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Jun 21, 2017
Banned 'Tenant Fees' Part 2
More doom and gloom and yet another own goal for the government We were told this would be happening in November last year (see Banned 'Tenant Fees' good for tenants?) but that there would be consultation with the industry into what the impact such a ban would have. Research conducted by Capital Economics for ARLA Propertymark earlier this year carried out surveys with agents across the country to determine what impact the ban would have on a range of aspects, from jobs, to rent prices, to property availability. The report produced showed a ban on letting agent fees will cost the sector jobs, make buy-to-let investment even less attractive, and ultimately result in the costs being passed on to tenants. The Research shows that referencing checks undertaken by agents take, on average, eight hours to complete. It is therefore right and proportionate that the industry is recompensed for this work, which benefits tenants. The research also showed that letting agents stand to lose around £200 million in turnover, costing the sector 4,000 jobs. Landlords themselves would lose £300 million, meaning they may seek to cover their losses by increasing rents to tenants. On average, rent costs will go up by £103 per tenant, per year, ultimately meaning tenants who move more frequently will reap savings on their overall costs but longer term tenants, who are usually lower-income families, will see a loss as their rents rise year-on-year. The ban, therefore, contradicts the Government’s stated aim to encourage longer term tenancies, as tenants who stay in their homes for the long-term will end up shouldering the costs of those who move more frequently. THE IMPACT OF RECENT EVENTS During the time period this report was being conducted, Teressa May decided to call a snap election resulting in a hung parliament with a majority government still to be had. In addition, there have been three terrorist attacks in the UK, the tragic fire in Grenfell Tower and negotiations have started on Brexit. Therefore it's unlikely the Government had enough time to analyse all of the responses from the consultation, as it only closed 12 working days ago, on the 2nd June. It appears they had already made their decision and therefore the consultation was no more than a ‘tick box’ exercise and they haven’t appropriately taken the industry’s views into account. A bit like the general public's attitude to the Tory manifesto! QUEEN'S SPEECH ANNOUNCEMENT The Queen's Speech states: Tackling unfair fees on tenants will make the private rental market more affordable and competitive. The draft Bill will bring forward proposals to: ban landlords and agents from requiring tenants to make any payments as a condition of their tenancy with the exception of the rent, a capped refundable security deposit, a capped refundable holding deposit and tenant default fees cap holding deposits at no more than one week’s rent and security deposits at no more than one month’s rent SECURITY DEPOSITS In response to the consultation document, it made clear that security deposits should be set at a level that ensures that tenants have a meaningful stake in paying the rent and maintaining the condition of the property. In setting the figure at no more than one month's rent, the Government are failing to take into account any damage that can be incurred while a tenant is simultaneously defaulting on the rent. Experience has shown that for agents and landlords that have asked for a deposit equal to a month's rent in the past, some unscrupulous tenants default on the last month's rent and simply forfeit their deposit. With no additional funds to cover any cleaning or delapidations that may inevitably arise (especially likely if they are the sort of person to default on rent), the landlord is left out of pocket, paying for cleaning or damages caused by the tenant. Landlords and letting agents throughout the country will inevitably have to work out how to manage the risks involved and recover the difference in costs, the most obvious being, agents increase fees to landlords, and landlords increase the rent to cover extra costs and damages which a deposit otherwise would have satisfied. FINAL WORD It would have been great if the Government had scrapped this, like they have done with the Dementia Tax, like they have done with the scrapping school meals, like they have done with potentially bringing back fox hunting, like they have done with grammar schools, but sadly no, this piece of legislation has stayed, from a consultation that was ignored. Legislation that is going to have the exact opposite of what it set out to do. Good job!
May 16, 2017
Changes to Capital Gains Tax — How are Landlords Affected?
