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A legal way to avoid selling your house to pay for care costs

Avoid Care Home FeesThis week our MD, Simon Fisher, shares his experience of looking after a new kind of landlord:

With more of us living to a ripe old age, it’s more and more likely that we will have to plan for care home funding in later life. And if you have assets worth over £23,250, you are eligible to pay nursing home fees yourself. Many people fear losing their family home that they have worked for all their lives, but don’t see a viable alternative.

But could your home bring in a rental income sufficient to fund all or some of your care needs?

Becoming an ‘Accidental Landlord’

At The Better Letter, I look after a lot of ‘accidental landlords’ – not big time property investors (although we take good care of those too!), but people who have decided to rent out a property due to a change in circumstances.

Perhaps they have moved due to work and have been unable to sell their home, or a couple have moved in together and decided to keep one of the properties they own as an investment.

One lady I manage for approached me first in August of 1995. She’d just lost her mother, and wanted to let out her mum’s flat in Wolvercote for 12 months, just to give her time to organise probate and sort out the estate. Then she planned to sell.

She’s been so happy with our management, I’m still looking after her property now!

While professional property investors may have the time, knowledge and resources to manage properties themselves, many accidental landlords have neither the time nor the skills to look after a property. If your family live far away, there may be nobody who can keep an eye on matters for you.

With a professional letting agent looking after you and your property, you can rest assured that your let will be legally compliant and well-managed.

Letting in Oxfordshire

I’ve been letting and managing property in Oxfordshire for over 25 years now. I know each individual area better than most and I pride myself on running a business where we can take good care of each landlord and their specific needs. Lettings is a business that often has a bad reputation for squeezing money out of clients, then making excuses when repairs and maintenance are needed, or legal advice required.

And that’s why I rebranded our company as The Better Letter. It’s not just a name change – I want to improve the quality of service to landlords in Oxfordshire, and raise the bar for lettings agents everywhere.

If you’d like some advice on renting out your property, just call and we can have a cup of coffee. No sales team, no cold calls. Just talk directly to me and I can tell you about our services and the great deals we have for new clients.

I hope to speak to you soon.

Simon Fisher

 

Want more from The Better Letter?

Landlords >> for top tips, industry news and property information to help you manage your existing buy to let(s) and build your portfolio follow our Better Letter LinkedIn Company Page

Tenants >> Like our Facebook Page to be informed of new rentals, tenants news and views plus help with any tenancy queries.

Partner Opportunity >> If you are interested in becoming a Better Letter then head over to our website's Partner Opportunity page which will give you all the information you need.

As terms loosen up for first-time buyers, lenders tighten regs for property investors

Acquiring new Buy to Let properties? Secure your mortgage nowWith the approaching changes to the way income on rental properties is assessed for tax purposes, the FT Adviser is flagging up changes in the way some mortgage lenders assess lending as a sign that terms and conditions may change across the financial lending industry.

The Mortgage Works (a specialist arm of Nationwide) has recently raised the rental cover rate needed to secure a mortgage from 125% to 145%, and it will stop lending over 75% loan to value on BtL mortgage products. Other lenders are expected to follow suit.

So if you have decided to invest in Buy-to-Let – or expand your property portfolio – and you will need a mortgage to do so, now is the time to start planning.

Shop Around

If you don’t have the budget to pay commission to a specialist buy-to-let mortgage adviser, then sites like moneysupermarket.com and uSwitch enable you to compare the best deals currently on the market.

Target smaller properties

Although the new Stamp Duty rates apply to all properties other than your main residence now, smaller properties mean a smaller rate, so spreading your investment (and your risk) across several properties, rather than one large investment, can reduce your overall Stamp Duty exposure.

Factor in the Stamp Duty across the lifetime of your investment, and it soon drops into perspective – especially when you realise that you can claim the Duty against any Capital Gains if you decide to sell – reducing your tax exposure.

Club Together

With the recently announced changes to mortgage interest relief, some small investors are getting together to form limited companies. Private companies are not subject to the new taxes rates in the way individual investors are.

So there are still significant advantages to investing in property and/or becoming a private landlord – especially when you shop around for growth areas outside of London [hint: look at those regions about to be affected positively by the HS2 rail link].

If you’d like more free advice on investing in property in 2016, why not check out our article on Building a Property Portfolio: 5 Things Letting Agents Know that You Don’t?

Want more from The Better Letter?

Landlords >> for top tips, industry news and property information to help you manage your existing buy to let(s) and build your portfolio follow our Better Letter LinkedIn Company Page

Tenants >> Like our Facebook Page to be informed of new rentals, tenants news and views plus help with any tenancy queries.

Partner Opportunity >> If you are interested in becoming a Better Letter then head over to our website's Partner Opportunity page which will give you all the information you need.

Disclaimer: The Better Letter is not a professional mortgage broker or financial adviser. Please seek relevant professional advice when securing a mortgage.

Out-of-date, error filled or irrelevant contracts may as well not exist

DIY landlord ASTsWith more and more financial burdens being placed on buy-to-let landlords, some are tempted to cut corners by managing their own lets. One side effect has been a steep rise in inadequate Assured Shorthold Tenancy agreements (ASTs).

