RICS publishes the resulys of its residential lettings survey for October (3rd quarter) 2009.
Surveyors expect to see rent rises in the New Year as the number of rental properties coming onto the market fell for the first time since January 2008, says the latest RICS Lettings Survey.
The recent pick up in the housing market seems to have led to drop off in the number of rental properties, particularly houses, being made available and as a result surveyor optimism has increased for the first time since July 2008. 22 percent more surveyors expect rents to rise rather than fall in the next three months.
The drop off in supply is the main driver for the more positive sentiment, with new instructions reaching their lowest levels in the surveys history (1998). A net balance of 11 percent of surveyors are seeing the number of new instructions coming onto the market falling rather than rising.
This is in stark contrast to levels seen late last year when the housing market was still suffering from falling prices and many would-be sellers were turning to the lettings market when their houses failed to sell.
Currently the reading for past rents, although still negative, is the least so since July 2008 with only 4 percent of Chartered Surveyors still reporting falling rather than rising rents, indicating that the downward pressure on rents is already starting to ease. Significantly London and the North are already seeing the majority of surveyors reporting price rises over the past three months.
Demand for rental property is still rising as 16 percent more surveyors saw activity over the past three months pick up; in particular demand for houses was particularly strong with 22 percent more surveyors reporting rising rather than falling numbers of people looking to rent. Tenant demand was strongest in London, but increased in most other parts of the country bar the east.
John Tonkiss, chief operating officer of UNITE Group, said today that we could see 'flatline growth' next year as the 'real recession' impacts on the UK populous.
Sir Alex Ferguson, manager of Manchester United, stopped to chat with Property Week today about his views on the property market and and the progress of his football team.
Industry heavyweights have added their support to the 1808 Coalition, set up by the National Association of Estate Agents (NAEA) and the Association of Residential Lettings Agents (ARLA) to campaign for the Government to modernise Stamp Duty.
1808 Coalition partners are:
• Association of Mortgage Intermediaries (AMI)
• Association of Residential Lettings Agents (ARLA)
• Building Societies Association (BSA)
• Council of Mortgage Lenders (CML)
• Home Builders Federation (HBF)
• National Association of Estate Agents (NAEA)
• National Landlords Association (NLA)
Peter Bolton-King, Chief Executive of the NAEA, said: “The Coalition believes that Stamp Duty is an anachronistic tax which, in its current form, is preventing a recovery in the housing sector – it limits market flexibility, creates regional inequality and its slab structure unfairly distorts the housing market. With the Pre Budget Report due soon, now is the time for the Government to take action.”
The current Stamp Duty “holiday” for properties lower than £175.000 is due to expire at the start of 2010 but in a recent survey by the NAEA, 91 per cent of estate agents surveyed felt that it should be extended. 86 per cent of those surveyed felt that the tax is unfair.
Ian Potter, Operations Manager of ARLA said: “Not only does Stamp Duty prevent those aspiring to own a home from doing so, it also impacts the whole property chain. For ARLA members, this means having to pay Stamp Duty on the bulk price of a portfolio, when individual buy-to-let investors pay a lower rate on the single unit price.”
Robert Sinclair, Director of the AMI, said: “It is rare that the breadth of our industry comes together with such consensus on an issue. But the current Stamp Duty regime is distorting the market to such an extent that we feel compelled to speak out. The Association of Mortgage Intermediaries is fully committed to supporting this industry campaign to reform the regime. We implore the Government to not only listen but, to act in support of our request for change to this damaging tax.”
John Stewart, HBF’s Director of Economic Affairs, said: “It is imperative that the first signs of market stabilisation that have emerged in recent months, and which have allowed home builders to begin tentatively opening new sites and expanding output and employment, are nurtured. The Government’s stimulus measures for housing, including the raised stamp duty threshold, have played a significant part in this stabilisation and it is vital that they are not removed at this still fragile stage, either in total or in part.”
