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August 13, 2010
The sales market has had its first stutter in almost a year. Having made a quite remarkable recovery (given the global disaster banded about everywhere) over the past 12 months, Vendors and Agents alike have seen the market slow considerably.
Traditionally, of course, the summer months are quieter months due to the holiday season….maybe this is all it is. We will soon know by mid October!
Of course, some also blame the abolition of HIPs. Hated by Agents and public alike for so long, Agents have come to realise one good thing about them- you knew Vendors were serious about selling. Very few Vendors would be willing to shell out £300 just to ‘test the market’. With the departure of HIPs, we are back to the days when listing a property costs nothing (at least not to the Vendor if you user an Agent). This has meant that a gluttony of property has hit the market, far too much of it at over-inflated, un-sellable prices, softening the market with over supply.
Of course, over time, it will adjust….but this is not doing anyone any favours!
The rental market on the other hand has had its foot on the accelerator since early May and has no intention of slowing down. Demand is constantly climbing, and prices with it, much to the delight of Landlords and Letting Agents all over the City.
Of course, we are in the Letting Boom Months now and every Agent will be madly scrabbling to secure every deal they can before October arrives.
Why before October arrives? Quite simply- because none of us know what will happen as we climb back in to the winter months. With December and January traditionally very quiet due to festivities and the expense of the time of year, deals are usually thin on the ground. Could this year be different?
Who knows, we all have to just wait and see! But if you are a Landlord, the market is great right now- give your local agent (or me) a call….you might be surprised how much better rents are than last year!
July 30, 2010
Dealing with maintenance issues for our managed clients is typically at one end of the scale or the other.
Either I contact 3-4 companies, provide details and shortly receive detailed quotes, in writing , within 24-48 hours of the request. These are then sent off to my client, along with my comments and recommendation, and I await a decision. Works are booked and job done- hooray!
Or……….well, simply put- how do these companies survive? Case in point- I am currently trying to compile quotes to have a small metal fence and gate made and installed at a property we manage in Lewisham. The local kids are continually climbing all over the current one and breaking it and the Landlord is fed up of paying to repair it every 3-4 months.
A local search quickly reveals a list of 5 companies all within 3 miles of the property and I promptly set about contacting them for quotes. A description of what is needed given along with the address so they can do a drive by survey.
The quotes were requested/arranged on 15th June today is 30th July- how many quotes have I received to date? One- and even that came back wrong and had to be sent back.
Each company has been called at least 6 times to little avail- recently one even turned around and advised me that their gates and fencing weren’t very good quality so would probably break/bend if kids climbed on them (impressive). They then gave me details of another company that produced higher quality fencing and would happily do the job. I have called three times, left three messages and am yet to hear a word from them.
The point of the article is two-fold: Don’t take for granted what a good Managing Agent does for you. If they do their job right you should rarely know of the hassle they go through to deliver the results you expect and deserve. Secondly, if you are looking to set up your own business and don’t know what to do I recommend setting up a company doing Fencing in and around Lewisham- as long as you answer the phone you should make a killing!
July 14, 2010
If you rent out furnished property, other than holiday lets, you are allowed to claim the cost either through:
10% wear & tear allowance
The allowance is given every year and is equal to 10% of the net of the total rent for the period less charges and services which would normally be paid by the tenant, such as Council Tax, water rates etc).
or
On a renewals basis
If you use the renewals basis you cannot claim for the original purchase of the equipment (fridges, hobs, ovens etc.) furniture or fixtures.
You can, however, claim the cost of renewing any of the above items, perhaps, even at the end of the let.
If you would like to discuss this further and join us at GC Accountants please contact our Tax Partner Harry Charalambou ACA ACCA on 020-8886-3672.
Disclaimer
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken by GC Accountants or Base Property Specialists Limited for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
June 25, 2010
The Emergency Budget earlier this week started with some of the cuts and taxes that had been rumoured. We all know this to be a necessary evil, having buried ourselves in debt over recent years.
What applied to the property market?
Capital Gains Tax (CGT)- Rumoured to increase to 40-50%, the actual increase to 28% for higher rate income payers is far more digestible. With fears this would de-stabilise the private rental sector, whilst making investment less rewarding for many in London, this is manageable.
VAT- this will rise to 20% on 1st January 2011. Causing a nominal increase to those using agent and other property related professional services alike, the 2.5% increase will dent the pocket without, hopefully, over-burdening.
Council Tax- this will be frozen for a year in 2011. This is good news for the private rental sector avoiding increase in living costs for tenants. This helps keep this sector more viable and should help reduce rental defaults.
