As we head to the end of Q1 2017, how quick has that gone? I’ve only just put the Christmas decs away and yet it seems like an age.
Have you stuck to your New year’s resolutions, or lost track amongst all the hype of BREXIT and Trump? Like most in the property game I have been following, with a little boredom I have to say, the continued predictions for what’s in store, good and bad during the remainder of this year and beyond.
It never ceases to amaze me how one commentator predicts ‘Armageddon’ whist another, ‘all sweetness and light’ Of course the reality is, they either say something to justify their fees, or just like the sound of their own voices because in reality, when trying to predict the future we just don’t know.
What we can say for certain is the property market is doing quite well according to the recent Home Track report, generally speaking capital growth, in the Northern areas of the UK of 8.3% with Manchester and Liverpool being more attractive than London.
I think we at the sharp end of the property market and in it for the long haul are more interested in how to mitigate the un-fair tax grabs being imposed on us, such as the 3% SDLT and the loss of 20% mortgage interest relief, and of course something that many may have overlooked and Sneaking in under the radar of this furore, has been the changes to landlords’ wear and tear allowance, which were also unveiled in the budget. Now that the dust has settled on the changes directly affecting mortgage interest relief, it’s a good opportunity to look a little more closely at the wear and tear element of incoming tax changes
While changes to interest relief will be phased in from 2017-18, gradually reaching their full reduction by 2021, the changes in wear and tear allowance are more imminent.
As it currently stands landlords with furnished properties can deduct 10% of their rent from their profit, to account for general wear and tear of the property. The idea is that this deduction covers changes which may need to be made to keep the property in a good condition, such as replacing furniture for example.
From April 2016, however, this has changed. Rather than being able to automatically deduct 10% as a wear and tear allowance, landlords will only be able to deduct costs which they have actually incurred. In other words, landlords will need to prove that they are deducting their allowance for purchases made to address general wear and tear, like items of furniture mentioned, this of course means the production of purchase receipts and prof of payments.
The other BIG ISSUE in our sector of property management is the predicted loss of tenant fees, now whilst I must argue against this unpaid work, I must also admit our industry have to a great extent, brought it upon ourselves, due to excessive fees being imposed by some agents, both in amounts and quantity. But as the jury is still out on this issue as to what, when, and how, I will say no more for now, but what must again be recognised, which it seems those chaps in parliament who are paid £75,000 a year plus expenses for their wisdom, seem to blindly miss, is all this new stuff will without doubt have a negative impact on the very people the market is supposed to be supplying and supporting , the tenant, in increased rents.
What we at Go Direct Lettings Franchise Group have done to assist our franchisees against any potential loss, is introduce a new landlord facility which will assist in mitigating a great deal of the landlord’s loss mentioned above.
We would love to hear from anyone looking to assist in filling the inevitable vacuum likely to be caused by joining our team and any landlord looking for more information on how we can help mitigate some of your loss.
Why do it the hard way when you can “GO DIRECT”
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