Adrian Coles, Director General, BSA, said: "The current Stamp Duty system in the UK is archaic and in desperate need of reform and modernisation. A fairer and transparent system is needed that doesn't discriminate against young and first time home buyers, and promotes an effective housing market."
Michael Coogan, Director General, CML, said: “We urge the government to announce a comprehensive and long-overdue review of Stamp Duty. Reform is needed of a tax that distorts the housing market.”
David Salusbury, Chairman, NLA, said: “Stamp Duty Land Tax is a pernicious tax which has failed to keep pace with house price appreciation. It creates an unbalanced housing market and discourages investment in housing. Reform is needed now.”
Anyone wishing to register comments on the campaign, or on Stamp Duty, should visit: http://www.nfopp.co.uk/1808
For the original article of the above please visit www.arla.co.uk
New website launched !!
We are pleased to announce the launch of our new website!
Our new website has been designed to make your access easier, with a new menu structure to help you find the services you need, and functions to help accessibility.
In addition the new website now provides the facility for landlords to log into the new site to manage their property adverts and use a number of online facilities.
Please do not hesitate to contact us with any questions regarding how to use the new site.
Landlordlet.com would like to thank Mitchel Annable of PropertyLab for all his hard work in helping us to produce our new site.
Are you a tenant in England or Wales UK? Did you pay a deposit to your landlord? If it was paid after 7 April 2007 - did you know that your landlord should have protected this in a government authorised tenancy deposit protection scheme (TDPS)?
How did this come about?
Tenancy deposit protection was set up after years of complaints by tenants organisations that many landlords were failing to return deposits and claiming expenses without justification, relying on tenants reluctance to take them to court. For example back in 1998 the Citizens Advice Bureau published 'Unsafe Deposit' a report calling for a statutory tenancy deposit scheme along the lines of an existing scheme run in Australia.
Does it apply to me?
The regulations became enforceable on 7th April 2007. If you paid a deposit for an assured shorthold tenancy (AST) after that date, then yes! If you paid a deposit before then, but your landlord has given you a new tenancy after 7 April 2007, then yes again! However the regulations only apply to deposits paid by tenants with ASTs. They do not apply to 'common law' tenancies - these are normally where the tenant is a limited company, where the rent is over £25,000 pa, or if the landlord lives in the same building as the tenant (unless he lives in a separate flat in a purpose built block of flats). So for instance if you are lodger living in your landlords home, he does not have to protect your deposit.
What must landlords do now then?
All deposits must be protected with one of the following three schemes:
The Deposit Protection Service - depositprotection.com
My Deposits - mydeposits.co.uk
The Dispute Service - thedisputeservice.co.uk
This must be done within 14 days of you paying the deposit to the landlord or his agent. The landlord or agent must then, again within this 14 day period, serve on you a notice giving information about which scheme your deposit is protected with, and other prescribed information. All three schemes have excellent web-sites where you can find out more about their service.
What are the penalities for landlords who don't comply?
If a deposit is not protected, then any section 21 possession notice served on you will be invalid, and your landlrod will not be able to evict you (at least not under section 21 - he can still evict you for rent arears). Also you go can to court and ask for the return of your deposit, plus a 'fine' of three times the deposit amount.
So, how does the TDPS benefit me?
If your deposit is covered under one of the schemes, you are guaranteed to get it back, provided you leave the property in an acceaptable condition with no rent arrears. For example if your landlord 'does a runner' with your deposit money, then the scheme adminstrators will have to pay it you (although it may take some time and there will be quite a bit of form filling).
Also, if after you leave, your landlord wants to make a deduction which you do not agree with, you can go to an independent arbitrator. This is completely free of charge, and if you win, you should be paid your money within 10 days.
What do I do if my landlord hasn't protected my deposit?
First of all, contact all the schemes and ask them to check whether your deposit is protected with them. If they all say no, then you can go to the county court and claim your money back, plus the fine of three times the deposit money.
