Any pest infection needs to be acted upon quickly, so it’s essential to understand the causes and who is responsible for dealing with it before the problems caused by pests become worse.
Pests mean trouble!
Whether rats, mice, wasps, fleas, bedbugs or cockroaches, an infestation of any pest causes property damage and potentially leads to illness due to the unsanitary conditions they can create.
Initially, you may not always see the culprits of the infestation yourself, but signs such as droppings, gnawed woodwork, nesting or strange smells are clues there may be unwanted visitors.
At these first signs of infestation, it’s important to act quickly, so whoever is responsible for dealing with the infestation must do so immediately. Leaving it will only mean a more significant issue to resolve in the future.
Determining who is responsible for dealing with pests – landlord or tenant – may not always be obvious, and it can depend on the cause of the infestation, but it shouldn’t be allowed to cause delay.
When is the tenant responsible for dealing with a pest infestation?
If an infestation can be linked to rubbish not being disposed of properly or the property not being kept clean. In these cases, the tenant will likely be held responsible for taking action.
When is the landlord responsible for dealing with a pest infestation?
Landlords are responsible for ensuring the property they rent is fit and safe to live in. This means if the cause of the infestation is a result of the landlord not meeting their obligations, they will need to deal with the matter. For example, a landlord is likely to be held responsible if:
- The infestation makes the property unfit to live in
- The infestation was present before the tenant moved in
- Repairs to the property are needed to prevent pests from entering, such as broken drains or cracked walls
- Actions taken previously failed to resolve the issue
Landlords should carry out repairs, bring in pest control or contact the local council to address the issue. If the cause is the landlord’s fault, the tenant should not be charged for any action taken to eradicate the infestation.
The tenancy agreement may also contain clauses relating to responsibility for managing pest infections and should also be referred to help determine who is responsible for what and when.
What can be done to deal with infestations?
It’s important to act quickly, informing the landlord when signs of a potential infestation are first noticed so that the landlord and tenant can work together to resolve the matter.
Send photo evidence of the issue to the landlord and locate the cause and source of the infestation so it can be eradicated. Pest control can assist with this.
Pests can do serious damage to the landlord’s property, so it is in their interest to deal with them quickly. Still, if they are not acting, tenants can contact the local council’s environmental health team, who can arrange an inspection, give advice and take enforcement action.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go can help you deal with pests and other hazards through regular inspections and inventories, streamlining costs and cutting your workload, contact No Letting Go today.
Over recent years, we have all been aware of the need to make green choices, reduce energy use and cut CO2 emissions to protect the planet.
With the Energy Saving Trust stating that approximately 22% of the UK’s carbon emissions come from homes, for any landlord looking to improve their green credentials, their properties are an excellent place to start.
Here are our top tips for making your rental property greener.
Top tips for Green Properties
1. Install renewable energy heating systems. This is a more expensive option for reducing your CO2 emissions. Still, solar panels, heat pumps and biomass boilers are becoming more popular as replacements for fossil fuel heating systems, and their efficiency will save money in the long run.
2. Install double or triple glazing and insulated external doors. Better glazing will help a property to retain heat, as will a good-quality door with integrated insulation. They are designed to be durable and last a long time while retaining heat means you will use less fuel for heating.
3. Insulate your property. With 25% of heat being lost through uninsulated roofs, insulating walls, floors, and roofs will significantly reduce your heating costs by preventing heat loss. And because it’s so effective, having insulation means you will enhance the benefits of other heat-saving initiatives.
4. Prevent draughts. Fill in cracks around doors and windows to prevent heat loss, and use draught excluders around doors if they can’t be replaced.
5. Install a smart meter. These are programmable, so you can better control when the heating is turned on and off. It means you can use less heating and will be more aware of how much you are using.
6. Use energy-efficient lightbulbs. Besides using less energy than regular lightbulbs, they also last longer and need replacing less often.