The 2016 budget inaugurated some major changes to the capital gains tax, which could have some major implications for buy-to-let landlords – especially those with diversified investment portfolios, and other companies. WHAT ARE THE CHANGES? Effectively, there has been a decrease in the capital gains tax on most "chargeable gains": The 18% rate became 10%, and the 28% rate became 20%. One exception, however, is those chargeable gains that accrue on residential properties that do not fall under the relief umbrella for private residences. The former 28% rate was generally applied to higher-rate taxpayers, trustees and companies, whereas the 18% rate covered anyone not in those categories (generally lower rate tax payers). The residential property exception under the new law is pretty stringent. Under the banner of "residential property", the measure includes any land that has had a dwelling on it at any point during the current ownership. WHY WERE THEY IMPLEMENTED? The idea behind these policy changes is to promote business growth and investment activity. The general wisdom is that low capital gains rates mean companies are freed up to do what they need to; essentially, to expand their capacities and create jobs. The idea behind the exception with regard to residential property is to encourage investment in companies, rather than properties. The new rates will be affecting all relevant gains realised since 6 April 2016. WHAT WILL THE IMPACT ON THE ECONOMY BE? The changes will significantly decrease the amount flowing into the Exchequer coffers, to the tune of £600-700 million per year over the next five years, according to the Office for Budget Responsibility. On the other hand, it will significantly bolster company coffers, giving businesses the capital they require to grow and open up new jobs. It will also have a major effect on those individuals and families with significant capital holdings, and those who make multiple investment transactions throughout the year. With new lower capital gains tax liability, they will now have more room to play with when it comes to managing and growing their investments. Of course, things will not change quite so much for those holding residential properties, unless of course they opt to switch some of their investments from properties to enterprises. However, the changes are designed so that they do not disproportionately affect any particular income group. The government holds, in addition, that there will be no negative impact on businesses or other organisations, as the changes are aimed primarily at individuals with capital gains tax liabilities, personally or professionally. WHAT SHOULD I DO IF I AM AN UNINCORPORATED BUY-TO-LET LANDLORD? This is the question many people are asking, and unfortunately there’s not a perfectly clear answer. One possible option is to incorporate, which also allows you to avoid private income tax rates, and take advantage of corporation profits taxes, which decreased in April 2017. However, there are of course other costs to consider involved in running a business, including administrative costs and those related to renegotiating mortgages.
Apr 3, 2017
Rents to Rise as Demand Outstrips Supply
Rises in rental prices in the United Kingdom are predicted to pick up their pace in the next five years, according to a new survey by the Royal Institution of Chartered Surveyors (RICS). While property values are expected to grow by less than 20% in that period, RICS predicts that rental prices will go up by over 25 per cent. This could mean good news for landlords who may be able to get more out of their rental portfolio. MORE AND MORE DEMAND, LESS AND LESS SUPPLY The last three months of 2016 saw the demand for rental properties among tenants continuously increasing. In addition, the ARLA Propertymark group reported that the number of prospective renters who were newly registered with letting agents increased by as much as 31% in January. At the same time, RICS predicts that landlords will continue to shrink their portfolios over the course of 2017, giving fewer properties for tenants to pick from, and pushing rental prices up. The last quarter of 2016 was the fourth in a row that saw a drop in new listings on the rental market, according to RICS. This is because many buy-to-let investors are selling properties, with house prices in general at all-time highs, and in light of some of last year’s unfriendly legislation. For more information read: Claiming of tax relief on Mortgage Interest over the next few years The Government's Housing White Paper: What does it mean for Landlords? Hammond's Autumn Statement: What It Means for Landlords Banned 'Tenant Fees' good for tenants? Among these are Fergus and Judith Wilson, the biggest landlords in the country, who pointed to the increased stamp duty as putting a pinch on their rental operations. They said that this, and newly tough rules on mortgage lending, meant that the prospects of landlords will be increasingly grim in the UK. This all means that rental prices will continue to increase, with letting agents reporting rental rises of as much as 23% in January, according to ARLA Propertymark. POSSIBLE ENCOURAGEMENT FOR LANDLORDS? While the RICS survey’s outlook was relatively gloomy for landlords, the government’s housing white paper, which was released shortly thereafter, seemed to promise some encouragement for the buy-to-let market. The government put emphasis mainly on getting developers to invest in large-volume rental properties and "family-friendly" tenancies. RICS’ head of UK Policy, Jeremy Blackburn, said that some sort of "turbo-boost" for build-to-renters would be necessary. He called for an end to "punitive measures" that work against landlords who are making an effort to increase the country’s rental stock. He added that the government needs to avoid enacting conflicting legislation, like pushing the ban on letting agent fees while also trying to force longer tenancies. Blackburn pointed out that moves like these were sending mixed signals – and therefore creating uncertainty in the sector. The RICS survey found that 25% of surveyors saw house prices rise in January. This trend is expected to continue in the next year across the country, with the exception of the capital. All in all, things continue to be uncertain for the buy-to-let market, as Brexit and last year’s policy changes begin to take full effect. It remains to be seen what’s in store for landlords in the year to come. If you would like to discuss you indivdual circumstances, why not give us a call.
Mar 20, 2017
What are Landlords' Biggest Concerns for 2017?
