12 points. Triple glazing can get you a couple more points and can also sometimes be swapped and you keep your current frames.

Loft insulation 7-13 points 300mm thickness gives the max allowance. A top-up to 300mm 1-3 extra points

Condensing Boiler 5-20 points depending on current boiler.

Cavity wall insulation 4-10 points 

This is just some of the ways to squeeze extra points but it also depends on the assessor as 2 assessor can give differant results.

Also the assessor needs access to meter cupboards and if for example he cant see for himself there is a duel tarif off peak meter you wont get the points for it. The same goes for cavity wall insulation they will need to see proof of it and like wise for any flat roof with built in insulation. 

I'm unsure what the latest news on this is but the last i heard it was all connected with the removal of section 21 and that was waiting for a second reading in parliament. 

I get a fox every night I see on my cctv walking across my concrete drive. 

Has anyone had any experience with purchasing and putting a  BTL in a BTL trust mortgage. Also is there an option to combine BTL mortgages into one single mortgage and has anyone done it. I'm sure I read about it sometime time ago and if possible there is bound to be a mechanism within the product to sell and properties and change the amount.

The way rates are going up and tax relief changes etc etc etc it gets the grey matter thinking about possible other ways to finance BTL. 

Like anything there are bound to pro's and con's in any option you choose.

What your best bet on what the mortgage rates will be doing in 2/5 years.

Unfortunately I have a BTL mortgage that needs renewing and 9/12 months ago I could have saved £80/100 pcm with the better 5 yr fixed rates available then but I  was still in a fixed term. Now it looks like  an extra 1% on top of what I'm paying now. 

In hindsight I should have looked into the penalty to surrender 12 months early and renew then. Doh. 

2 hours ago, Carryon Regardless said:

I read an article that says rent inflation is more in the last year than the total of the previous 13, due to a lack of rental properties.

Trouble is I trust the media about as much as politicians.

Rents are certainly shooting up and its easy to get left behind. I choose for most of my personal rentals to be under market rent but do increase them like clockwork every year. I have (touch wood) very little turn over of tenants and many are long term tenants but I do deal with maintenance fairly promptly and don't necessary take the cheapest option when buying appliances/carpets etc.   I have seen a number of my client landlords insist on what I would consider excessively high increases such as £50+ pcm on 700-900pcm properties and do the bare minimum on maintenance. Some tenants have swallowed the cost but then put in numerous maintenance requests or upgrade requests but we have had 3/4 tenants give notice because of "large" increases.   

We're all Doomed, Doomed. 

On 12/9/2021 at 8:48 PM, kerbut said:

I think B&Q have an offer on spades to dig up old posts.

😂

I can see the thought process behind this and potentially is good for both parties because either party can withdraw up until the point of exchange and by then substantial legal and surveyor costs could have been incurred. But as RL stated, ideally the survey and searches should be done first in case any hidden nasties arise.  

5 hours ago, Carryon Regardless said:

You've given me some thought on the dividends.

A Co can take and lose directors at will as I understand. Directors have possibility of taking some dividends free of tax, up to a threshold each year. So if I understand correctly, a co will pay profits on tax in the year it is achieved, it can sit w/o tax consideration after that as co funds.

In later years it might be director/s could enjoy drawing down those funds as dividends. Some research as to if this is then additional to a directors personal income, or a capital gain, seems worth while.

Is this  a legal way to transfer to the kids, for example?

My understanding is by have a property in Ltd Co changing the ownership is simplified and anyone can be made director/shareholder. However, the mortgage company if any may require another guarantor. Owning a property this way may make it easier to transfer than the normal probate procedure if a property is owned in personal names.  

It also appears to be a fairly common practise for owners of Ltd Co to add family members as directors/shareholders to make benefit of their personal tax allowance if its not being used.   The legality of that I'm not going to go into. 

Yes that

1 hour ago, Carryon Regardless said:

Grampa I might have misunderstood your intent.

But the agreement, whatever that is, between yourselves as individuals and the company (the fact you have control of the company is irrelevant in legislation) means that is all in house and can be designed and adjusted as desired (within HMRC parameters).

The result of that is that as individuals 'a' company rents from you. The company pay you a rent for which you will be assessed for tax.

The company is allowed to let on the property to 'another'. That agreement of tenancy is likely to be an AST. All relevant legislation such as deposit protection should be adhered to. The company shall then be assessed for the rental income it receives.

