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How to unlock the buy-to-let maze

A new six-part online programme goes live this Sunday, to help current and future landlords purchase and run a successful buy to let property.

The ‘Buy to Let Show’ has been devised by leading property expert Kate Faulkner, who runs, one of the UK’s education and information residential property website, and delivered in partnership with Direct Line for Business. The series includes six 25-minute programmes and features case studies and vital information from industry experts, with the first programme being aired on Sunday, 7th May, at 11am.

There are now more than two million landlords in the UK, plus many people considering property as an investment so, for maximum coverage, the show will be broadcast online via Direct Line for Business and be promoted via other sites such as Landlordzone, Property Reporter, Property Tribes, Nethouseprices and, of course,

With tax changes potentially hitting landlords hard, an ever-increasing list of rules and regulations and the introduction of tougher fines for those who fail to follow them, the Buy to Let Show couldn’t come at a better time.

Christina Dimitrov, Business Manager at Direct Line for Business, said: “Landlords have a tough time trying to keep up with latest trends in bu to let investment and also ensuring they are compliant with the law. We have supported the new Buy to Let Show to help landlords understand how to maximise their buy to let investment returns and deliver legally and safely let properties to their tenants.”

The six episodes of The Buy to Let Show cover the key areas of purchasing, letting and, importantly, exiting a property investment. The episode titles are:

• Is Buy to Let a Wise Investment?

• Financing and Insuring a Buy to Let

• Choosing a Buy to Let

• Letting a Rental Property Legally and Safely

• Dealing with Tenancy Problems During a Buy to Let

• How to Plan an Exit from Buy to Let.

Each show is split into three sections, with an introduction from show presenter Kate Faulkner on the main topic, landlord case studies and expert interviews followed by a panel discussion.

Kate said: “In my experience, buy to let is not often explained to people properly and, as a result, although some are successful, others are failing and not making any money at all – or, worse, have even lost their own home.

There are now more than 160 laws which landlords need to abide by; many are health and safety regulations which most existing landlords don’t understand. It’s clear that help is needed so the Buy to Let Show will be an invaluable resource for existing landlords and anyone thinking that investing in property is how they want to make their money or save for a pension in the future.”

Kate has spent years learning how people carry out property projects and knows the key mistakes they make. She currently helps people via through property price and rental reports, easy-to-read checklists and eBooks. Now, the Buy to Let Show provides the ultimate education and information opportunity, thanks to the support from Direct Line for Business.

You can watch the show from Sunday, 7th May, at 11am, on, Landlordzone, PropertyTribes, Nethouseprices, Property Reporter and,

Landlords warned over bad mortgage brokers

Buy-to-let landlords may not be getting the best mortgage deal, or they could find themselves locked into mortgages with high standard variable rates, as a result of mortgage deals set up by bad brokers.

According to The Mortgage Broker Ltd,  some landlords are missing out on good mortgage deals because they are working with unprofessional brokers, who are lazy and only use lenders that they are familiar with, rather than searching for the best deal for the landlord.

In the worst case scenario, bad brokers can be outright fraudulent – lying about income, or other aspects relating to the applicant.

Darren Pescod, MD of The Mortgage Broker Ltd comments: “We have seen evidence of mortgage brokers securing mortgages for investment properties, which are then inhabited by family members.  Or they have arranged a mortgage for an investment property, that is either a multi-let, Airbnb or student accommodation, without informing the lender.

This is highly unprofessional. If a lender finds out, it could withdraw the mortgage and in a worst case scenario, the client could be slapped with mortgage fraud, which will severely affect their ability to borrow funds, or obtain mortgages in the future.

Some landlords don’t understand the severity of a little white lie to the lender, or understand the implications of not divulging their full intentions with the property, or their personal situation. Lenders are more geared up now to do post application checks and are on the lookout for scheme abuse and mortgage fraud.