Unemployment- stats suggest that this should peak this year at just over 8% with a gradual reduction over the next 4-5 years as the country, and its economy, recovers. As this number does reduce, in theory, this means more viable buyers/renters on the market and therefore we should see a gradual growth over this period of demand across the board.
Overall, many would agree that the property sector has escaped relatively unscathed. How we fair in future budgets, and how well these measures work, remains to be seen.
Comments by Labour attacking many of these measures seemed ridiculous- the government that had systematically buried us up to failing point in debt still seemed to think borrowing more was the way forward! I know they have to comment, and couldn’t possibly agree, but really?? Maybe you should have just kept your heads down this time and tried to let us all forget that it was you that put us in this mess in the first place!
June 17, 2010
Under some circumstances you can claim various expenses that were incurred before the first letting period.
Repairs may be able to be claimed as an expense against Rental Income when:
- The property was habitable before the repairs were effected
- The property was fit for purpose
- The repairs were for the purpose of making good the existing state of the property.
The general rule is that expenditure on additions, alterations or improvements is of a capital nature but the cost of repairs, ie restoring to original condition, is an allowable revenue expense.
Claiming the above expenses will reduce your tax liability and any excess expenses over rental income can be carried forward to be used against future rental income.
The difference between revenue expenses and capital expenses can sometimes be vague and it is of vital importance that you seek advice from a firm of qualified accountants in order to minimise your tax liabilities.
If you would like to discuss this further and join us at GC Accountants please contact our Tax Partner Harry Charalambou FCA FCCA on 020-8886-3672.
This blog has been provided by Harry Charalambou FCA FCCA of GC Accountants visit: www.gcaccountants.com
Disclaimer
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken by GC Accountants or Base Property Specialists Limited for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
June 15, 2010
Mortgage Life Insurance – do I need it?
Mortgage life insurance is life assurance that usually pays out a lump sum equal to the amount owed on a mortgage. So in other words in the event of the death of the policyholder the policy would normally provide cover equal to the balance remaining on the mortgage. This is paid to the nominated beneficiary of the cover. Mortgage protection insurance as it is also known tends to be the least expensive form of life insurance.
Many people consider mortgage protection to be an added expense they can do without. It is an added expense of course in the same way car, household and other forms of insurance are also added yet necessary expenses. These days as life expectancy increases it’s not as big an expense as it once was with some discount premiums costing below £10 a month depending on the age of the policyholder and a number of other factors.
So how important is mortgage protection insurance? Can I get by without it? This really depends on the people it protects. This is of course the people who are left behind rather than the policyholder personally. For those with families who rely on the income of the policyholder such as partners with children or those who can’t work for other reasons, or anyone who would struggle to meet payments, mortgage life insurance is a reassuring item to have. If the policyholder dies the insurance can be used to pay off the entire mortgage in a lump sum and so remove the major financial burden imposed on the surviving relatives who probably have enough to deal with in those circumstances.
The web has a wealth of good websites that can explain the benefits of life and critical illness cover in greater detail. There are sites that have built in quote systems to allow you to quickly find the best rates and policy details and there are many qualified advisors who can provide help and assistance with choosing the right policy and protection for you. As with all such things your own research is invaluable as is a recommended advisor you trust.
This article is by David Whitehouse of www.david-whitehouse.co.uk
June 11, 2010
It was confirmed on 10th June that the government will proceed with the proposed changes to the AST threshold. At present, for residential tenancies of under £25,000 per annum, where the property is let as a whole for less than 3 years- the property must be let on an AST. Properties let to companies or in excess of £25,000 per annum would either typically be drawn up as Common Law Agreement or a General Tenancy Agreement.
This meant that, when the new Security Deposit protection legislation came in to effect on 6th April 2007, private tenants paying over £25,000 per annum and (in London) Security Deposits of around £3000+ were not protected.
This is all now set to change. The threshold for ASTs is set to increase on 1st October from £25,000 to £100,000 per annum. Due to the strict rules in place regarding the handling of Security Deposits and their registration with one of the 3 approved schemes (TDS, TDSL and The DPS) it is vital that Landlords, Property Managers and Lettings Agents alike operating in this sector of the property market monitor this matter closely. There are heavy penalties for defaulting in place and, at these levels of rent, the fines could be as high as £50,000+.
It has been confirmed that this will apply to current as well as future tenancies although there may be exceptions for tenancies that have been in place for over a certain period of time. Whatever happens, Landlords, Tenants and Agents alike must follow this closely to ensure they are fully aware of both their rights and obligations.
