Will buy-to-let owners get 10% tax break?

The latest changes to capital gains tax will grant those selling a business a 10% tax rate on the first £1m they make when they sell-up.

Simon Lambert, This is Money - 26 January 2008

This has almost halved the 18% tax entrepreneurs would have faced under plans to introduce a flat capital gains tax rate for all – but the Government seems set on excluding Britain’s biggest entrepreneurial movement: buy-to-let landlords.
While the details of the relief have yet to be released, indications are that investors in residential property will be specifically not be classed as entrepreneurs - full article

New edition of bestselling book on the buy-to-let market

With property prices cooling, most people are reluctant to invest in residential property. Leading property expert David Lawrenson argues that NOW is precisely the moment to act and invest in buy-to-let because a slower housing market means there are more opportunities for a bargain to be found and a strongly increasing demand for rental accommodation is pushing rents up. In his completely revised and updated edition of Successful Property Letting – How to Make Money in Buy-to-let, Lawrenson outlines everything you need to know about property investment and letting.

AUTHOR’S COMMENTS ON THE RESIDENTIAL PROPERTY MARKET

Is it too late to get into the property market and is this a bad time to invest?

When house prices take a breather, there is a huge opportunity for the serious property investor because property can be bought at lower prices. Many professional investors have been waiting for a time when they know that vendors will be willing to listen to offers. Investor landlords also know that many would be property buyers are unnerved by media talk of an unstable housing market and will choose to rent instead of buying, thus pushing up demand for rented accommodation and hence rental incomes. In the longer term a rising population and lack of housing will push up both house prices and rents.

Continue reading New edition of bestselling book on the buy-to-let market…

Capital Gains Tax Changes

One of the key factors of Alistair Darling’s pre-Budget Report was the proposal to dramatically change Capital Gains Tax. The detailed rules have just been announced and it is confirmed that Taper Relief is to be abolished and the benefits of indexation are to be cancelled from 6th April 2008. A flat Capital Gains rate of 18% has been proposed from then onwards. Relief will however be available for entrepreneurs selling their businesses with the first £1,000,000 of gain being taxed at only 10%.

No changes are proposed for private residences exemptions, lettings relief, business holdover or rollover relief, and losses brought forward are still available as before.

Indexation was introduced as a way of dealing with inflation to ensure that only gains above the rate of inflation were taxed. This was available from March 1982 to April 1998. Where assets were held for the full period, an uplift of up to 105% was given, reducing the potential Capital Gains considerably. The proposal is that this is now to be wiped out.

However, there appears to be a way of retaining indexation without triggering a Capital Gains charge.

Continue reading Capital Gains Tax Changes…

Floods blacklist threat from new map

Nearly half a million households have been warned their insurance premiums could rocket by as much as 30% when the government introduces a revised flood map this year. Sunday Times.

Property Week - 28 January 2008

Environment Agency maps at present show 500,000 homes at high risk of flooding - with a 1 in 75 chance of a flood in any year. However, the new maps, which will include floods caused by poor drainage, could double the number of homes in that category to 1m, according to consultants - full article

Buy To Let: Landlords defy gloom in the housing market as rental yields rise

Growing demand for rented accommodation has resulted in higher costs for tenants and a healthy increase in returns for landlords.

The Independent - Sunday, 27 January 2008

Buy-to-let specialist lender Paragon Mortgages reports that rental incomes in the UK rose by 2.5 per cent during the past month, bringing the annualised rate of growth to 19.4 per cent. Tenants are paying £965 on average a month, compared with £808 a year ago.

The buoyancy of rental income offset the cooling in the rate of house price inflation and led to an increase in yields last year. Having been steady at 6 per cent for five months, December saw average gross yields rise to 6.2 per cent - full article

Home economics: house prices and stock market turmoil

A week of turmoil on world equity markets and somewhat drastic action by the Fed to try to avert a recession in America will have done little to bolster the confidence of housebuyers here

The Sunday TimesJanuary 27, 2008

A week of turmoil on world equity markets and somewhat drastic action by the Fed to try to avert a recession in America will have done little to bolster the confidence of housebuyers here. Although the fundamentals of the British housing market remain intact, there is a lack of confidence, which has led to a sharp fall in the number of properties that have changed hands over the past year. Prices, however, have not been so adversely affected. Most recent indicators have reported a slowdown in the rate of growth, with only small, localised price falls - full article

Toddler died - boiling hot water crashing through ceiling.

Dear Editor

I thought your readers may be interested to know about the real cause of this tragic accident. This is the third death in as many years.

The hot water system that has failed relates to copper hot water cylinders, the type found in most airing cupboards. When the thermostat fails to a boiler or immersion heater obviously the water can reach boiling point, if this happens the water expands quickly and enters the cold water storage tank (cistern) which is usually located in the roof space, above the airing cupboard.

However it must be noted that in the cases of the deaths the cold water tank was situated above the bathroom.

Continue reading Toddler died - boiling hot water crashing through ceiling….

LandlordZONE Newsletter - January 2008

Issue 26 - Gas Checks - In this issue we look at some of the important aspects of ensuring that gas is safe in your properties.

Download the full Newsletter

Welcome from the Editor:.

Happy New Year everyone—let’s hope it’s a good one for landlords, though the signs are it’s a likely to be very tough in the economy for everyone: landlords, businesses and consumers alike.

The commercial sector seems to have taken the biggest hit so far with CB Richard Ellis reporting a 4.1% drop in values in December alone and 10.3% in Q4 2007.

Couple this with tough trading conditions going forward and it doesn’t appear that we have reached the bottom on the high street yet.

Those investors who helped pump £5billion into commercial property funds over the last 2 years—the likes of New Star, Norwich Union and Scottish Widows funds—have lost 15 to 20% of their value. REITs have faired even worse—British Land and Land Securities REITs have fallen by 44.9 and 35.2% respectively.

Residential property values have so far faired better. But with UK house prices the most overinflated in the world, according to research by Policy Exchange, a correction or at lease a long “flat” market seems inevitable.

House prices in Britain have risen for 13 years on the run with average prices going from £70,000 in 1997, when labour came into power, to just under 200,000 today—a rate of more than 4% above inflation—a compounded increase of around 180%

Historically, values go in 20 year cycles and it’s unlikely to be different this time. But despite the gloom and the pain felt by Northern Rock and Paragon Mortgages, it’s possible the liquidity crunch, which has brought far more expensive mortgages, may yet be contained?

Continue reading LandlordZONE Newsletter - January 2008…

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Rental market hots up

Landlords do not need to wait for ditherers in the current market.

There’s nothing like a cooling sales market for getting the rental market in a fever. The present slump in property prices is no exception, as both buyers and sellers lose their appetite for market adventure and turn to the safer rental waters - and that is forecast to continue over the next 12 months.

Kasia Maciejowska, The Times 18th January 2007

Teresa Wallis, the area manager at Savills in Sevenoaks, Kent, says: “The countryside lettings market has been very busy, with back-to-back viewings and lots of new properties coming to the market.”

In London it has been a similar story, although buoyant sales have kept the rental market quieter. However, that could change suddenly, as Tim Hyatt, Knight Frank’s residential lettings expert, notes: “It can react by the day to economic changes.” full article