You desire that your taxable profit is low. You desire that the company enjoys the majority of profit and pays a lower percentage tax (than you might) on that profit. I think you have suggested that the company pays a somewhat reduced rent and that is justified by it being a guaranteed rent. And in fact if that meant you happen to run this particular agreement at a personal loss then that would reduce your portfolio profits. To that end you are better being responsible for overheads and ongoing expense's.

Any repossession of an AST tenant is for the company to concern itself with (as it is the companies tenancy), can the company use a S21? Either way it is being removed from England soon enough anyway so may be irrelevant.

Requires your accountant to clarify feasibility.

Are there mortgage issues?

Surely insurance is easy to obtain.

Have I understood your intent anyway?

 

Yes, that is what I was mulling over and feasibility of. However, the profit generated within the Ltd Co (after tax) still needs to be be taken out at some point from the Ltd Co and how that is done also needs some thought because if is classed as personal income it would be declarable therefore defeating the whole excise. Though I acknowledge a certain amount of dividends can be taken tax free.   Or the profits put towards the deposit on the next purchase brought by the Ltd Co. 

3 hours ago, Richlist said:

So let's get into a bit more detail.....

Note: I have no knowledge of how company lets work.

 

A company let is a common law tenancy where a Assured Shorthold Tenancy (AST) cannot be used. In this case because the tenant in the contract between owner and Ltd Co is not an individual but a company. The main advantage is the deposit doesn't need to be protected and i think the notice period is reduced and eviction process slightly different. 

The main down side is you cant use a section 21 but as we all know they are being phased out anyway. 

Well in my limited knowledge of taxation and my back of a fag packet calculation based on a rental currently achieving £700 pcm and running costs of £200 pcm (mortgage S/C, GR agent fees etc)

A high rate tax payer (40%) rents property to Ltd Co (which he also owns) for £200 pcm  which pays the owners overheads but makes no/little profit so no 40% tax liability on the £500 profit he would have received previously.

The Ltd Co now rents the property to a tenant for £700 but has to pay £200 to the owner and therefore makes £500 pcm profit with 19% tax liability (until increase)   

 So very simplified, based on the £500 pcm profit instead of previously paying £200pcm (40%) tax it has been reduced to £95pcm (19%) tax giving a saving of £1260 per year. 

I would guess a bit more thought needs to go into which party pays for any maintenance works to maximise any tax saving.  

It was my accountant that mentioned this as a possible solution (but would need to be looked into further) when I was complaining about a tax bill. 

As my last 2 purchases were via a Ltd Co and my earlier BTL purchases  still in my personal name it does appear on the face of it to be a straightforward fairly easy task to just draw up a company let tenancy from Mr & Mrs Grampa to Grampa Properties Ltd with a guaranteed rental payment of say 25-30% of the normal rent to cover the mortgage payments. Then Grampa Properties Ltd to rent out the property at the market rate and be subject to the lower Limited Co tax rates.

Rent to Rent Guaranteed rental payments are acknowledged to be quite a bit less than the going rent (maybe not as less as I'm hoping to do though) and Rent to Rent isn't an unusual practise either.  

Melboy I take your point but I wont be selling or gifting the property and the Rent to Rent tenancy would likely be 6 months than going periodic. 

Now as we know there are some advantages to owning a BTL in a limited company, tax saving being a big one especially if you are a higher rate tax payer.. The question pops up in the industry on a regular basis on how to transfer a property currently owned in personal name to a Ltd Co but a big hurdle is the stamp duty that would be needed to be paid wiping out any savings.

Well here's a thought and I dont profess to be any tax expert but what if you rent your personal BTL at a greatly reduced rent to your Ltd Co which then is rented out at the normal rent with the Ltd Co as the landlord. Is there a potential tax saving in doing that?

 Other than possible Mortgage Co and Insurance Co restrictions on renting to a Ltd Co (if any) and the extra cost in running Ltd Co what else am I missing? Or is this a silly question.

There are various differences in law regarding wales and England so I can only base my reply on English law. 
When in these type of situations I try to prioritise by order of importance. Getting the property let back rates at the top and if a problematic tenant is involved which potential could go to court and all the cost and time that involves I would accept the date they have given to vacate and account rent owed up to that date. Putting demands on notice periods to a troublesome tenant in my view only increased the risk of the tenant not vacating on the demanded date. After all if the tenant still vacates earlier after been given a later date you are likely to/want to go in to the property earlier to do works which would mean no further rent could be demanded as you have now taken possession yourself. My next priority would be to do a check out and calculate dilapidations and turn the property around and relet asap. Then spend time considering if it is worthwhile chasing for rent damages etc. 

