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Major overhaul to Making Tax Digital plans
21 July 2017
Under UK government proposals, landlords with a turnover above £10,000 were going to be required to keep financial records digitally using specialist software and send HMRC quarterly updates on their tax affairs.
We are pleased to report that in response to concerns raised about the scope and pace of reforms, the government is making the following changes to the requirements: –
• Only businesses with a turnover above the VAT threshold (currently £85,000) will need to keep digital records and only for VAT purposes
• They will only need to do so from April 2019
• Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least April 2020.
These changes mean that for the time being most landlords are removed from the scope of the requirements. It is possible that the requirements will be extended to smaller businesses and landlords in the future, but this will not be until April 2020 at the earliest.
This is a comparatively new addition to the PRS but its starting to assume an important place in the sector as new initiatives are approved and investors enter the market. Its fairly well accepted that there has been a major shift in the way younger people view home ownership. With changing work patterns and the need for flexibility its understood that many would rather rent than buy even if they could afford to do so.
The problem is that there just are not enough properties to satisfy demand and this imbalance has been the focus of collaboration between developers , builders and the Government to develop affordable Build to Rent initiatives to fill the gap.
With some of the new build sites the numbers of applications for each property have run into the hundreds so theres lots of work to be done in the years ahead to expand this to meet the huge demand.
Congratulations to Steven and Lyndsay on achieving success in their NFOPP Letting Agents exams. An inspiration to the rest of our team as they prepare for theirs. Rentlocally embrace the raising of standards and we feel this is a huge step in the right direction. Well done !
Much depends on which Reports you source for this kind of analysis but in general it does look as though the cost of renting a home in the UK in 2017 is almost exactly the same as it was in the previous year. So say Countywide as part of their latest rental market index but is this in fact the case in Scotland. Its true that with falls in Aberdeen and rises in the central belt we are looking at a zero sum game reflecting exactly the National picture of 0.1% year on year but the position is very different if we look at the major cities one by one. Edinburgh and Glasgow have rallied with rents increasing by approximately 4-5% and Aberdeen has shown consistent improvements which if the trend continues will see rents level off by the end of the year. Why then should this be so ? Changes to the legislative and tax frameworks are working their way through the sector but its still too early to say if this will produce any discernible reduction to the supply of properties in the market although it is our judgement that it will and that in turn will alter the picture somewhat over the medium to long term. Of course this will favour greater increases in rents as supply becomes squeezed which is not good news for tenants but might demand the industry to become more sensitive to the problem that this will create and for landlords to place more emphasis on getting good long term tenants rather than maxing out the rents. Rentlocally firmly believe that matching tenants to properties is the key to better letting and this means more than just accepting the first candidate to offer a deposit.
It seems like an odd phrase but in fact it is exactly what needs to happen to ensure that our Landlords get the service and conditions they need to entrust their property to us. Of course we have to be realistic and its always true to say that there are limits to this but if its a question of fine tuning then we are ready and willing to do so. Most importantly we dont want to get into a situation where only the cheapest offer is the one that everyone goes for , its our duty to communicate that this is a balance that has price on the one side and service on the other. Renting is a long term commitment for most these days and it therefore makes sense to really focus on finding the right match for each individual property. This in itself is a challenge but thats where the skill of the property managers comes into play. We are currently training the team to meet the standards expected of a professional firm and to equip them with the knowledge to be of more practical help to our landlords in areas of concern or special interest. We urge our landlords to get to know their property manager and to seek their advice.
One thing is certain , and that is the significant reduction in borrowing for buy to let as compared to the same period last year. It should be noted however that in this same period in 2016 there was a big surge in borrowing to complete any buy to let purchases before the introduction of the surcharge. The actual figures are a 39% drop in loans and a 40% drop in the amount borrowed Jan – March 2017. On the face of it that does not look encouraging however …
For those new investors entering the sector they do so at a time when the demand from tenants has never been so acute which is going to be reflected in higher rents and much keener demand for available property. If your thinking about buying to let but would like an idea of the likely yields on your investment please ask Rentlocally for advice. We have a number of tools at our disposal that should assist with choosing the best locations and property types and we can now also offer a full purchase service via our Sales division which reflects the high standards of professionalism and care that we have become associated with.