7. Don’t waste water. Dripping taps add to your water consumption, and even though it may seem insignificant, the water wasted adds up over a sustained period. Not only should we not waste water, especially if water shortages become a feature of climate change, but occupants will be charged for this wasted water if they are on a water meter.
8. Use environmentally friendly paint. Paint with zero levels of VOC (Volatile Organic Compounds) content is environmentally friendly. Still, they are also better for our health because they contain fewer chemical compounds that cause harm when breathed in.
9. Use sustainable building materials. If you are renovating, repairing or building a property, choose materials that have been recycled, are sustainable and are sourced locally so that they will have a smaller negative impact on the environment.
Time to make a change
The UK Committee on Climate Change says that around £250 billion will need to be invested by 2050 to bring the nation’s housing stock up to date*** and that now is the time to start making that investment.
The good news is that there are many ways to improve our properties’ green potential so that we can all start taking steps forward, no matter your budget. In return, you’ll begin to preserve the environment and ultimately protect the planet’s atmosphere.
And as an additional benefit, these changes will add to the value of your property and its desirability to potential tenants who are also looking for a safe home that doesn’t cost them an arm and a leg to keep warm.
No Letting Go
If you are a landlord owning a rental property or an estate agent looking after properties on the owner’s behalf, find out how the local support and national network we offer at No Letting Go could become your inventory partner.
For more information about how we could streamline your costs and reduce your workload, contact our team of advisors at No Letting Go today.
The risk of Legionella may not be as well-known as carbon monoxide poisoning or fire, but it is yet another threat to a tenant’s health. As for the other risks, landlords have specific obligations to manage the risk.
What is Legionella
According to the Health and Safety Executive (HSE), Legionnaires’ disease is “a potentially fatal form of pneumonia caused by the inhalation of small droplets of contaminated water containing Legionella.” The legionella bacteria can cause fevers, headaches, shortness of breath, coughing and nausea. Older people with lung issues or poor immune systems are particularly at risk.
Legionella can grow in all hot and cold artificial water systems that provide the right environment to allow the bacteria cells to multiply.
Why do landlords need to be aware of Legionella?
As a landlord renting a property, you have a legal responsibility to ensure the health and safety of your tenants. This means keeping your property free from health hazards in accordance with UK legislation such as the Health and Safety at Work Act 1974, the Control of Substances Hazardous to Health Regulations 2002 and the HSE’s L8 Approved Code of Practice.
As Legionella is a potential health risk, landlords have a legal duty to make an assessment of the risk of Legionella and then manage and control any possible incidence of exposure to the bacteria.
How can landlords manage the risks from Legionella?
Conducting the appropriate risk assessments determines Legionella’s risk, enabling landlords to understand where there are risks and put in place measures to mitigate them.
How frequently risk assessments for Legionella need to be conducted will vary. Properties in regular use, where water systems aren’t left standing, will likely need less frequent assessments than older properties or a property where water systems are left standing for long periods.
Following a risk assessment, certain control measures can be implemented to help reduce the risk of illness:
• Controlling water temperature so it isn’t kept within the range where Legionella can develop. Hot water needs to be hot, and cold water needs to be cold.
• Don’t allow water to stagnate in water systems; keep it flowing.
• Flush water systems through before new tenants move in.
• Keep water tanks covered to avoid debris getting into them.
• Control the release of water vapour.
• Remove redundant pipework.
Who can assess the Legionella risk?
When conducting a risk assessment for Legionella, a professionally trained or accredited assessor isn’t required. Still, the assessment must be conducted by a competent person who understands the risk of Legionella and where it may lurk within the property. With this specialist knowledge, you may conduct thorough assessments, putting tenants at risk.
How can No Letting Go help you?
The experienced team at No Letting Go regularly conducts Legionella risk assessments pre-tenancy. They will continue to ensure that properties are well maintained and remain a safe place to live or work in through our mid-tenancy assessments and end-of-tenancy services.
You can learn more about Legionella, the obligations placed on landlords to manage this risk, and actions you can take to protect yourself and your tenants by visiting our website here.
