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With numerous changes taking place in the buy-to-let market, we expand on the 4 things every landlord - whether existing or prospective – really needs to know.
Buy-to-let is constantly, evolving with times (some say). These changes are designed to cool the market, and they're certainly shaking things up. So, whether you're a landlord or are considering investing in buy-to-let property in the near future, here are five things you need to know:
1. Check your tenant has the Right to Rent
Under the controversial new Right to Rent policy, which came into effect at the beginning of February. Landlords now have to check whether their tenants have the legal right to live in the UK. If you can't prove you've made the checks and are found to be letting to a tenant who is living in the UK illegally, you could face a fine of up to £3,000. However, if you use a letting agent to manage your property, there's a good chance these checks will be already included in your contract.
2. Get ready for the stamp duty changes on 1st April 2016
Anyone buying a property as a second home or buy-to-let investment, will face a significant stamp duty hike, with a 3% surcharge being added to each band.
The changes could add a significant amount to your bill.
Here’s a quick example; If you buy (complete on purchase) on a £200,000 property from April onwards, your stamp duty bill will be £7,500, an increase of £6,000 on the current charge of £1,500.
Drinks on are George Osborne then…
3. Protect your tenant's deposit
You are legally required to protect your tenant's deposit using one of the registered tenancy deposit schemes. It's free, and must be done within 30 days of receiving the deposit. If there's a dispute at the end of the tenancy, the scheme operator will act as an arbitrator to decide whether some or all of the deposit should be returned to the tenant.
4. 4. Work out how landlord tax relief changes will affect you
Landlords can currently deduct mortgage interest costs from their property income before calculating their tax bill. However, from 2017, the amount of tax relief allowed will be gradually reduced until 2020, when costs will only be deductible at the basic rate. This will leave higher-rate taxpayers worse off. From April this year, the rules on 'wear and tear allowance' are changing as well. Under the current rules, landlords with furnished properties can deduct 10% of the annual rent from their profits before paying tax on them, regardless of whether they've spent any money on furnishings. Under the new rules, landlords will only be able to deduct actual expenditure on furnishings.
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Use an old mirror to make it feel larger. If you have high stone walls that enclose your garden, consider fence cladding and a climbing plant to make a simple retreat for book reading in the summer.
Got a large garden? Cut the lawn and strim the edges, it makes a HUGE difference. Make your garden look easy to manage, it will be more appealing to a greater audience and will sell quicker.
- Mend broken fence panels and paint them to make your garden look like a place your buyer can spend their time.
- Low fences between you and the neighbours can be off putting; try using large plants in planters create greater privacy from your neighbours and make your buyers feel more at ease.
- Bring in colour; it's a great way to cheer up a dark day. Use bright pots too, then you can take them with you when you leave.
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We are a nation of decisive homebuyers.
We are quick to fall in love with a home and act fast to buy it, a survey by My Home Move, the UK’s leading provider of conveyancing services, has found.
More than three in five (61%) homeowners surveyed were able to buy the home they originally fell in love with.
A quarter (25%) were lucky enough for this to be the first home they viewed, highlighting importance of making a good first impression.
Make it easy for your potential buyers to imagine themselves living there. Do all those small jobs, all those 'reasons to say no' which could deter them and watch as buyers fall head over heels for a home that they can make their own.
Here's a checklist that you can use to impress your buyers and make that decision easier and quicker to ensure you get highest from the best buyers;
- Check windows open and close properly (also give your home a good airing)
- Check doors for squeaks and ease of opening
- Replace missing / broken tiles in kitchen and bathroom
- Have the roof checked for any missing tiles/potential problems
- Check guttering and have it cleaned out (especially in Autumn & Winter)
- Fix missing broken spindles on your staircase
- Complete architrave & skirting
- Finish that painting you have been putting off
- Check out cracks in plasterwork/walls, anything that is okay, fill and paint
- Hoover and clean all floors
Got a question? Call us on 020 8432 2800.
Until next time.
All the best,
Lyttons Estate Agents
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A side-by-side comparison of the demand for properties in Alexandra Park, Bounds Green, Crouch End, Highgate, East Finchley and Muswell Hill in October and November 2015.
Unsuprisingly, there is a decline in the number of searches in each area given that we are heading in to the winter slow-down.
Expect to see the number of searches jump in January as more people restart their property search and more properties come to the market.