Top tips to keep your home protected while you’re on holiday

With the school holidays imminent, many families are planning summer holidays leaving millions of homes vulnerable to burglary throughout July and August.

According to a recent report by the Office of National Statistics, over 16.2m Brits travelled overseas in July and August last year.

With sales of holidays abroad up seven per cent this year, this number is expected to increase suggesting that even more homes will be left vacant this summer. With opportunist burglars using social media to track the whereabouts of property owners, it is more important than ever for families to adopt a belt and braces approach to home security by re-considering the privacy settings of the whole family’s social media accounts and using smart home technology to compliment traditional security methods such as alarm systems and window locks.

To ensure family homes and neighbourhoods are kept safe this summer, Ring, the outdoor home security company, has compiled its top tips for protecting neighbourhoods through technology.  With Ilford, London, Leeds, Manchester and Cambridge being the most burgled cities, homeowners across the UK can spend more time enjoying a summer break to remember, rather than worrying about the safety of their most prized possessions.

Lock all doors and windows

It sounds basic, but a surprising number of burglaries take place because people have forgotten to lock all the doors and windows. Some people even leave a few windows open for air flow whilst they’re away. Leaving your doors and windows unlocked is an open invitation to burglars, so always double-check them before you leave and to be extra safe install a double lock on your front door.

Avoid hiding spare keys

Many homeowners still keep a spare set of keys somewhere in front of their house. This is a bad habit and a major security risk. Your key is never hidden as well as you think it is and experienced burglars will know all the common hiding places. If you have arranged for a neighbour or friend to check your post whilst you’re away, lending them a spare key is a far safer alternative.

Make it look like you are at home

Very few burglars have been known to strike when they think someone is at home. Many thieves are opportunists and if it looks like you’re on holiday they will be more inclined to try their luck. Making it look like you’re at home, is a simple and effective security measure you should take. Keep up appearances by opening your curtains, mowing the lawn before you leave and installing an outdoor light which automatically turns on for a couple of hours each evening. Better still, invest in an outdoor light with motion detectors, so that anyone who walks past triggers the light to come on.

Think twice about who can see your social media updates

Holiday makers who share updates about their upcoming trips months in advance and then check in and share snaps of their holidays put their homes at great risk of burglary. Criminals are increasingly using social media to check when homes are empty and the summer months can provide rich pickings.  Before you go on holiday think twice about who can see your family’s social media profiles and ensure that privacy settings are switched on.

Visible Security

Burglars will not try to break-in if they fear they will get caught. Savvy burglars will know of all the latest security devices, and they’ll avoid homes if they know that there are effective security solutions in place. Sometimes, even just a security sign can deter a burglar from breaking in, so get your devices set up, and make sure burglars know that your home is protected.

Smart Technology

Whilst traditional security systems are important, they cannot be relied upon to prevent crime from taking place. Unfortunately, most traditional security systems, such as alarms, are reactive solutions that will let you know when a burglary has occurred, but there is little you can do thereafter to stop it. Smartphone connected security devices, equipped with cameras and motion detectors, can send live video footage straight to you or your neighbours’ fingertips, meaning you can respond to and prevent suspicious activity before it happens.

10 ways for landlords to beat the tax man

A successful landlord, amongst other things, is a tax efficient landlord. So London based estate agent, Portico, asked the experts for 10 legitimate ways to reduce your tax bill and the results are below.

1. Expense, expense, expense

The first step in making your property tax efficient is knowing what expenses you can offset.

Seasoned landlord, Richard Blanco, has this to say:  “Religiously keep all of your receipts so that you can offset absolutely every expense against your profits. Talk to your accountant about travel costs, certain motoring expenses or types of vehicles that can be set against your profits.”