You can read more about tenancy deposit protection, and stories from tenants who have successfully claimed their deposit back, on my blog http://landlordlaw.blogspot.com. Find the 'labels' in the right hand margin and click the link for tenancy deposits.
Tessa Sheppeson is a solicitor, author, and editor of http://www.landlordlaw.co.uk, an online legal information service for residential landlords and tenants.
It is not always realised that there are different types of tenancy. This generally means that you need to use the correct type of tenancy agreement form for the type of tenancy involved This article will help you select the right type of tenancy agreement for your situation. First we will look at the type of tenancies which exist, as this will affect the type of tenancy agreement you will need to use. We then look at rentals of rooms in a shared house and how this affects things. We then go on to consider various other practical issues such as amending tenancy agreement terms and how to complete your tenancy agreement form. Note that this article relates only to tenancy agreements and the law in England and Wales UK.
What sort of tenancy do you have?
Most tenancies created today are Assured Shorthold Tenancies (ASTs) but not always. For example, if
You are renting to a limited company
You live in the same building (unless you live in a separate flat in a purpose built block of flats) or,
The rent will be over £25K per annum
the tenancy will be a 'common law' tenancy, and not an AST. If you use a tenancy agreement document designed for an AST, it is not the end of the world - it will not mean that your tenant will not have a proper tenancy or be entitled to live in the property. However some parts of the agreement, document, the parts specific to ASTs, will be invalid, and this is never a good idea.
You should therefore try to find a form of agreement which is designed for your specific type of tenancy. Common law tenancy agreements are not as easy to find as AST agreement forms, but they are available if you look for them
Is your tenant renting the whole property or just a room?
Where tenants are sharing, most often they will all sign the same tenancy agreement document. This is the best way to do things if the tenants are all friends. However this may not be the best solution if you are letting to people who do not know each other and who may want to leave the property at different times. Here it may be better to simply give a tenancy agreement for their individual room, and include with this shared use of the rest of the property. If you decide to do this, you should use a tenancy agreement document which reflects this (they are often described as an agreement for a room in a shared house where the landlord is not resident). This type of agreement is often used for houses in multiple occupation (HMOs). Tenancy agreements for rooms in a shared house are available but you may need to hunt for them.
Is there anything unusual about the property or the letting?
Most tenancy agreements include standard clauses. Some are better than others, but all of them should include things like clauses prohibiting damage to the property, subletting, inappropriate use of the property etc. However your tenancy may have something unusual. For example you may want to keep one of the rooms out of the letting so you can use it to store your own possessions. There may be a right of way over part of the garden, or you may want to allow access for a gardener. In this case the standard tenancy agreement forms in the shops may not be suitable for you. You could try changing it yourself, but this is generally inadvisable. Drafting tenancy agreements is a skilled task, and you may find that instead of protecting yourself you have, by the way you have written the clause, actually made it invalid, leaving you without any protection at all. The best thing to do is to instruct a specialist solicitor to adapt an agreement for your use. This will cost you more that just using a standard agreement, but at least the agreement will do what you want (assuming this is something permitted by law).
Other tips and traps
When buying a tenancy agreement, form make sure it is fairly recent. Tenancy law does not stay still, and clauses which were perfectly valid 10 years ago, may now be invalid, for example under the Unfair Terms in Consumer Contracts Regulations. Don't try to 'bolster up' what think are weak clauses to make them more favourable to you. The clauses will have been drafted that way for a reason. If you change them you will probably invalidate them (e.g. under the unfair terms regulations). For example don't change clauses prohibiting pets, by taking out any wording providing for the tenant to be entitled to request leave to have a pet, and saying that the request will not be unreasonably withheld. This wording is essential. If you can find one, try to use a 'plain English' style tenancy agreement. This will be much easier for both you and your tenant to understand, and remember - if your tenant can understand the agreement, he is far more likely to read it and do what it says!