Our range of tenancy services are designed to ensure that landlords remain on top of their duty to protect tenants.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, streamlining your costs and reducing your workload, then contact No Letting Go today.
What happens if your tenant wants to install their own security measures? Should a landlord stop them even though it may be in the interests of both parties?
We look at how a landlord can navigate the issue with their tenants and why additional security may be a good idea.
Do landlords have to install security systems?
While landlords need to provide a level of safety and security for their property, there’s no specific requirement to install security systems as there are for health and safety measures such as carbon monoxide monitors and fire alarms.
Installing a security system is likely to reassure tenants and may be an additional factor in choosing your property. If a security system is installed, you should make tenants aware of it and what it covers.
Neither is there a law specifically stopping a tenant from installing a security system themselves. Still, they must ensure that the camera only covers their rental property if it includes CCTV.
What does your tenancy agreement say?
The clearest direction on whether your tenant can install a security system is likely to come from your tenancy agreement.
Whilst having no legal weight to stop an installation, the terms of a tenancy agreement may stipulate that tenants can’t make alterations to the property, which could cover a new security system. Even if the landlord permits the tenant to install a security system, they may still be required to return the property to its original state when they move out.
Suppose the tenancy agreement is silent on the subject. In that case, a tenant may see no issue with going ahead and installing their own system, emphasising the need for a clear and comprehensive tenancy agreement.
Why extra security can be of mutual benefit
Before dismissing the idea of additional security measures, landlords should first consider the benefits this can bring them:
• Additional security can make your property more attractive to potential tenants
• Tenants get peace of mind, which means they are happier
• More security can deter break-ins and vandalism
• Avoid issues of liability after a break-in if tenants accuse you of not taking sufficient measures
• Giving a fair hearing to requests builds your reputation as a good landlord
How can landlords support new security systems?
It’s easier to accept changes if you are included in the process. By making sure tenants share access codes, operating instructions and by taking the opportunity to agree in advance to a new system, you can feel more comfortable and ensure that any changes don’t cause problems.
The right security system can give a mutual benefit. Still, it’s better to discuss before any action is taken to agree on a new system and ensure any changes stick to the tenancy agreement, which can be verified through tenancy check-in services and routine inspections.
If a new security system isn’t acceptable, take time to understand the tenant’s concerns and look for an alternative solution to ensure they feel safe in their home.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, streamlining inspection processes, drafting tenancy agreements and reducing your workload and costs, then contact No Letting Go today.
Good relationships are built on trust, which holds true between a tenant and landlord. To help foster a good relationship to ensure a more harmonious tenancy, here are our top tips for building and reinforcing that trust.
8 Tips for Tenants and Landlords to Build Mutual Trust
1. Ensure the property is well maintained.
Tenants feel safe and more secure knowing you care for their safety and well-being. Ensure that gas and electrical equipment are serviced as necessary, carbon monoxide and fire alarms are fitted as required, and inventories are completed to ensure that the property is maintained in good order and problems are identified early.
2. Make time for managing your property.
Property management isn’t a 9 to 5 job; it takes an investment of time and effort to be a good landlord. If you don’t have the time to manage your property and deal with tenants’ needs, consider using third-party support to ensure your investment works for you and your tenants.
Make sure your tenant can speak with you when they need you and share key information in good time. Having clear channels of communication in place that flow both ways makes it easy and convenient to share important information.
4. Read the lease agreement
Tenants also need to understand their obligations, and the lease agreement defines the relationship between both parties. So, it’s an important document for laying the foundations of a good relationship. Following the lease agreements helps prevent any surprises that can break trust with either party.
5. Report damage immediately
Let the landlord know you care for their property and will take action to minimise harm by reporting problems quickly. However, be mindful of what you can fix yourself within the terms of the lease agreement to minimise the impact of a problem. For the landlord’s part, when a fault is reported, act promptly or tenants may start reacting to deteriorating living conditions through complaints.