Normally if a freeholder want to sell the freehold he must give all the leaseholders the right of first refusal.(RFR)

However,  for this to apply the building must:

1. Contain at least two flats
2. More than 50% of the flats in the building must be owned by “qualifying tenants”
3. No more than 50% of the building to be in non–residential use, e.g. shops or offices

So if the RFR doesnt apply because of the above I guess the freeholder can sell it to whoever he wants.  

6 hours ago, Richlist said:

* I'm guessing/hoping that a photo showing cavity wall insulation being installed during construction will provide sufficient evidence ?

May I make a few additions to Grandpa's list....I have no idea wether they will factor EPC improvements but they should.

* Reflective foil behind all radiators on external walls.

* Draw curtains with linings.

* Baloon fitted to seal off unused chimneys.

* High current draw appliances set to run on low rate timers.

My EPC assessor would accept photographic evidence provided he can keep a copy for his records in case he get audited. He also says he is not expected to test appliances to make sure they work or are connected. 😉  

Well the EPC and its rating appears to be a element within the lending criteria of obtaining funding more and more. Whether it is better mortgage rates for "good" ratings or not meeting the criteria for funding at all with certain lenders. I can only see this as getting worst. 

If a property doesn't reach the minimum rating for  BTL lending you are restricted to cash purchasers or owner occupiers. In my experience the normal BTL lenders wont lend even if you are planning to renovate.  

If you can squeeze the rating up to a C now it will at least increase market of potential buyers when it comes to selling.

The cheaper end of increasing a EPC rating if you dont already have them is fitting:

1. 300mm loft insulation
2. TRV to all radiator's
3. Room thermostat
4. Separate Central heating Programmer (some boiler installs dont have them fitted)
5. Draft extruder for wooden front/rear doors
6. Programable heater for communal hallways leading to flats
7. LED lighting throughout 
8. Programable heating in all living spaces ie: lounge, bedrooms, dining rooms etc
9. If only part DG consider doing the remaining windows.
10. Make sure the inspector has access to the meter cupboard if duel fuel (off-peak supply)  
11. Water tank jacket
12. Provide proof of cavity wall insulation if you have it otherwise it will be assume not.

1 hour ago, kanrent said:

I had buyer's interested in one of my properties they had no interest in the ECP rating which has got me thinking if people are interested in buying to live in they have no worries about the EPC's unless they are BTL buyers

Maybe there will be a glut of landlords with poor EPC rating properties shortly selling up because they they don't have the will, knowledge or funds to bring them up to the required EPC standard come 2025/28. This may mean a reduction in the uk PRS and and opportunity for some landlords to pick up some more properties at a good price for their portfolios.

However, they may need to be cash purchasers as lenders don't appear to like lending even at present unless the EPC rating is at least a E/F so that criteria may rise even higher for BTL lending in the near future.     

If the bathroom is still functional, no further damage is being caused and the tenant is slowly catching up on the arrears I would consider letting the situation continue until the arrears are paid off as it is unlikely you will get them after she has vacated. Deal with the damaged bathroom after the tenant has left.

If the arrears are increasing and there is further risk of damage to your property you need the tenant out asap. Which if the arrears are more than 2 months rent you can use a section 8 with grounds 8,10,11. You can also serve a section 21 subject to it being served correctly.  This means if one fails you can fall back on the other. 

Have you informed the housing sustainment officer at the council of the situation as sometimes they can help or pay off the arrears if the notice has been served.

Before you serve any notices it is important that the following doc's have been given to the tenant as if the tenant can reasonably say they never received them the eviction will be struck out at the court hearing. We now resend these docs a couple of days before the s21 or s8 are served (proof of postage) with a letter saying "please find attached  the following replacement documents relating to your tenancy" so there is no dispute that they never got them.

1. Deposit certificate 
2. Deposit Prescribed information
3. EPC Certificate 
4. Gas Safety Certificate
5. Electrical Safety Certificate
6. The latest version of the "How to rent Guide"

Also make sure any maintenance requests that you have been informed about are being dealt with and you have a chain of correspondence from & to contractors/tenants as outstanding maintenance the the landlord has been previously informed about in writing but not acted upon could be a ground to strike out a eviction hearing. 

I would be reluctant to spend too much on the bathroom while the tenants are there (if you are kicking them out) as and maybe consider doing the minimum to keep it functional.

Fun being a landlord isnt it?