Some practical guidance
Be careful when completing your tenancy agreement. Remember it is a legal document. Make sure you get the names of the parties right and the address of the property. If you go to court to evict the tenant, you do not want the bailiff going to the property next door! You need two copies of the tenancy agreement. Your tenant should have one signed by you and you should have one signed by your tenant, however it is common practice for both landlords and tenants to sign both. If the agreement is signed before the date the tenant is due to go in, it should be signed as a deed - this means that the signatures should be witnessed by someone independent.
Finally
Once the agreement is signed, make sure you keep your copy of the tenancy agreement safe. If you ever need to take your tenant to court, you will need it!
Tessa Sheppeson is a solicitor, author, and editor of http://www.landlordlaw.co.uk, an online legal information service for residential landlords and tenants.
If you let out residential property you will have to keep records of rent received and your expenses to work out the profit you'll pay tax on. You work out your taxable profit by taking your expenses and certain allowances away from your rental income.
What financial records do you need to keep?
You'll need to keep the same sorts of records whatever type of property letting business you have - residential or holiday letting, in the UK or overseas. They should include details of your:
rental income
allowable expenses
'capital' costs
To back up your records keep rent books, receipts, invoices and bank statements.
Rental income
You'll need to keep a note of:
the rent you charge and receive
any services charged separately - for example meals, laundry service, etc
the dates you rent out each property
Allowable expenses
Your records should include details of all your costs of letting or managing your property. Allowable expenses reduce your taxable profit. They include all or part of these costs:
letting agent's, accountant's and legal fees
buildings and contents insurance - only part if you just let part of the property
property loan interest
maintenance and repairs - not improvements
utility bills, like gas, water, electricity
rent, ground rent and service charges
Council Tax
advertising
other direct costs of letting the property, like phone calls
Make sure that you can separate your business from your personal expenses.
'Capital' costs
You can reduce your taxable profit by claiming different types of allowances for the cost of furniture and equipment you provide with the property.
You may also be able to deduct certain 'capital' allowances for the cost of equipment relating more generally to your lettings business.
You'll need to log how much all of these things cost and when you bought them.
To back up your records keep rent books, receipts, invoices and bank statements. Also make sure that you can separate your business from your personal expenses.
If your total income from UK property is under £15,000 a year before expenses, you can group the expenses as a single total on your tax return. (You may also be able to complete the short tax return.) If it's £15,000 or more, you'll need to show them separately and complete the full return.
Your Tax Office can ask to see your records at any time. So hold onto the detailed information even if your income's less than £15,000.
If you're employed and your taxable income from property is less than £2,500, your Pay As You Earn (PAYE) tax code can be adjusted to collect the tax on your property income. Your Tax Office will send you form P810 to report your income each year.
However, you'll still need to keep records, to enable you to fill in form P810. Your Tax Office can also ask to see your records to check your figures.
If your income from rent is £2,500 or more you'll need to complete a tax return.
How long do you need to keep the records?
You'll need to keep your records for six years after the tax year to which they apply - whether you complete a tax return or not.
If you get rent under the Rent a Room scheme
If you use the Rent a Room scheme you don't have to keep a record of your expenses - you can't claim these under the scheme. But if your rent goes over the limit (£4,250) you can opt to pay tax on all of the rent after taking off your expenses instead. So it may be worth keeping a record of your income and expenses anyway. You can read more about opting in or out of the scheme in our main article.
Records relating to the purchase or sale of a let property
If you sell or dispose of a property that’s not your main home and its value has increased since you acquired it, you may have to pay Capital Gains Tax (CGT). Some of your property costs can be deducted when working out your gain, so you'll need a record of:
when you bought or acquired it
when you sold or disposed of it
the purchase and sale price
any buying and selling costs, like Stamp Duty and legal fees
improvement costs and dates
You may qualify for other reliefs or allowances depending on how long you've owned the property and if it was ever your main home.
If you have a single lodger, this will not affect your entitlement to relief when you sell your main home but they must live as part of your family. If you have more than one lodger, you will be treated as letting part of your home and might have to pay some CGT.
If the property was used for a UK furnished holiday letting business there are special CGT reliefs.