Where is my deposit held?
If you rent your home and pay a deposit, your landlord or letting agent is legally
required to protect your money with a tenancy deposit scheme. RentLocally have
protected your deposit with Scotland’s leading tenancy deposit scheme,
How I get my deposit back?
When your deposit was transferred to SafeDeposits Scotland, we emailed you your
log in details for our website. If you live with other people, we also confirmed which
person is the lead tenant. The lead tenant is responsible for responding to or
entering a repayment request when the tenancy ends.
After you move out, RentLocally will usually log in to our website and enter a
repayment request first. This will confirm if they want the full deposit repaid to you
and your flatmates, or if they want to keep any for unpaid rent, damage, etc. We’ll
email you a copy of their request. If you’re the lead tenant, you should log in to our
website to agree or disagree with the request.
If you’re not the lead tenant, you should log in to add your bank details.
If the lead tenant agrees with the request, we’ll repay the deposit within five working
Is there anything I should do before I move out?
You should double-check that you have your welcome email which confirms your log
in details for the SafeDeposits Scotland website and who the lead tenant is. If you
can’t find your welcome email, please get in touch.
You should also log in to our website to make sure we have your up-to- date email
address on record, as this is what we’ll use to contact you after you move out.
How long does the process of getting your deposit back take?
The repayment process is fastest when the repayment request and response are
entered as soon as possible. For example, RentLocally can enter a repayment
request and you can respond to it on the same day, which means we’d repay the
deposit within five working days after that. You can help speed up the process by
speaking to RentLocally before you move out to reach an agreement on how the
deposit should be repaid.
More useful information can be had here : https://www.safedepositsscotland.com/
Rent guarantee is designed to provide cover when the worst happens but .. here are a few tips to ensure that a tenancy agreement is fit for purpose. If any landlord wants more information about this we will be delighted to advise but for now heres a quick run down on the procedure to follow.
Ensure that all names are included in full and correctly spelled.
Ensure the property address is included in full , use the Royal Mail Postcode / Address finder to obtain the exact post code or location.
Ensure that the tenancy agreement is signed by all parties.
Its recommended that a separate Deed of Guarantee be set up when a guarantor is required to secure a tenancy.
Ensure that the rental amount is correct and matches the rent stated on the rent guarantee policy.
Ensure that your tenancy agreement contains a forfeiture clause , or for Scotland an irritancy clause to cover Section 18 part 6 of the Housing ( Scotland ) Act 1988 allowing the landlord to bring proceedings for possession based on default of rent.
If any of our Landlords are interested in this subject please talk to your property manager who will be happy to assist.
The Scottish Government has completed its consultation on the question of introducing a minimum energy efficiency standard for privately rented properties.
It has also been considering changes to the Repairing Standard to align it with standards required in social housing. There is more information to be had about this subject at https://consult.scotland.gov.uk/better-homes-division/energy-efficiency-programme/
Briefly , the proposal is that there shall be a minimum energy efficiency standard for all properties covered by the Repairing Standard. These properties would have to have a minimum EPC rating of E at the point of rental from April 1st 2019. All properties must comply with this expectation by March 31st 2022. It is also proposed that for properties at the point of rental the minimum rating rise to D by April 1st 2022. All properties must have a minimum rating of D by March 31st 2025.
There will be some exemptions as yet not known , and a cost cap of £5000 is planned for each individual property.
With regard to Repairing Standard , the consultation is looking at improving safety and the physical condition required for a rented property. The things included relate to having a tolerable standard throughout , safe kitchens , adequate food storage space , fixed heating , lead free pipes , safe access to common facilities , safe and secure common doors , fuel safety standards in addition to gas and electricity .
It is also the remit of the proposal to reduce risks in the home from scalding , electrocution , asbestos , contaminated water and noise issues. The question of provision of fixed white goods , such as washing machines , cookers and freezers is also included.