If landlords are working with bad brokers they don’t need to feel trapped.  They can often make changes to their mortgage arrangements with the help of a reputable, experienced and professional broker.

There are some great buy-to-let mortgage deals around at the moment, such as lenders still willing to offer a mortgage at 125% of the pay rate, rather than the recent increase in rental calculations, made my most lenders.”

Landlord tax changes: Are you about to be pushed up a tax bracket?

The most significant change to the way that landlords with borrowings are being taxed is introduced today. Here’s what you need to know.

Who is affected?

The changes will affect all landlords with finance costs associated with letting their properties, although in this blog we refer primarily to mortgage interest costs, because buy-to-let borrowing is the most prevalent source of finance in the sector.

What’s changing?

You’ve probably heard by now, but when calculating your taxable profit your ability to deduct finance costs from your rental income/ turnover is being phased out over the next 4 years. Instead you will be able to claim just 20 per cent of your finance costs as a tax reduction.

What are the exact details?

To fully grasp what will be changing we first need to understand the difference between:

Tax deductions – legitimate business costs that are deducted from your rental income before you declare your taxable profit.

Tax reductions – reductions to your tax bill after your taxable income, and therefore profit, has been calculated.

Here goes….

Until today (6 April 2017) you were able to deduct your mortgage interest costs from your rental income before declaring your profit to the taxman. But by the time we reach the 2020-21 tax year you will no longer be able to do this. Instead, you will receive a tax reduction to your final tax bill, the equivalent of 20% of your mortgage interest costs – regardless whether you are a higher rate tax payer.

Are the changes immediate? 

The changes aren’t being introduced immediately, and will be phased in over the course of the next 4 years…

  • Year 1: Current financial year (2017-18): This year you can deduct 75% of your mortgage interest costs from your rental income before declaring your taxable profit. The remaining 25% of your mortgage interest will then be used to calculate a tax reduction (equivalent to the basic rate of Income Tax of 20%) which is then applied to your final tax bill.
  • Year 2: 2018-19: Next year, the split will be 50% deduction and a 50% reduction.
  • Year 3: 2019-20: In year three the split will be 25% deduction and a 75% reduction.
  • Year 4: 2020-21:…until finally, by year 4 you will no longer be able to deduct any of your mortgage interest costs and receive only the tax reduction.

What’s the take away message?

Your mortgage interest costs are no longer deductible and will count towards your taxable income.

The NLA predicts that almost half a million landlords who currently pay the basic rate of tax will be forced into a higher tax bracket as a result.

Is there a way around the changes?

Yes, but only if you own your properties as part of a limited company, in which case you will continue to pay corporation tax on your profits alone. However, transferring personally held properties into a company incurs potentially both capital gains and stamp duty charges, which will price the process out of most landlords’ financial capabilities.

We estimate that a ‘typical’ landlord with only one or two properties and fairly standard gearing would take in excess of 8 years to recoup the cost of incorporation. Hardly worthwhile for the majority.

What are my options?

There are a few options for landlords who will be hit by the changes:

  1. Incorporate: as above, many landlords have taken this action already, but sadly the costs involved mean it isn’t an option for everyone.
  2. Raise rents: faced with an increasing expense of providing housing many will have to raise rents in order to cover costs.
  3. Sell up: Many landlords will not be able to absorb the increased costs and will need to sell. There’s already evidence of this happening.

What is the NLA doing about it?

To date the NLA has, and continues to, lobby government over the changes, but while they are willing to listen to our arguments, they have yet to be convinced.

In order to provide a more compelling evidence base we have commissioned a large scale research project to outline the impact of the changes on the sector, and we’ll be sharing the findings with landlords and the Government in due course. NLA members can read more about this in the May / June edition of UK Landlord magazine.

The NLA also donated £10,000 to the (eventually unsuccessful) Judicial Review to fight the case at the High Court, and we remain, with other industry stakeholders, part of the Tenant Tax Coalition raising awareness on the matter.