The job of landlords has been getting increasingly complicated as the housing crisis persists, and various plans of action have been proposed in response. While the high demand for housing makes it a good time to let your property at attractive rates, there is an ever-changing (and growing) number of policies with which landlords need to comply. There’s no doubt that the rental sector is transforming rapidly. That's why the landlords' insurance company Homelet has conducted a survey of over 4,000 landlords from all over the country, to find out what their biggest concerns are for 2017. Here are the broad strokes: (MORE) NEW LAWS Many of the biggest changes in the past few years have not been a result of market forces, but rather of the government’s reactions to these. From 3% stamp duty to the ban on agents charging letting fees, housing- and letting-related legislation has been plentiful, dramatic, and often worrisome for landlords. With that in mind, many landlords are both fearing and hoping for new legislation in the coming year. 31% of the landlords responding to the Homelet survey list new laws as their biggest concern for the next year. RESTRICTIONS ON LENDING AND TAX RELIEF FOR INTEREST Two closely related issues that have major implications with regard to financing rental properties are restrictions on mortgage lending, and on interest tax relief. Each category was listed as a concern by 29% of respondents in the Home Let survey. While the restrictions on tax relief will largely affect those landlords in the higher tax brackets and may decrease their returns, limitations on lending will affect those landlords looking to acquire new properties and expand their portfolios. BREXIT AND THE FALLOUT With the recent activation of Article 50, Brexit has officially begun, but the full implications of it have yet to become clear. Many landlords (roughly 19% of survey participants) are therefore still understandably concerned about what it will mean for them. The biggest issue here relates to supply and demand with regard to rental properties. A large percentage of London landlords, for example, may be worried about a depletion of the EU migrant tenant population in the famously diverse capital. HOUSING PRICES While the general trend in housing price values has been up, up, up in the past few years, most predictions foresee a general slowdown in 2017. This has around 14% of survey respondents worried. Rental values are, of course, also a concern, but landlords tend to like to see the overall value of their portfolio grow as well – and that’s why it makes sense that a slowdown would cause some concerns. RENT ARREARS Finally, over half of respondents to the Homelet survey said they had had a bad experience with a problem tenant. This is an age-old problem when it comes to rental properties, which goes to show that even in a time of rapid transformation, some things never change!
Oct 14, 2016
Romiley, Bredbury & Woodley
Working around in Manchester or Stockport does not mean you have to live your whole life in a busy commercial centre. There are plenty of towns in commuting distance that have great access to nature and the pleasures of country living, and two very attractive options are Romiley and Woodley. Here’s why... 1. NATURE: THE PEAK DISTRICT Far and away one of the biggest draws of both Romiley and Woodley is that they serve as a kind of gateway to the Peak District. This means you can be an easy commute from your job in Stockport, and still have one of the country’s most beautiful national parks on your doorstep. So, you can work in the city and take advantage of a world of outdoor activities. With over 200 square miles of open access land, the park offers endless amounts of trail walking, including the Pennine Way National Trail, a part of the E8 European Walking Route, which extends all the way to Turkey! Additionally, Parsley Hay and Ashbourne, both 50 minutes to an hour from Romiley and just a few minutes farther from Woodley, have well-equipped cycle hire companies, ready to outfit you for some weekend joy-riding. Finally, for the most adventurous nature lovers, there are a number of campsites in the Peak District where you can pitch a tent and spend the night. 2. CONVENIENCE: TRANSPORT LINKS But living in Romiley or Woodley isn’t just about the ease of getting outdoors; it’s also about being in the right spot for your commute – and if you happen to work in Stockport, you'll find both towns extremely convenient. Woodley is about 15 minutes from Stockport on the 330 bus from Ashton, which leaves every 30 minutes during rush hours. For Romiley, take the 383 bus, which takes just under half an hour. Both buses drop you off at the city centre bus station, so you are likely to be an easy walk from work. Additionally, Romiley is around 20 minutes from Manchester Piccadilly Station on the train, while Woodley to Manchester takes just 4 or 5 minutes longer, meaning that an evening out in the big city is easily doable. 3. THE TOWNS THEMSELVES Romiley and Woodley are very well positioned between the city and the country, but they are also great places to call home. Woodley has the scenic Peak Forest Canal running through it, and five lively pubs anchor the town’s nightlife. Young families will also have their choice of two excellent primary schools, Woodley Primary School and Greave School. Meanwhile, Romiley boasts four historic conservation areas, protected by local official to preserve interesting aspects of the town’s architecture and history: the Barlow Fold, Chadkirk, Church Lane and Greave Fold. The Romiley Primary School is also an excellent educational institution. Whether you have just landed a new job in Stockport or you have been working there for years, if you are missing nature and small-town life, moving to Romiley or Woodley is one of the best decisions you can make.