I recommend that you talk to your agent, seek advice from one in the know or contact the Deposit Schemes for further information and ongoing updates.
May 25, 2010
Agents have a lot of tools at their disposal today, but which ones work for you?
Property portals- Rightmove, Findaproperty, Primelocation and PropertyIndex- these 4 sites (along with an agents own private site) will account for 90% (if not more) of all high calibre leads. Other portal marketing is good as, the more places your property appears the better, but more than this is really just to impress the Landlord. However this is the most important tool in marketing your property!
Photos & Floorplans- Professional photos are nice and for high-end properties (£750,000+) I would recommend them HOWEVER private photos taken carefully by an agent with a good standard camera will have the same impact online as professional work. Floorplans are another matter! All the portals state that floorplans mean more ‘detailed enquiries’- this means where people click on a property to see more info (e.g. the floorplan) however there are no stats to say that they help sell/let them quicker. If space or layout is a particular feature then I think these are valid and I think they are more appropriate in sales than lettings but I generally feel these are more of an agent marketing tool than a property one.
Magazine spreads- after almost 10 years in agency in London I can only attribute a handful of deals to an enquiry from printed page……but I can associate hundreds of property instructions to them. This is possibly the greatest trick of all agency marketing! As a Landlord or Vendor how can you NOT be impressed by an 8 page spread in the local magazine/property supplement? Wow- these guys really invest money to sell/let my home…..No! Although SOMETIMES this works the reality is buyers and tenants alike go online or walk in to a shop, they do not rely on a magazine to find their home as, by the time they are printed and distributed, half the properties have already gone (if the agent is any good). This is almost purely a ‘brand awareness’ exercise- don’t be fooled. Unless you are marketing a £1m+ property and want some ‘unique marketing strategies’’ then pick an agent based on whether you like them (yes I used the word like) and have they succeeded in selling/letting anything similar?
All the rest- there are a lot of other gimmicks out there including virtual tours, audio tours, 3D models, lottery prize sales….and more. The truth is most of these don’t actually sell property, they sell estate agents. These can ADD to a sales force but focus on the core elements when choosing someone. Local market knowledge & experience, likeability factor, recent success and finally professionalism!
It is always interesting to listen to people talking in bars, pubs or just around your table. For a lot of people, even in the 21st century, it is still a sign of weakness to see a therapist or a coach. For some of us, it’s even the sign that ‘I’m nuts’.
In the corporate world, it is a normal procedure and for so many Executives, Managers and CEO’s coaching is a core part of their weekly schedule.
At the same time, you don’t need to be rich to have a coach. You just need to know how much it costs you not to have one.
When you are on your own, you always think the same way- you ask yourself the same questions and avoid the right questions. It’s not that you don’t want to progress, it is more about a sort of self-protection against what hurts and what is possibly embarrassing or difficult to deal with.
A coach helps you to define your real goals, helps you go beyond your limitations and limiting beliefs.
If we don’t believe that we can achieve something, in fact, you will conform to this belief.
Henry Ford said: ”whether you believe you can do something or not, either way, you are right”.
The first quality of a coach is to listen. The second is to ask the right questions!
Despite our beliefs, many of us have confidence problems and this lack of confidence separates us from our real dreams and full success. We usually limit ourselves in strange ways. We easily doubt that we deserve success, but success can only occur if we are achieving what we really enjoy, what we are passionate about.
Being our true self, we can accomplish what we are supposed to and there’s no dream too big for someone with a genuine faith in him/herself.
Coaching can make a significant difference in your future. Even if it is your ego telling you that you don’t need anyone’s help, isn’t it worth giving it a try? Honestly, what have you really got to lose?
Article provided by Denis Gorce-Bourge of www.gblifecoaching.com
May 20, 2010
The Conservatives and coalition, have stuck to their word and moved swiftly to stop the requirement of HIPs. An announcement made this morning stated that HIPs would be suspended with immediate effect whilst the full legislative change is drawn up.
Properties will still be required to have an EPC (Energy Performance Certificate) in order to be marketed however these are much cheaper and quicker to arrange than HIPs ever were.
AHIPP, a body formed to support HIPs, is going to try and work with the government to try and salvage the ‘best aspect of HIPs’ in order to try and develop a genuine document that speeds up the buying process without delaying a property’s marketing- what this will mean or be remains to be seen.
Many agents and vendors will be delighted with this swift action although I remain sceptical that this will really make any difference to the sales market- particularly in London where HIP prices are very cheap in comparison with property value. However, it is nice to see that the government have moved swiftly and made good on their word- long may it last!
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