What should I do?

If you are yet to do so, our advice is to crunch the numbers as soon as possible in order to assess whether you will be affected by the changes.

We also provide a list of trusted and vetted tax and accountancy specialist services through our Recognised Supplier scheme, including bespoke tax software from GoSimple Tax, which helps to calculate and submit your tax return directly to HMRC, even if you are not an expert. NLA Members receive a 50% discount.



Landlord tax changes: Are you about to be pushed up a tax bracket?

How to boost your chances of a successful buy to let investment!

According to Belvoir, when searching for a buy to let property there are several factors, both financial and factual, which need to add up in order to maximise your chances of a successful investment.

To help you in your search Belvoir have put together a useful ticklist so you can recognise a property’s potential at speed and with ease…

Price potential

Paul Rice, co-owner of Belvoir Liverpool Central and Belvoir Liverpool West Derby, has this to say: “One of the most important things to think about at the initial stages of your property search is budget.

How much should you spend on purchasing the property? Research the sales market carefully to ensure that the property is being offered at market value with room for capital growth. Check out how much it has been sold for previously too – this information should be readily available online.

If possible try and secure a deal. Vendors are often open to negotiation on sale prices, especially if you are a cash buyer or in a position to promptly proceed.

Buying an overpriced property will affect your profit potential, both in the short-term and when you wish to release your asset on resale.”

Ins and outs

Paul continues: “Additionally, always make sure you’ve done your research in terms of rental return and how much you could realistically ask per month for the property once tenanted.

Look at the property portals online and ask your local letting agent too. They are industry experts who will be able to provide a desktop valuation or valuation visit.

As well as the probable income, also look at your possible outgoings. Costs, such as annual gas safety certificates, boiler services, property maintenance and repairs, and any management or agency fees, should all be comprehensively calculated so you can work out a property’s potential yield after expenses.”

Rental ready

“Is the property you’re looking at rental ready?” Paul asks. “Today’s tenants want clean neutral spaces with modern bathrooms and kitchens. If a property is already move-in ready then immediate cash flow in terms of rent will potentially be available on completion of the sale.

If work needs to be done, however, then this should be factored into your budget before purchase. Until a tenant moves in there will be no rental return so it’s vital to be aware of not only what the work will cost but how long it will take too.”

Perfect postcodes

“Location is one of the essential keys to opening the door to a successful property investment so make sure you’re searching in the right postcodes,” he adds. “If budget is limited it’s often said that buying the worst property in the best area can be better than buying the best one in the worst.

Areas attractive to tenants usually have a wide selection of local amenities, such as shops and restaurants, plus are near to major transport links. If you’re aiming at the family market, good local schools are also a must.”

In demand

“Before starting your search it’s also vital to research the local rental market carefully to determine tenant demand,” continues Paul.

What type of properties are tenants looking for in your chosen area? Are they typically young couples who can’t get on the property ladder? Maybe they are re-locating families with young children? Perhaps there’s a university nearby creating a high demand for rental units for the student market?

Always identify your target market and buy with their wants and needs in mind. Budgets can soon spiral if unnecessary personal touches are added.”

Rental rivals

Assess the competition too,” he adds. “How many similar properties are available to let? What is the turn over and timeline from being marketed to a tenant moving in?

Always ensure there is still sufficient demand and that the local area isn’t already over-saturated with the type of property you are considering to purchase.

Look at the rent levels other landlords are asking too, plus the quality of the properties on offer so you can compare and contrast.”

Purchase purpose

Paul concludes: “Even before you’ve committed to a property it’s important to know what your exit strategy is likely to be.

What is the purpose of the purchase? Are you looking to move into the property on retirement? Are you intending to keep hold of it as an investment for your children or grandchildren? Perhaps you’re hoping to benefit from capital growth on resale so you can reinvest?

To a certain extent your long-term goals will dictate which property is right for you,” he says. “So it’s essential to have your end aims in mind even at the very beginning of your investment journey.”

