Wednesday 26 August 2015

Half of landlords affected by removal of wear and tear allowance

Almost half (47 per cent) of landlords will be affected by the removal of the annual wear and tear allowance, according to new findings from the National Landlords Association (NLA).

The research findings show that a quarter of landlords (24 per cent) let their properties fully furnished, with 22 per cent letting a mixture of furnished and unfurnished properties. Just over half of landlords (53 per cent) let their properties on an unfurnished basis.

The news comes shortly after the government announced its intention to scrap the annual wear and tear allowance – which is only available for furnished properties – and replace it with a tax relief system that enables all landlords to deduct the costs they actually incur on replacing furnishings in the property.

The new system, currently under consultation until the 9th of October 2015, will apply from 6 April 2016 for Income Tax purposes and 1 April 2016 for Corporation Tax, and will cover the cost of replacement furniture, furnishings, appliances and kitchenware provided for tenants including:

Movable furniture and furnishings
Televisions
Fridges/freezers
Carpets and flooring
CurtainsLinen
Crockery or cutlery

Chris Norris, Head of Policy at the National Landlords Association said:“We fully understand the frustration of those landlords who let exclusively on a furnished basis as the removal of this allowance will very likely represent a reduction in the relief they can claim.

“However, it will come as a welcome revision for those letting a mixed portfolio, unfurnished, or part-furnished property as the replacement system will allow them to deduct legitimate revenue expenses in the future.

“The NLA has broadly welcomed these proposals as it should lead to a fairer system for more landlords. However, as we transition from one system to another, we will push to make sure that any landlords who’ve made recent investments with the expectation of offsetting the cost over a number of years using the current allowance, will not be disadvantaged”.

Thursday 20 August 2015

New law means Wales is first part of UK to introduce training for landlords and agents

Rent Smart Wales. A new law that is being introduced this autumn which will affect all private sector landlords and housing agents in Wales.
 
Everyone who owns and rents out private property in Wales will have to register with a central licensing authority and obtain a new type of licence under a new law from this autumn.

It means that Wales will become the first part of the UK where managing landlords and agents will need to undertake training to ensure they are aware of their rights and responsibilities.

The new Rent Smart Wales scheme aims to raise standards in the private rented sector and will replace the existing voluntary Landlord Accreditation Wales scheme, which has been operated by Cardiff Council on behalf of all local authorities in Wales.

It is intended that the new legislation will also result in raised awareness by landlords and agents of their respective rights and responsibilities and in turn, raised awareness by tenants of their respective rights and responsibilities.

All private landlords who have a rental property in Wales must register themselves and the addresses of their rental properties in Wales and those who undertake defined letting or property management activities at a rental property in Wales must apply for a licence. 

If a landlord instructs an agent to do such work on their behalf, it is that agent who must become licensed and in order to get a licence a person must be adequately trained, and also declare themselves ‘fit and proper’.

Licensing training will be offered through Rent Smart Wales or people can choose to attend Rent Smart Wales approved training courses delivered by other bodies.

The Welsh minister with responsibility for housing, Lesley Griffiths, is encouraging landlords and agents to subscribe for important news and information ahead of the changes.

‘We know approximately 184,000 homes in Wales, around one in seven, are now privately rented. With so many people renting, a strong sector with good working practices is absolutely essential,’ she said.

‘The new legislation we are introducing will not only improve the situation for tenants, informing them of their rights and responsibilities, it will also help good landlords by improving the sector’s reputation,’ she explained.

‘When Rent Smart Wales is introduced this autumn, it will provide a simple way for landlords to register and for them and their agents to become licensed. Ahead of the changes, I encourage landlords and agents to subscribe to register their interest and to receive useful news and updates,’ she added.

Cardiff Council, which currently operates the existing voluntary Landlord Accreditation Wales scheme, will be the licensing authority for the new statutory scheme, Rent Smart Wales, on behalf of all local authorities.