6. Keep the property clean
If tenants want their landlord to maintain their property, they also have to play their part, keeping it clean and well-ventilated to prevent mould, dampness and pest infestations.
7. Pay rent on time every time
This should always happen, but if you are struggling as the tenant, let your landlord or agent know in advance to discuss alternative arrangements.
8. Be a good neighbour
Landlords don’t want to deal with complaints from neighbours about antisocial or inconsiderate tenants, so it isn’t just the landlord you need to maintain good relations with for a successful tenancy.
Building the foundations for good relations
Building and maintaining a good tenant-landlord relationship starts with laying the right foundations on both sides, with the expectations of each party clear from the outset.
No Letting Go’s range of services covering pre-tenancy, first-day check-ins, and mid- and end-of-tenancy inspections ensure that tenants and landlords start off with the same expectations consistently upheld through regular inspections.
Not only do they offer landlords reassurance regarding their property, but tenants are also reassured that the property is being maintained for their safety and comfort and assessed by an impartial third party.
Our inventories, check-ins and management services help all parties to respect boundaries and be clear over their responsibilities, reminding landlords that their property is the tenant’s home and tenants that their home is the landlord’s property.
No Letting Go
If you would like to discuss how our local and national support network at No Letting Go can become your inventory partner, streamlining costs and reducing your workload, then contact No Letting Go today for a no-strings consultation.
With more than 20,000 fires in homes in the UK caused by electrical appliances, the need for electrical safety in residential buildings is vital.
To help landlords and letting agents get started on preserving the safety of tenants in the communal areas of their residential lettings, here’s our guide to maintaining electrical safety.
What does the law demand?
Landlords are responsible for ensuring residents and visitors are in a safe space, including protecting them from electrical faults and fires caused by a fault.
Electrical safety in rented properties is covered by several laws. Most recently, the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 require landlords to:
- Ensure that all electrical safety standards are complied with during any period in which the residential premises are occupied under a tenancy
- Ensure every electrical installation in the residential premises is inspected and tested regularly by a qualified person. This is every five years unless an inspection specifies a shorter period.
- Provide a copy of the electrical safety report to their tenants and local authority if requested
Landlords who don’t comply with government standards will find themselves held accountable and subject to substantial fines.
What is a communal area?
When considering electrical safety in communal areas, landlords need to think in broad terms about what those communal areas include:
- Entrance halls
- Kitchens and bathrooms
- Parking areas
- Parking areas
This means inside and outside spaces with electrical facilities must be maintained equally conscientiously.
What steps can landlords take to ensure electrical safety?
Firstly, be aware of what’s happening in your building by walking through it regularly and looking for changes, such as broken equipment or loose sockets.
- Conduct regular risk assessments, identifying hazards, and broken or faulty electrical equipment, including items such as emergency lighting and sockets.
- Remove, fix or replace broken or faulty equipment as soon as possible.
- Keep records of all actions taken regarding electrical safety.
Fire is a significant risk from electrical faults, so being prepared is also essential, which means:
- Putting systems in place to check regular fire safety procedures
- Compliance with current fire safety regulations, making sure that the suitable alarms, equipment, evacuation procedures and signage are in place to deal with fire emergencies
- Check that fire doors are working correctly and aren’t wedged open.
- Ensure that communal areas aren’t obstructed or used as storage areas and that evacuation routes are clear.
All of this takes time and effort, but, as for all safety issues, prevention is better than cure; it’s crucial to be proactive when managing potential hazards.
Maintaining up-to-date records means regularly reviewing electrical safety, but it will help you should you need to make an insurance claim.
Do you need help keeping on top of block management?
Maintaining electrical safety in communal areas isn’t just about preventing electrical shocks but also minimising fire risk from faulty wiring or appliances.
When inspecting communal areas, you must understand these risks and that risk assessments reflect the level of due diligence needed to address potential hazards. This means regular and comprehensive block inspections.
