Tuesday, 24 June 2014
With the recent unlocking of rules on how people can access their savings in retirement, could a new breed of ‘buy to let pensioners’ be ready to enter the local property market?
Nationwide property lettings specialist, ClearMove, is advising caution in the wake of the Chancellor’s Budget announcement that savers will be allowed to withdraw their entire pension fund from the age of 55 or over, rather than take the money slowly as an annual income, such as an annuity.
“Since the last Budget many financial commentators have speculated that following the new rules – due to come into effect from April 2015 – pension savers could draw down some or all* of their money to invest in options such as buy to let property,” says Russell Greatbatch who co owns the ClearMove office on Kings Road in Fleet, Hampshire.
“With recent surveys reporting that buy to let has outperformed all other mainstream investments over the past 18 years, this could be an extremely attractive option for anyone wanting to safeguard their capital and maximise their income in retirement.
“Whilst this may be true, we believe that anyone considering their first move into the sector should take expert advice.
“Buy to let continues to offer great opportunities, but potential investors must have a clear strategy, and it should never be considered as a ‘get rich quick’ scheme.”
* Subject to conditions
This year marks the 18th anniversary of the buy to let mortgage initiative launched by the Association of Residential Lettings Agents (ARLA). Tracker studies indicate that since its introduction, buy to let investment has provided an average return of 16.3 per cent – considerably more than most other asset classes.
Over a third of Britain’s 1.4 million private landlords already view their buy to let portfolio as the main component within their pension plan – with the relative ‘safety’ of bricks and mortar investment coupled with regular rental returns as income, making it an attractive investment choice.
Anna Huckson, Lettings Manager of ClearMove, comments: “The Chancellor’s recent pension reforms have ignited a great deal of interest in buy to let as a viable and attractive alternative to more traditional pension plans.
“Market demand for quality, well maintained, private rental property remains high and even before the recent Budget announcement our offices throughout the UK were experiencing a growing number of enquiries from people seeking advice and guidance on how to enter this sector for the first time.”
Some industry commentators are predicting returns of around 11 per cent per year over the next decade and a number of specialist, buy to let lenders have also started to reconsider current age restrictions to allow people up to age 70 to apply for long term buy to let mortgages – subject to them meeting certain criteria.
Rachel Jenkins, ClearMove Sales & Lettings Negotiator adds: “With all the excitement generated by the new reforms we would recommend that anyone looking to use pension savings to fund a buy to let investment should – as a first step - take professional financial advice and then sit down with property lettings experts, such as ClearMove, to map out a strategy for their future goals.
“It is important for first time investors to buy property at the right price, in the right location and to identify the type of accommodation that people will want to rent from them both now and in the future.
“With our local knowledge we can look in detail at potential property ‘yields’ - taking into account all outgoings, such as maintenance costs - and provide novice investors with a realistic expectation on returns.
“There are many legislative and other issues to take into account but the ClearMove local office are staffed by experienced, highly trained specialists who can advise on all aspects of property investment and management.
“We are happy to offer a free initial – no obligation – consultation to anyone wanting to learn more about how to become a successful property investor. And for those who do decide to invest their pension funds into property we can provide a full range of management and other services to ensure their new alternative pension investment is a trouble free one.”
To arrange a FREE and no obligation discussion with our Buy to Let specialist, please contact us on 01252 615263 or email us at: firstname.lastname@example.org
Tuesday, 13 May 2014
Thursday, 3 April 2014
“Just as ‘location’ is a key word in buying a property, ‘inventory’ is a key word in renting it,” says Russell Greatbatch, Director of Fleet's favourite residential lettings specialist, who has an office on Kings Road, Fleet.
Disagreements over the condition of property, at the end of a tenancy, is a major reason for disputes arising over how much of the tenant’s deposit should be returned, because landlords often deduct the cost of cleaning, replacing or repairing household items, furniture and furnishings that tenants say were like that when they moved in.
“A good quality inventory with clear photographs - agreed, signed and dated by both landlord and tenant – can overcome all argument about the condition of a property and its contents,” says Russell who runs the ClearMove office “What would otherwise be a matter of opinion becomes a matter of fact.”
“When you consider that, according to current Land Registry data, the average property price in Britain is now £225,000, it makes a lot of sense for landlords to protect their assets with a quality inventory. Professional lettings agents such as ClearMove are very experienced in carrying out a thorough and detailed inventory report – providing a solid assurance to landlords that their interests are well protected.”
There are other basic ways of making sure that relationships run smoothly.
When a tenancy starts, the landlord and tenant should each keep jointly signed tenancy agreements that set out terms, conditions, obligations and responsibilities on both sides. If a property in not fully managed and the landlord does not have an agent, they should both be present to go through the property, discuss any concerns and agree the inventory.
Tenants should also meet up with landlords or their agents for any periodic inspections during the tenancy – at least two or three times a year to ensure there are not any serious problems with the property.
Landlords should keep relevant invoices, bills, work records and household receipts as evidence of expenditure, whilst tenants should keep copies of household bills, since they should not be arranging for any works or alterations to a rented property without first consulting the landlord or agent.
And when the tenancy is over both parties should be present at the ‘check-out’ to discuss any problems and reach agreement over any deductions from the deposit.
“Accidents happen but so does normal wear and tear,” adds Russell “If both landlords and tenants stay realistic then many quarrels can be settled before there’s any need for the dispute resolution process.
“In fact there is another key factor in all this – it’s called ‘communication’. Done properly, it can save an awful lot of trouble.”
I don't need to declare every penny of my rent to the HMRC, do I ? You do and now you have no choice
HMRC recently declared their let property campaign (LPC) which aims to nudge landlords into confessing undeclared rental income. They have declared how they will get the information they need. They are fundamentally looking for errant landlords. We now know how those landlords will be found.
HMRC is writing to letting agents in the UK, asking them to provide details of the properties they have let in 2012/13, including the amount collected per property and the addresses of the let property and the landlord. The letting agent is given just 60 days to provide the information, or face a penalty of £300, and further penalties of £60 per day for additional delays. This will include landlords that use agents for tenant find services as well as managed services.
The agent also can't refuse to provide its customers' details on the grounds that such personal information is protected by Data Protection Act 1998, as the tax law overrules the Data Protection Act in these circumstances.
What does this mean to you?
Now is the time to ensure all your rental income is declared. Ensure every penny is on your annual tax return regardless of whether you have made a profit or not.
Don't forget, we can provide you with an annual statement to make doing your return quicker and easier. This will have all your income and all your expenses listed but don't forget to claim back the interest on any mortgage you have on the property as this of course will NOT be listed and is a legitimate expense (you cannot claim the capital repayment portion of your monthly mortgage payment).
For more information on the above or any other matter, please contact us 01252 615263 email@example.com
Google: +ClearMove UK Estate & Letting Agent, Fleet