Here’s a list of some of the most common types of expenses:

• Water rates, council tax, gas and electricity
• Business and contents insurance
• Letting agents’ fees
• Legal fees for lets of a year or less, or for renewing a lease of less than 50 years
• Accountant’s fees
• Rents, ground rents and service charges
• Direct costs such as phone calls, stationery and advertising for new tenants
• The associated costs of running a home office

2. Reduce your stamp duty bill

Richard advises to “Avoid mega stamp duty by extending or expanding your current rental property(ies). Ultimately, the more expensive the property, the greater the theoretical savings.

Now is a good time to extend because permitted development rights are more generous than they have been in the past. However, be mindful of the change in the HMO definition due to come into force in October. From then on, any property with 5 or more sharers will need an HMO license, so if you extend your property and it becomes suitable for more sharers, check it’s up to mandatorily licensable HMO standards. Ask your council’s licensing department if you’re in doubt.

The golden rule for expanding an existing property is that the uplift in value should be more than the cost of the works. There will be a ceiling price for properties in some areas however, which means your property may not increase over a certain price even if you expand it – unless the area improves.  We’re in a tricky market at the moment so do your sums and expect conservative price growth.”

3.  Transfer your assets

Another way to potentially cut your tax bill is to use your spouse’s 0% and 20% tax bands.

Richard explains that “Generally no Capital Gains Tax is payable if you transfer assets to your spouse, plus if their earnings fall into a lower tax bracket you could pay less tax on the rental profits.”

Stamp duty land tax is not payable on the so long as the property is not mortgaged, and the husband or wife who is passing on the property doesn’t want any money for it.

4.  Save when you sell

If you are selling your rental property, make sure you claim all of the available relief.

Richard states: “If you’re a multi-property landlord, it’s often more tax efficient to sell one property in each tax year to take advantage of the 0% CGT band up to £11,300. Effectively this means you can make gains of up to £11,300 in a given tax year without any tax being due.”

5. Landlord Ltd?

Some landlords find it is more tax efficient to manage their properties through a limited company which effectively acts as a letting agent.  The Company could employ the landlord, relative or member of staff to manage the properties.  Richard advises you to talk to your accountant or tax adviser about this before proceeding.

6. Restructure your portfolio

You can also set up an LLP and Ltd company as a way of allowing all finance costs to be set against profits. This is complex and expensive to set up but it might be a positive way forward for landlords with larger portfolios.

Always be wary of spending a lot of money restructuring your portfolio around tax legislation. The government could change the rules in the next budget and you might then kick yourself for spending money on an expensive restructure.

7. Buy property through a company

If you’re thinking of buying property, setting up a limited company is more tax efficient in the sense that all finance costs can be set against profits. Richard urges landlords to “Beware of the extra cost of commercial mortgages.  This could offset any savings you make in tax.”

If you’re considering setting up as a company to save tax, make sure you read and digest our landlord’s guide to incorporation.

8. Remortgage!

Landlord and property expert Mark Lawrinson says that “A great way of cutting your interest costs is by re-mortgaging. Buy-to-let mortgage interest rates have fallen significantly in recent years, so deals currently on the market may well be substantially better than on products arranged a few years ago.”

9. Get your rental property revalued

With large increases in property prices in London, another tip is to get your rental property re-valued. This will make your lender recalculate your loan to value, and a lower loan to value means a better interest rate and a larger choice of lenders.

10. Fill the voids

If your buy-to-let property is empty for any period of time, remember that expenses such as utilities or council tax incurred can be claimed as an expense.

But more importantly, rather than losing money while your property sits empty, why not Airbnb the property until your find a long-term tenant?

Hosts typically earn up to 50% more on a short-term let than a long term-let, and we offer a premium Airbnb Management service in London so we can take care of the whole process. All you need to do is let us know when the property is available and we’ll organise guest bookings, arrange for 24 hour access, take care of cleaning and organising hotel standard towels and linen, and even kit it out with furniture if needs be.

House prices gain 5.6% according to UK HPI

The latest data and analysis from ONS and Land Registry has revealed that average house prices in the UK increased by 5.6% in the year to April, up from 4.5% in the year to March.

