Monthly Archives: March 2017

Bristol landlords may need to increase rents by up to 30% as a result of tax changes

Rented property tenants with landlords in Bristol could face potential rent increases of up to 30% as a result of tax changes, analysis has found from our reading this week.

Many critics believe that the recent tax changes, in particular, the 3% stamp duty surcharge for those with second properties, are having a negative effect on the supply of rental properties, and are not the neutral non-discriminatory system that the government has suggested.

advice for property landlords in Brisotl on tax changes from City Rental Services

Re-think needed

Professor of financial economics at Imperial College London, David Miles, says that the planned tax changes should be scrapped:

“Stamp duty is now being levied at a higher rate on properties bought to be rented. Most properties bought by private buy to let investors will pay an extra 3% in tax. And starting from April 2017 the rate at which interest on mortgages used to acquire buy to let properties can be offset against tax on rental income will be reduced from an investor’s marginal income tax rate down to the basic rate,” says Miles.

He says that it is difficult to understand why the Government would want to deter provision of private rented accommodation from smaller landlords and that the changes will not make it easier for first time buyers as was planned.

Raising rents

Research suggests that landlords would need to raise rents between 20% and 30% to offset the impact of the Government tax rises.

“The effects of the tax changes are clearly large. Generally, rents would need to rise between 20% and 30% to offset them, more often than not rents need to rise by closer to 30%. The impact of the reduced tax deductibility of interest payments, which affects cash flows every year, is substantially larger than the impact of higher stamp duty, which affects cash flows only at purchase and is spread over the length of the landlord’s investment,” Miles explained.

Passing on costs

Separate research also found that around a quarter of buy-to-let landlords in the UK are passing on increased costs to their tenants as a result of the cap on tax relief being phased in from April this year.

Levels of awareness about the implications of the tax relief changes are rising, with 58% of landlords saying that they have increased rent, or plan to in the near future, the company’s latest Private Rented Sector Trends report, based on interviews with more than 200 experienced landlords, found.

The Residential Landlords Association (RLA) has also found that the majority of landlords will be negatively impacted by the tax changes and has called for the Government to use the extra revenue it will receive from its stamp duty levy to halt the implementation of the mortgage interest relief changes.

The impact on Bristol property landlords and tenants could be considerable – we will, of course, monitor this for our landlord clients and tenant customers alike during 2017.

To find out more, simply contact our independent lettings agency on Gloucester Road here.

Top tips on getting the perfect tenant for Bristol rented property

For any rented property landlord in Bristol looking to bring a tenant on board, there’s no doubt a temptation to get everything signed, sealed and delivered in terms of getting them moved in and settled.

It’s the quickest way to start bringing in rent and making a solid return.

tips on finding the best rented property tenants in Bristol from City Rental Services

However, if the process of onboarding a new tenant is not done right when a new tenant is coming in, it can cause a number of problems down the line in terms of unpaid rent, broken rules, and other issues that can take months to reverse.

For this reason, it always makes sense to ensure that the correct checks are carried out before you allow someone to rent your property, such as:

Employment check

While someone may have a good credit history, it doesn’t always mean that they have the means to keep up with regular rental payments.

It makes good sense to always check that someone has an income that will mean they don’t simply neglect to pay.

Asking for a confirmation letter from an employer and some recent pay slips can go a long way to proving that they have the income to be able to afford their rent.

City Rental Services pays extra attention to the picture that a Bank Statement can paint, as it offers an excellent detailed lifestyle picture.

References

Another thing that is always worth checking when you have a new tenant coming to live in your properties is whether they have a good history as a tenant. If they have rented before, then they will probably have dealt with a letting agent to do so, and that agent can vouch for them on a number of points.

If they paid their rent on time, always kept the place looking as it should and left without any real problems, then the letting agent should be able to give you a positive reference that lets you know you are getting a good tenant moving into your property.

Interview

It may seem a little corporate, but after you’ve checked everything else and it all looks good to go, why not just have a little informal chat with the tenant themselves to ask any questions.

Look for things like what they are hoping to get out of that property in particular, why they are choosing to live in the area, their rental past, and any other relevant factors.

It can help you paint a good picture of whether they will be a good fit for your property and a good tenant moving forward.

Guarantor

Here at City Rental Services if a perspective tenant has not been in their current employment for at least a year, we request that a Guarantor is put in place.  We also often speak with the Guarantor, to ensure that they are aware of their responsibility.

There are many ways to assess a perspective new tenant but we find the above to be the most simple and informative.

To find out more, simply contact our independent lettings agency on Gloucester Road here.

A new career at City Rental Services

This week at City Rental Services, we’re handing over our Bristol rented property blog to new recruit Scott Matthews, to highlight his new career so far with us:

Scott Matthews at independent letting agency in Bristol City Rental Services

Having worked for City Rental Services for just over six months, I have learnt a lot in my short time here, including the ins and outs of not just letting a property but maintaining it throughout its tenancy.

Having been a student myself, I have found an enthusiasm for helping students find their ideal properties at this time of year when there is such a competitive demand.

For students it can be a stressful and time-consuming time whereby in most cases, they have had just months to kindle new friendships and must commit to finding accommodation for the next year of study.

I have had the opportunity to meet some of these students facing the challenge this year and I have taken great pride in being able to help them find their perfect home.

At City Rental Services, we strive to make our application process as easily accessible as possible.

Through the use of electronic application forms and online payment details, the large majority of the process can be completed from the comfort of their own homes.

We also offer a lot of flexibility for when they do need to pop in to see us.

Each day at City Rental Services has brought something new, and I have enjoyed rising to different challenges and the experience that it brings.

As we move closer to the start of the next academic year we are preparing for the period in which we move students in and out of our properties.

I am very much looking forward to this time, where all of the work pays off and the students, in their hundreds, embark on the next chapter of their life at university.

Scott