Mandatory Client Money Protection is here!

On 27 March 2017 Housing Minster Gavin Barwell confirmed via twitter, that Client Money Protection Insurance would be made mandatory for agents in England following the recommendation of a working group set up in Autumn 2016.

What is Client Money Protection Insurance?

CMP ensures the money that a landlord or tenant pays to a letting agent is safely protected against misappropriation by the agency.

Letting agents that have CMP must maintain and operate a separate account with their bank, where all client money is held separately from their operating funds. Examples of client money can include tenants’ deposits (before and after they’re protected), landlords’ repair funds, rents, service charges and arbitration fees. So, in the unlikely event that money is mishandled by the agent, the landlord or tenant’s money is secure, and they can make a claim from the relevant CMP insurance scheme for its return.

How do I get CMP?

CMP is usually obtained as part of trade association membership. So if you join UKALA, ARLA, NALS, RICS or the NAEA then CMP is an automatic member benefit.

However, if being a member of a trade body doesn’t suit your business requirements then you can obtain standalone CMP cover from select providers, including Client Money Protect. Agents that are interested in a trade association membership should look at UKALA, who both mydeposits and Client Money Protect have a close working relationship.

Mandatory Client Money Protection is Here


H.A.S Property Management have an immediate vacancy for a Part Time Accounts Assistant to help With Financial Issues in the office – Hours can be flexible to suit the successful candidate.

The Hourly Rate will be negotiated dependant on experience – Please forward a CV to-

Interviews will be held very soon.

Tax Changes- Are you ready?

As of 1st April 2017, hundreds of thousands of landlords who currently pay the basic rate of tax will find themselves forced into the higher tax bracket as a result of  new restrictions on landlord tax relief.  Yet despite this, very few landlords know anything about the changes or how it will affect them.

Currently, mortgage interest payments are one of a number of expenses that landlords can deduct as a business cost.  However, once changes are fully phased in by 2021, landlords will no longer be able to deduct mortgage interest payments or any other finance-related costs from their turnover before declaring their taxable income.


How are the changes going to be introduced?

The changes will be phased in over the next four tax years, starting from April 2017, as follows:

2017/18 tax year – Landlords can claim 75% of allowable expenses, and will receive relief at the basic rate (20%) on the remaining 25%;

2018/19 tax year – Landlords can claim 50% of allowable expenses and will receive relief at the basic rate (20%) on the remaining 50%

2019/20 tax year – Landlords can claim 25% of allowable expenses and will receive relief at the basic rate (20%) on the remaining 75%

2020/21 tax year – the switch will be complete, with the only tax relief being the basic rate of 20% on your allowable expenses.

The announcement to cut mortgage interest tax relief in the 2015 Budget came as a surprise to many landlords.

Landlords need to seriously look at how their investments are performing, just as they would if they had stocks and shares. If a stock price is falling, there is a decision to stick it out or sell. In the case of property, of course there is always capital growth, but what about monthly income versus costs?

Landlords will be faced with higher costs.  At least at present, interest rates are historically low, but what happens when rates rise?


An example of how a landlord’s tax liability could change over the next 4 years

John is a landlord. He is already a higher rate taxpayer (40%).
John’s Buy-to-let property generates £20,000 per annum.
His allowable expenses (e.g. mortgage interest) total £13,000

Tax year 2016/2017 (Old system) – John pays tax on the profit after all expenses are deducted. £20,000 – £13,000 = £7,000 (John pays 40% tax on £7000 which is £2,800)

Tax year 2020/2021 (New system) – If John’s rental income and expenses remain the same he will pay tax on his total income of £20,000 = at 40% this is £8,000 (less the basic-rate relief of 20% on expenses of £13,000, which is £2600).  £8,000-£2600 = £5,400.


What can landlords do?