According to the UK HPI, the monthly price change for a property in the UK was recorded at 1.6% with the average UK house price now standing at £220,000.

The figures also revealed that the East of England showed the highest annual growth, with prices increasing by 8.1% in the year to April 2017. This was followed by the South West at 6.8%. The lowest annual growth was in the North East, where prices increased by 0.6% over the year.

However while up against March 2017, the Index notes that there has been a “general slowdown in the annual growth rate since mid-2016”.

Bank of Mum and Dad risking IHT gift trap

The latest research from Key Retirement has revealed that 47% of parents and grandparents do not understand the tax rules on gifting, and nearly three out of four (73%) say the rules are very complicated.

Key’s research found 38% are not aware their estate might be liable for inheritance tax on gifts to family members.

The research, which focusses on the gifting behaviour and plans to gift from the Bank of Mum and Dad, shows 58% want to be able to help children and grandchildren on to the property ladder, which with average house prices at £217,0002 will mean paying out more than £40,000 for a 20% deposit. Around 18% of parents and grandparents would want to help pay off debts and student loans, while 13% would want to fund a wedding for children or grandchildren.

New inheritance tax rules introduced last month mean single homeowners have new higher IHT allowances of £425,000, and couples allowances of £850,000, rising in stages to £1 million for couples by 2020/21. However, the higher allowances only apply to family homes and only after death. The allowance otherwise is £325,000 (£750,000 for couples). Any gifts over the value of £3,000 need to be given more than seven years before death or they are potentially liable to 40% inheritance tax, if the threshold has is exceeded. The good news is that for the majority of people gifts should be exempt where wealth is predominantly in the home. However, for those whom this would not be the case there should be greater incentive to gift.

Key’s Equity Release Market Monitor shows equity release customers are cashing in an average £73,610 tax-free from property wealth, with around 22% of customers using some or all of the cash to help families.

Key believes encouraging intergenerational gifting for major purchases through tax breaks could play a major role in tackling intergenerational wealth issues by helping families get on the property ladder or paying off student loan debt. The research revealed that 37% of those questioned would be prepared to gift a ‘living inheritance’ were there tax incentives in doing so.

Dean Mirfin, technical director at Key Retirement, said: “At a time when the financial squeeze on younger generations is getting worse it makes sense that grandparents and parents want to help their family now rather than waiting till their death.

But there is real nervousness and confusion when it comes to the awareness around the rules of financial gifting.

We would support tax breaks on gifts and early inheritance in those instances where the incentives can be used for major intergenerational gifts, which have a greater perceived societal benefit. From rising student loans to property prices younger generations need a helping hand more than ever. Early inheritance can have life changing consequences for some families and our study shows that equity release could be a major source for these gifts.”

Nationwide claims house price “fall” for third month in a row and why it’s baloney

You may have woken up this morning to the news that the latest data and analysis from Nationwide has revealed that, for the first time since 2009, UK house prices have “fallen” for a third consecutive month.

The data for May showed that annual house price growth dipped to 2.1%, the weakest in almost four years, providing “further evidence that housing market is losing momentum”.

Well, that’s not a price fall, it’s a slow down in growth which is a completely different matter and a proper grown up institution like the Nationwide should know better than to scaremonger and misrepresent the facts.

The Nationwide supposedly analysed house price movements in the months around previous elections, and also last year’s EU referendum, and found that past general elections do not appear to have generated volatility in house prices or resulted in a significant change in house price trends or mortgage approvals.

Well, the details of that analysis are a mystery, but ask any estate agent and they will tell you that every election (and the referendum) leads to a hiatus in the market as buyers and sellers await the outcome of the inevitable uncertainty that surrounds an election process.

Michael Foundly

 

Biggest-ever study reveals why most vendors choose traditional agents

A study described as the biggest of its type seeks to explain why vendors choose – or avoid – online agents.

The Home Moving Trends survey undertaken by Property Academy surveyed 14,530 vendors.