As a landlord or letting agent, it can be challenging to find the time to keep on top of regular inspections, but at No Letting Go, our estate and block management services provide a comprehensive solution to maintaining safety standards, with inspections conducted at intervals agreed with the landlord to include:
- Fire and Safety
- Fire Assets
- Communal areas
- Estate and block cleanliness and condition
We can also produce bespoke reports to meet a landlord’s specific property or tenancy needs.
If you would like to contact us
No Letting Go – partnering with landlords to keep rental properties safe
At No Letting Go, we pride ourselves on the service we provide to our customers. If you would like to discuss how we can help maintain safety in all spaces of your residential premises, our expert team is ready to offer support and advise you so that tenants and visitors can feel safe in your properties.
Our local support and national networks can also help streamline costs and reduce your workload by running inspection schedules, recording inventories and providing professional advice.
To learn more about our services for landlords and agents, contact No Letting Go today.
Insuring your rental property is just as important as insuring your own home, so here is our guide for landlords to get started on the right track when protecting their rental market assets.
What is landlord insurance?
Landlord insurance protects landlords and their properties from the risks that come with renting out a property. It offers specialist financial protection for a range of scenarios. So, when choosing insurance for your rental property, it’s essential to ensure that these scenarios are covered to avoid financial risk and to protect your ability to let a property.
Why do landlords need special insurance?
For the same reasons that homeowners need insurance, landlords also need insurance. But landlord insurance is specifically tailored to meet the needs and potential risks of renting a property.
Landlord insurance isn’t a legal requirement, but many insurers demand an appropriate level of insurance and tenancy agreements may also stipulate insurance needs.
The right insurance cover helps landlords avoid financial risks. Even though you can’t know what’s happening in your property all the time, at least insurance offers peace of mind that any risk is mitigated because you will have the financial means through your policy to deal with any problem.
What can landlord insurance cover?
Landlord insurance is specifically focused on the kind of risks that landlords can be exposed. Some insurance coverage is standard while other aspects are additional, but this is great for landlords because it allows them to create an overarching policy tailored to their needs.
Landlord insurance policies can cover the following:
- Buildings. It’s important to ensure the policy covers the cost of repairs and a complete rebuild.
- Contents. White goods, furniture, furnishings, fittings etc., lost or stolen. Tenants can insure their own belongings.
- Loss of income. Whether tenants fail to pay rent or the property becomes uninhabitable for a period, the loss of any rental income can be covered.
- Liability. Protecting against compensation claims made by tenants or visitors.
- Accidental damage. For example, breaking a window or putting a foot through the ceiling when in the loft.
- Tenant damage. Tenant deposits can cover the cost of some damage, but insurance can make up any shortfall.
- Legal cover. This can help with legal fees if a landlord has to go, or is taken, to court.
- Emergency assistance. For a broken boiler, split pipes, security, etc.
Multiple rental properties can also be insured under one policy when arranged with the insurer, making it easy for landlords to ensure that all of their properties have the right cover.
How much does landlord insurance cost?
The insurance cost depends on several factors, such as the property’s condition, the number of contents, any extras requested, rebuild expenses, etc.
When choosing your cover, it’s just as important to know what is excluded and what’s covered. A policy may seem cheap, but if it covers only some of what you need, it may be a waste of money because you can’t rely on it in the worst-case scenario.
When thinking about costs, also be aware of the excess charge. Choosing a higher excess may make your policy cheaper, but you might need to pay more for making a claim. Are you comfortable having the money when needed to cover the excess charge?
How do I find the right landlord’s insurance?
Find a policy that covers all you need and factors in any loss of rent. Decide the cover required by the value of contents and cost to rebuild. Also, consider the additional extras such as emergency cover or liability insurance.
You can use comparison sites, insurance companies or a specialist insurance broker to find the best deal, but importantly, seek specialist advice if you need more clarity about the coverage you need. Buying the right insurance is critical for reducing the impact of a potential disaster.
Finding the right insurance is just one of the many tasks facing landlords. If you’d like to discuss how No Letting Go’s local support national network could become your inventory partner, streamlining costs, including insurance premiums, and reducing your workload, then contact No Letting Go today.