Landlords should carry out a business review on each of their rental properties. Remember, banks will be more stringent on affordability checks when it comes to buy-to-let mortgages as well, so it’s vital to know how much is coming in and how much will be going out.

Landlords need to list down all their costs (letting agent fees, management fees, maintenance, etc.) and consider areas where savings could be made. It’s extremely important to seek expert advice from an independent financial advisor who can support a robust and comprehensive financial plan for both the short and long-term.

Tax changes – Are you ready?


1.4m landlords ‘unaware of mortgage interest tax relief change’

The imminent changes to mortgage interest tax relief for the buy to let sector estimates that 1.4m landlords are still unaware of the proposals.

The Landlord Referencing website – which backs the so-called Axe The Tenant Tax campaign against the tax change contained in S24 of the Finance (No.2) Act 2015 – says that it has polled 1,000 of its members.

It says that overall some 8.2m people in England alone will be affected, because they let residential property as an individual, or in a partnership or trust.

The main campaign against the measure – which is phased, with part one coming into effect on April 1 – has the support of ARLA, the NLA and RLA, UKALA and the Scottish Association of Landlords. Last year the campaign lost a bid to trigger a judicial review of the measure, first announced in George Osborne’s post-election Budget of 2015.

Fixing our broken housing market:

CEO of mydeposits, Eddie Hooker, discusses some of the trials facing the private rented sector following the Government’s publication of the eagerly awaited white paper on the housing market.

Some of the statistics quoted in the paper on the housing market are frightening; the average home in the UK costs almost eight times the average salary, below average income earners, spend more than a third of their income on housing and more than 4 million households rent in the UK – nearly twice as many as 10 years ago.

The solution is building more houses, make renting fairer and providing financial assistance to those that need it.  But can it be realistically achieved?

The May administration has recognised that the private rented sector plays an important part of the long-term solution for the UK housing market.

The plans laid out focus on affordability for renters and driving up standards. I reinforce the government’s message:  letting agent fees to tenants will be banned. Client Money Protection insurance again is mentioned, with a clear suggestion that this important consumer protection tool will be made mandatory for all letting agents. Mandatory electrical safety checks and properly enforced licensing of Houses of Multiple Occupation are also mentioned. Finally, the question of longer fixed tenancies has been raised again. In my experience, most landlords also want the security of income to support their investment and will grant longer term tenancies wherever possible.  Flexibility is an important aspect in the rented sector.  Everyone is different.

It’s a challenging time ahead for the private rented sector.

With so much to digest it will be fascinating to watch the progress of these initiatives over the coming years. Whilst it is clear that there is still room for improvement, the report itself shows that standards are already on the rise, with 65% of private tenants happy with their tenure, increasing by 17% since 2005.

Lettings Survey Shows Huge Lack of Landlord Awareness

The need for letting agencies to assist landlords with the increasingly-complicated private rental sector has been hammered home by the results of a survey of almost 4,000 buy to let investors.

The Landlord Knowledge Survey, by online letting agency Urban, reveals that:

– around 20 per cent of landlords are unaware of existing EPC regulations, and 17 per cent were unaware of the MEES changes set to come in to effect from next year;

– 70 per cent of landlords are not aware of all procedures involved in the Right To Rent regulations which came into effect a year ago;

– only 34 per cent of landlords adequately test the smoke and CO2 alarms in their rental properties;

– 38 per cent did not know that a tenant could refuse them access to the rental property even with 24 hours’ notice;

– substantial numbers were unaware of the repercussions of failing to join selective or other local authority licensing schemes that exist in many areas;

90 per cent of landlords made errors when questioned on their responsibilities over tenancy agreements;

– around a third of landlords showed confusion over gas safety requirements;

– only 50 per cent of landlords appeared aware of the potential tax consequences of April’s start to the phased reduction of mortgage interest tax relief.

“One reason to explain the lack of industry knowledge could be due to the recent influx in new regulations, which have flooded the rental market” explains Adam Male, co-founder of Urban.


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