‘The scheme demonstrates the value of training and the development of positive relationships with landlords based on a better understanding of responsibilities and the potential risks of getting things wrong,’ said Bob Derbyshire, Cardiff Council cabinet member for the environment.
 
‘Rent Smart Wales is the next step, building on this early success, and provides an exciting opportunity for Wales to lead the way in professionalising the private rented sector through focusing on supporting landlords to get things right first time,’ he pointed out.

‘Centralised administration at Cardiff Council will deliver a consistent service across Wales and also provide the opportunity to establish a simple application process and reduce costs for customers,’ he added.

 At YOUR AGENT we've got you covered. Ciontact us today to find out how we can help you comply with the new legislation and take the stress out of managing your property.

Mortgage lending soars to seven-year high

Mortgage lending soared to a seven-year high in July as the housing market continued to gain momentum, figures showed today. 

A total of £22bn was advanced during the month, the highest level since July 2008, according to the Council of Mortgage Lenders (CML).

The group said the figure, which was also 9 per cent above lending in June, was in line with its expectations that mortgage advances would strengthen during the second half of 2015, following a subdued start to the year.

Activity in the housing market was muted in the run up to May’s General Election as many potential buyers adopted a ‘wait and see approach’, but it has bounced back following the Conservative victory.

A CML economist, said: “We expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers. 

“Today’s data is in line with our forecast that gross lending will rise to £209bn this year, 3 per cent higher than in 2014.”

Meanwhile, Government figures also released today showed a fall in the number of new build homes being built.

Only 33,280 new properties were started in England during the three months to the end of June, 14 per cent fewer than in the first quarter of the year and 6 per cent down on the same period of 2014.

Within the total, the number of private homes being built dropped by 12 per cent quarter-on-quarter, while housing association starts dived by 23 per cent.


Tuesday 11 August 2015

Fix your mortgage rate, homeowners warned

Homeowners considering remortgaging were today urged to move fast as fixed rate mortgages start to nudge higher.

High street lenders have increased the cost of 36 mortgage deals during the past month, compared to rises on just six products in January, as they prepare for a rise in the official cost of borrowing.
Increases have been made by a number of major banks, including Lloyds, Halifax, first direct and Santander, while other groups have withdrawn some deals completely.

The price hikes have led to the average cost of a two-year fixed rate mortgage for borrowers with a 40 per cent deposit rising to 1.86 per cent, up from 1.81 per cent at the beginning of July, according to financial information group Moneyfacts.

Typical prices on five-year deals for people borrowing up to 60 per cent of their property’s value have also risen, to stand at 2.59 per cent, compared with 2.54 per cent a month ago.

The group said it was the first increase in the average rate charged to borrowers with a large deposit for 12 months.

The rise in mortgage rates comes as little surprise, after Bank of England governor Mark Carney recently warned that the Bank Rate could start to increase at the turn of the year.

Today’s news on mortgages comes as the Bank’s Monetary Policy Committee begins its two-day interest rate-setting meeting.

Commentators have predicted that up to three members of the committee could vote for a rate hike this month, although the majority of the committee is expected to vote to keep interest rates on hold at their current record low of 0.5 per cent.

One pundit, urged any borrowers who were still sitting on their lender’s standard variable rate to move fast and remortgage before the cost of fixed rate deals rose further.

Saying: “People with higher loan to value mortgages need to try to fix onto a good rate now.
“Mortgages that are seen to be more high risk will be the ones lenders look to re-price first.”

But added that while lenders had increased rates on 36 mortgages during the past month, some had continued to cut the cost of their loans, and there were still good deals available.

A 0.25 per cent increase in the Bank Rate would increase repayments on a variable rate £150,000 mortgage by around £17 a month or £204 a year.

But in his recent speech Carney implied the Bank Rate could be increased to 2.25 per cent over the medium term.

A hike of this level would cost households with a £150,000 mortgage an extra £126 a month or £1,512 a year.