Before investing in a House in Multiple Occupation (HMO) property, there are lots to consider. This guide will highlight the key issues to help you prepare to take that step.
What is an HMO?
Your property is an HMO (House in Multiple Occupation) if rented out by at least three people who are not from one ‘household’, such as a family, but share facilities like a bathroom and kitchen.
A large HMO is defined as a property that:
· Is rented to five or more people who form more than one household
· Requires some or all tenants to share toilet, bathroom, or kitchen facilities
· Has at least one tenant paying rent (or their employer pays it for them)
Large HMOs must have a licence if located in England or Wales. However, smaller properties rented to fewer people may still need a licence, and you need to check with your local council.
What responsibilities does an HMO landlord have?
In our blog, we have previously provided A beginners guide for HMO landlords, which provides details of the requirements placed on landlords. These are important because the responsibilities are broad in what they cover and specific in terms of what they require.
One example is that suitable bedroom sizes for HMOs are stipulated, so if you are thinking about applying for a licence, you need bedroom sizes that are at least:
· 6.51 square metres for a person aged 10 or over
· 10.22 square metres for two people aged 10 or over
· 4.64 square metres for a child under 10 years old
Again, this can vary between councils, and you need to understand the requirements in the council authority area.
You must also be aware that the local authority needs to be informed if:
· You plan to make changes to an HMO
· Your tenants make changes
· Your tenants’ circumstances change (for example, they have a child)
These specific demands on HMO landlords are in addition to the more apparent responsibilities like complying with HMO legal requirements, ensuring safety checks, providing furnishings, fixtures and fittings, maintaining communal areas and not allowing overcrowding.
The requirements placed on HMO landlords are comprehensive, so anyone considering investing in a House in multiple occupation property must be clear about them first.
What else do HMO landlords need to know?
Besides understanding their responsibilities, HMO landlords must be aware of their implications. No matter what property you rent, there will be challenges to address. But as an HMO landlord, you may need to consider the following:
• It can be harder to find financing for these types of rentals
• You need to find the right property to convert to an HMO
• Set-up costs can be higher
• Managing multiple tenants can be more challenging
• Tenant turnover may be higher
• Running costs may be higher
• Collecting rent from several individuals will likely present more work
• Maintenance costs can be higher
Making HMO management easier
Despite the potential challenges for an HMO landlord, the potential income is a big attraction. With the right support, the time needed to manage an HMO successfully can be substantially reduced.
The range of services, including pre-, mid- and end-of-tenancy services, offered by No Letting Go means landlords can make navigating the challenges of being an HMO landlord easier, ensure legal obligations are met, the investment is being protected and that tenants are content.
No Letting Go
If you would like to find out more about how the No Letting Go team can cut down on time needed to manage HMO and multiple properties, streamline cost and reduce workload, contact No Letting Go today.
Landlords are raising rents in response to tax changes
It’s been two years since changes to buy-to-let mortgages also changed the way that landlords are taxed. As some had predicted, many landlords have been forced to reconsider their position and think about what the future now holds for them.
How has buy-to-let tax changed?
Before 2017, landlords could deduct mortgage expenses from their taxable profits, including all of the interest they paid for the mortgage on their rental property.
In 2017 this began to be phased out until April 2020. it stopped altogether. This was replaced by a 20% tax credit, which is substantially less for higher rate taxpayers who, under the old system, would have received 40% tax relief.
How has this affected landlords?
These changes in how landlords are taxed have had significant implications for them, with one in three reporting that their portfolio is not as profitable as it was before the changes came in. The same number of landlords have considered selling properties due to the loss of mortgage tax relief.
Apart from the financial impact, the lettings sector is undergoing a raft of changes, with more on the horizon; we recently talked about how the Renters Reform Bill will change things. All these changes and proposals are proving challenging to keep up with, causing 58% of landlords to claim that changing and confusing government legislation is the biggest challenge.