Aug 1, 2016
Work in Manchester, Live in the Countryside
Are you a country person with a city job? It’s a tough situation to be in, and unfortunately it’s an all too common one in our modern urbanised world. The good news, if you work in Manchester, is that the countryside isn’t so far off, so you can easily take full advantage of rural life while working in town. It’s just a matter of finding the right countryside home, a reasonable distance from your office. There are definitely loads of great reasons to choose this kind of commute. The countryside around the Manchester area offers no end of opportunities for enjoying nature. Here are just a few of the great places you can go, and things you can do: The Carrs Park: One of the tamest options, and great if you are a family with young children, the Carrs Park sits along the Bollin River and is a lovely, well-designed outdoor environment. There is a great playground and a circular walk that stretches for about a mile. You can also get in your fair share of paddling in the river. Alderley Edge: If your family is slightly more adventurous and the kids are a bit older, you can check out the fantastic views on offer with a walk around Alderley Edge. There are a range of walking options here that will get the explorers in your family right out into the natural world. It's also a birdwatcher’s paradise; you can see woodpeckers, woodcocks, bullfinches, ravens, and much more. The nearby Hare Hill Garden with its additional hiking options means you’ll never run out of possibilities, even if you go every weekend! Bruntwood Park: Sporty types might want to head on over to Bruntwood Park where there are plenty of football pitches, 18 holes for pitch and putt golf, and a BMX cycle track. There’s something for everyone here, because Bruntwood also has its share of beautiful gardens and waterways, and an excellent toddler play area complete with a bouncy castle. The park’s Vinery Restaurant, housed in a gorgeous restored Victorian conservatory, is a great place to feast and unwind, once everyone has had their fun. The Ice Cream Farm: If your family’s day out needs to be inspired by some enticing treats, than the best place to aim for is the Ice Cream Farm in Tattenhall. Part adventure and part sweet-tooth paradise, the Farm is a great place to play some games, ride some rides and enjoy some of the best ice cream in the region. The place is also home to Europe’s biggest indoor sand and water play area. Cycling: Country living is also especially good for cycle enthusiasts who want to get out and explore in every direction. If that’s you, be sure to get yourself equipped for adventure at Rick Green Cycles in Wilmslow, where the equipment is top-notch and the staff are even better! The local area offers many more opportunities to get out and enjoy nature, which what makes living in the country a great option for anyone working in Manchester. Contact Property Genius for more information and friendly advice on local properties.
Jun 6, 2016
Five Great Schools in the Wilmslow Area
With property values at an all-time high and still going up, many of us are thinking about where it is best to invest if we want to buy a home. One thing to consider is that there is an undeniable link between property values and the quality of local primary school education. Research has proven that areas with better schools also have higher property values, so that’s one thing to consider when you’re looking for a place to buy a home. PRIMARY SCHOOLS AND HOUSING PRICES In fact, it's long been thought of as simple common sense that good schools and high house prices go hand in hand, but not until recent years was the idea backed up by science. A 2012 study by the Centre for the Economics of Education found that house prices go up significantly with improvements in average standardised test scores for a given district. FIVE GREAT PRIMARY SCHOOLS IN THE WILMSLOW AREA The Wilmslow area offers abundant choices for great primary education. Here are just a few of the best options: Lacey Green Primary School An academy on Barlow Road, Lacey Green emphasises a "welcoming, calm and purposeful atmosphere, in which everyone feels comfortable and motivated, and takes pleasure in his or her learning." They also focus on developing self-discipline in their students and promoting "British values." The school got 95 points (out of 100) on the "Smart Rating" from the website findthebest.co.uk/. It was especially highly ranked in terms of teacher quality. Ashdene Primary School Ashdene is a community school on Thoresway Road that says its core values make it "caring, respectful, inclusive and empowering." The school got an 89 in the Smart Rating and was labelled "outstanding" when it comes to "behaviour and safety of pupils." Gorsey Bank Primary School Also a community school with an 89 in the Smart Ranking, Gorsey Bank is located on Altrincham Road. The school’s motto is "Learning for Life" and so they aim to instil in their pupils a commitment to perpetual development, and a broadening of knowledge. According to their mission statement, "We aspire to be the very best that we can be, with a reputation for excellence... we embrace change, push boundaries and take risks. Our children will be emotionally intelligent individuals who can adapt to an ever-changing world." Lindow Community Primary School Lindow is a community school on Upcast Lane, and it has a score of 83 on the Smart Ranking. It lists as its most important aims, the development of: "enquiring and imaginative minds (problem solving, divergent thinkers)" "healthy attitudes to living" "respect for themselves and others" "team spirit and good sportsmanship" With roughly 150 pupils, Lindow is also a relatively small school so provides an intimate community for its students. St Anne's Fulshaw C of E Primary School St. Anne’s is a voluntary controlled school affiliated with the Church of England and focuses on "high quality education." Located on Nursery Lane, they received a score of 82 in the latest Smart Ranking. If you’re investing in a new home, it might a good idea to locate yourself near one of these excellent education establishments!