But what if your contract with your tenants is not worth the paper it’s written on?

Landlord Survey

A recent survey from Direct Line for Business reveals that as many as 58% of independent landlords are using contracts either adapted from old ASTs (often provided by previous letting agents), or from templates found online.

In not-entirely-unrelated news, 13% of all landlords have experienced disputes arising from ASTs in the last two years; 38% have never heard of the Government’s ‘How to Rent’ checklist – which legally must be supplied to all PRS tenants; and 9% have failed to register their tenants’ deposit in an approved scheme, as required by law.

What can DIY Landlords do?

Many landlords make excellent property managers, and will see the value in making sure your Tenancy Agreement is up-to-date, legally compliant and provides you with proper protection in the case that any tenant dispute should arise.

A good contract will protect both landlord and tenant, and make the obligations and responsibilities of both parties clear.

If you want an up-to-date and legally compliant Tenancy Agreement template drawn up by an accredited and experienced lettings agent, you can purchase one from our ‘DIY Landlord Services’ pages. We also offer good value access to a UK Government-backed tenancy deposit protection scheme.

 

Want more from The Better Letter?

Landlords >> for top tips, industry news and property information to help you manage your existing buy to let(s) and build your portfolio follow our Better Letter LinkedIn Company Page

Tenants >> Like our Facebook Page to be informed of new rentals, tenants news and views plus help with any tenancy queries.

Partner Opportunity >> If you are interested in becoming a Better Letter then head over to our website's Partner Opportunity page which will give you all the information you need.

In the arguments for and against, what are the facts for property investors?

what would Brexit mean for the UK housing market?There is nothing that spooks markets more than uncertainty. Our previous general elections are testament to that and, as the vote on whether Britain should leave the EU is imminent, we are already feeling the ripple of anxiety amongst our property elite.

How could a Brexit vote affect our property market?

There are many arguments for and against Brexit - with leading economists using mind boggling equations, the likes of which you may have only seen in the 1997 film Good Will Hunting to argue their case.

However, for the purposes of this blog I want to focus on one key impact Brexit will have on our construction labour market and what that will mean for our already beleaguered housing stock.

In 2007 the labour government set a target for 240,000 homes to be built every year up to 2016 to keep up with demand, but guess what... we are nowhere near that! There are many reasons as to why these targets were never achieved: slow,bureaucratic, planning departments, lack of available land, even running out of bricks in 2013/14.

However, a major factor that affected - and still affects - the speed at which houses could be built was the shortage of skilled labour.

Where are all the brickies?

Blair’s obsession with “going to Uni” has had a real impact on the supply of skilled tradesmen our construction firms need, to keep up with demand. The Mid noughties saw some 450,000 undergraduates enroll on university courses, regardless of quality. This was more than two-and-a-half times the 175,000 individuals who started an apprenticeship in the same period.

According to the Federation of Master Builders, 66% of small to medium sized construction firms have had to turn down work because they didn’t have the available staff to carry it out.

If Junes vote means we leave the EU, what will happen to the current supply of subcontractors employed in our construction industry from Eastern Europe? Around 50% of our subbies are Eastern European and are currently aiding our attempt at sustaining a fragile housing market.

But that’s not all: as speculation around Junes vote is rife, it seems foreign investment in our London housing market is already starting to wane.

As many investors want to sit tight to see how the markets adapt regardless of which way the vote goes, investment in new builds will almost definitely be hampered, resulting in another obstacle in the already restricted UK housing supply.

Want more from The Better Letter?

Landlords >> for top tips, industry news and property information to help you manage your existing buy to let(s) and build your portfolio follow our Better Letter Linkedin Company Page

Tenants >> Like our Facebook Page to be informed of new rentals, tenants news and views plus help with any tenancy queries.

Partner Opportunity >> If you are interested in becoming a Better Letter then head over to our website's Partner Opportunity page which will give you all the information you need.

What Buy to Let investors need to know now

Stamp Duty 2016: Essential Guide for Buy to Let LandlordsAs the dust settles on last week’s budget announcement, what are the implications of the 2016 budget for those active in, or interested in, property investment?

3 Key Facts:

  1. The stamp duty rise affects ALL residential landlords (including those with 15 properties or more).
  2. The new rules take effect from 1st April 2016 (not to be confused with the effective reduction in Stamp Duty on commercial properties, effective immediately).
  3. There are still options to recoup the cost of the extra stamp duty, for long term property investors…

For more information on how the details of the new Stamp Duty rules, and advice on the best options for property investment post-April 2016, download our free guide:  New Stamp Duty Rates on second homes post-Budget 2016 - The Essential Guide for Buy to Let Landlords.

Want more from The Better Letter?

Landlords >> for top tips, industry news and property information to help you manage your existing buy to let(s) and build your portfolio follow our Better Letter LinkedIn Company Page

Tenants >> Like our Facebook Page to be informed of new rentals, tenants news and views plus help with any tenancy queries.

Partner Opportunity >> If you are interested in becoming a Better Letter then head over to our website's Partner Opportunity page which will give you all the information you need.

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