Those sellers who chose to use a traditional agent were asked whether they had considered an online alternative. Precisely 30 per cent considered using an onliner but eventually decided against; the other 70 per cent said they didn’t even consider using an onliner.

When asked for the primary reason why they went on to choose a traditional agent, 38 per cent said because the local knowledge was important; 35 per cent because they could have face-to-face meetings; 17 per cent because of the importance of a local presence in the shape of a High Street office; and 10 per cent because it was simply more convenient.

Of those who went on to use an online operator, 74 per cent were persuaded primarily by cheaper fees; 11 per cent had a personal recommendation; nine per cent went online because those agents were “more innovative” and six per cent chose the option because online agencies were easier to deal with.

Around one third of sellers did not visit their selling agent’s office at any point in the process.

In other aspects of the survey, 85 per cent of respondents said Brexit “has not impacted my decision to move” although two per cent decided not to move because of the decision and seven per cent felt property prices had decreased in their area as a result of the referendum vote.

Movers are also showing increasing confidence in new technologies such as Virtual Reality – 60 per cent said they would consider viewing online prior to a physical viewing in the future.

KeyAGENT has produced an infographic of the results below.

Biggest-ever study reveals why most vendors choose traditional agents

Biggest-ever study reveals why most vendors choose traditional agents

Biggest-ever study reveals why most vendors choose traditional agents

Asking prices up for fifth month in a row

Asking prices of homes coming to the market have now been rising for five consecutive months says Rightmove.

Asking prices rose 2.0 per cent, equivalent to £3,626, to reach a national average of £317,281 according to the portal.

It says pre-election periods typically cause a pause in activity, but this price growth and strong year-to-date numbers of sales agreed indicate that many are undeterred. The strongest sector for price growth appears to be typical family homes.

The number of sales agreed by estate agents remains robust, being 2,0 per cent higher in the year to date than the same period in the previous election year of 2015 – although they are in turn some 2.0 per cent down on the same period last year, when the rush of buy to let investors ahead of the stamp duty surcharge distorted the pattern.

“It remains to be seen how much momentum may drop away in the second half of the year with stretched affordability a problem for potential buyers” warns Miles Shipside, Rightmove director and housing market analyst.

Rightmove research shows that home-owners with children under 11 years old are twice as likely as the average person to be moving home.

Their typical target property types are three bedroom homes and four bedrooms excluding detached property. The price of property coming to market in this sector has seen the biggest increase over the last twelve months, up by an average of 5.4 per cent to £270,953.

“What seems to be happening is that moving pressures are understandably taking priority over electioneering and Brexit worries. For many in this group, it seems that moving is definitely on their manifesto” adds Shipside.

Is BTL still a good move?

With a general election looming and the housing market a hot topic commentators differ in their opinions as to the direction in which property prices will go in the coming years.

As always with the property market it is, to an extent, something of a guessing game as the direction of travel depends on a plethora of factors.

However with some predictors citing 50% of the population being in rented accommodation by 2050 and with the average age of a first time buyer in the UK now 35, as opposed to 24 a decade ago, the buy-to-let option still appeals to many investors.

Becoming a landlord can be a rewarding experience and, if done correctly, provide a steady and sustainable return as an income investment, especially compared to lower savings rates and stock market swings.

Investors are snapping up property in the hope that it will not only return a reliable yield but also a benefit from capital growth given enough time. Mortgage rates at record lows are helping buy-to-let investors make deals stack up.

But beware low rates. One day they must rise and you need to know your investment can stand that stress test, a criteria sought by many lenders recently.

There is also a tax rise coming, as buy-to-let mortgage interest relief is axed and replaced with a 20 per cent tax credit. Additionally, from April 2016 landlords now have to pay an extra 3% stamp duty on property purchases.