Two options for landlords
In addition to changing legislation, 32% of landlords stated that rising taxes are also a key challenge. To manage the financial impact of these changes, landlords are taking one of two main options – raising rents and selling properties.
25% of landlords said they have increased rents to cover the cost of increasing tax on their tenants, and for landlords with more than 20 properties, this increases to 58% passing on costs.
Around the same proportion of landlords with more extensive portfolios (26%) have reduced the size of their properties to reduce the impact of tax changes. However, the percentage decreases to 13% for landlords with smaller property portfolios.
What does the future hold for landlords?
With more changes to the law on the drawing board that will impact landlords, for example, renting with pets, changes to energy efficiency rating requirements, as well as possible interest rate rises, life for landlords won’t get any easier in 2022.
Ongoing changes and uncertainty in the rental market will continue to have unintended knock-on effects, such as reducing the amount of affordable housing and rental properties on the market.
Despite the challenges, almost 60% of landlords still believe that letting a property is worthwhile. Demand for rental properties is still high, so there is still much for landlords to be optimistic about, so long as they have a realistic business plan, which includes the right support that keeps costs down and maximises occupancy.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, streamline your costs and reduce your workload, then contact No Letting Go today.
Understanding the numerous taxes that apply to landlords and then calculating the amount of tax owed can be complex. To ensure that you meet all your obligations, keeping up to date with tax changes that may affect your income is essential.
In 2022, we’ve already seen buy-to-let tax changes coming into full effect, so what else should landlords be aware of?
Changes to tax
Some changes in UK tax regulations may impact landlords:
Tax on dividends – There is currently a £2,000 annual dividend allowance, but tax must be paid on income from a dividend after this allowance. From April 2022 tax on dividends increased by 1.25%. This means if you pay the basic tax rate, you will now pay 8.75% tax on dividend payments, those paying a higher rate of tax will pay 33.75%, and additional rate taxpayers will pay 39.35% on dividends.
National Insurance – National Insurance contributions have increased by 1.25%. Landlords renting properties as a business venture will see an increase in the NI contribution they must pay on any rental earnings if they exceed the relevant thresholds. It also means that if they employ people in their property business, employer contributions to NI will also increase.
Capital Gains Tax – The timeline for reporting and paying Capital Gains Tax made on profits from selling a buy-to-let property has increased from 30 days to 60 days.
Make Tax Digital – From April 2022, any landlord with a VAT-registered property rental business with a rental turnover below the VAT threshold of £85,000 must now keep digital tax records and report income and expenses figures online to HMRC each quarter as part of the Making Tax Digital initiative.
From 2024 this requirement will be extended to include self-employed landlords completing self-assessments. They will be required to maintain digital financial records compatible with HMRC’s Making Tax Digital system.
More changes on the horizon – 2022 is shaping to be an economically challenging year, with the possibility of higher inflation and recession affecting landlords’ finances.
Inflation, already at a 40-year high, is set to increase. In addition, rising interest rates are likely to continue their upward trend throughout 2022. Any rise in interest rates may concern landlords; if a mortgage is due to be renewed, it may be time to shop around for the best deal.
In addition to financial changes, The Renters Reform Bill will continue to go through the stages of parliamentary approval. Changes, such as proposed energy ratings certificate, carbon monoxide alarm regulations and “Lets with Pets”, mean landlords should be prepared for more changes in regulation and the extra costs they imply.
Preparing for an uncertain future
Making sure you are on top of your existing landlord’s obligations will make adjusting to whatever lies ahead easier because you won’t be in a position where you are already trying to catch up with reforms. Implementing a thorough inventory process is one important step to help you achieve this, providing you with a solid benchmark and clarity in an ever-changing sector.
The right business partner can also help you reduce running costs and ensure optimal occupancy for your properties.
No Letting Go
If you would like to discuss how our local support or national network at No Letting Go could become your inventory partner, streamlining costs, reducing your workload and boosting efficiency, then contact No Letting Go today.