Recent history provides an important lesson in how returns can be hit. Many buy-to-let investors who bought in the boom years before 2007 struggled as mortgage rates rose. A sizeable number were thrown a lifeline when the base rate was slashed to 0.5 per cent. Rates stuck there until this summer and then were cut again after Brexit, but they will rise again.

Even considering the recent tax changes and potential for buy-to-let mortgage costs to rise, there are many positives. We are becoming a nation who sees renting as a flexible lifestyle choice and is far more sociably acceptable. With greater demand from tenants, rents that should rise with inflation and the long horizon for interest rate rises, mean many investors are still tempted by buy-to-let.

If you are planning on investing, or just want to know more, here at HM Lettings we will guide you through essential things to consider and help avoid the pitfalls for a successful buy-to-let investment.

Like any investment, buy-to-let comes with no guarantees, but for those who have more faith in bricks and mortar than stocks and shares the opportunities are out there.”

Average house price growth slowing, official figures show

Official figures from the latest UK House Price Index show that average house prices fell by 0.6% between February and March.

The data for March also shows that annual house price growth slowed to 4.1%, down from 5.8% the previous month.

The official index calculates that the average UK house price in March was £215,847.

There is again less than promising news for the capital, with the figures showing that average prices dropped by 1.5% between February and March.

London’s annual house price growth is now measured at 1.5%, well below the UK average. Despite this, average property prices in the city are still way out ahead at £471,742.

According to the index, prices in Wales have been performing strongly – rising by 1.4% between February and March, equating to annual growth of 4.3%.

The UK House Price Index replaced the Office for National Statistics and Land Registry indices last summer. It is published some way behind other reports like Rightmove’s – which monitors asking prices – due to the fact that it takes into account actual sales.

“While it may look as though house price growth is beginning to slow down, affordability remains a key concern for many aspiring homeowners struggling to get a foot on the ladder,” says John Goodall, chief executive and co-founder of Landbay.

“Furthermore, rising inflation and recent warnings from the Bank of England that a year of falling wages lies ahead means we’re unlikely to see any immediate relief.”

Jeremy Duncombe, director of Legal & General Mortgage Club, says: “With less than a month until the General Election, it is clear that housing needs to be a priority in all of the party’s manifestos.”

“The current government has made some admirable steps forward in tackling the serious shortage of affordable homes across the UK through the Housing White Paper, but there is still a long way to go.”

Property cash purchases at new high

New research from IMLA has found that a record amount of cash was injected into residential property purchases in 2016.

According to IMLA, the total value of residential house purchases in the UK reached £261bn in 2016, with £152bn provided by mortgage finance and £109bn made up of cash funds including the proceeds of existing property sales.

Cash funds have risen by 12% from 2015 and 57% since 2013, far outpacing the growth of mortgage lending over the same periods. Growth of £6.8bn in house purchase mortgage lending from 2015 to 2016 was overshadowed by the extra £11.8bn in cash contributions. As a result, cash provided 41.8% of funds for residential house purchases.

Three-quarters of the annual growth in house purchase lending came from first-time buyers in 2016. However, the growing influence of cash in the house purchase market has potentially negative implications for aspiring homeowners and home-movers.

Analysis from the CML suggests that outright cash transactions (with no mortgage finance involved) continue to make up just over a third of all transactions.

Peter Williams, Executive Director of IMLA, commented: “The shift towards cash is partly a consequence of trying to manage housing demand by restricting mortgage supply, with Financial Policy Committee actions in 2014 quickly layered on top of the Mortgage Market Review affordability rules. With the market having cooled and interest rate expectations shifted since then, there is a legitimate case for asking whether current restrictions on lending are still appropriate or have become over-zealous.

In the meantime, rising house prices and stagnant incomes mean that access to wealth as well as mortgage finance will increasingly separate the ‘haves’ from the ‘have nots’ in the property market if the importance of cash continues to grow. The recent Housing White Paper was a missed opportunity to take strong action on housing supply, and we must hope that the upcoming election manifestos will be used as an opportunity to put that right.”