Did you know, there is a reduced rate of VAT for residential renovation or conversion works? [zero-rated for the construction of new houses, approved alteration of listed residential or charitable buildings]. 

Douglas Gordon, Partner of Landed Estates & Rural Business Group says, There is a basic requirement that the works actually have planning permission [underline added] if it is required, since HM Revenue & Customs (HMRC) will argue that there can be no VAT relief where works are carried out unlawfully.

He explains it is a common stipulation that VAT cannot be relieved if there is any restriction on separate use or disposal of the building in any statutory planning consent, covenant, or similar provision (wording might vary from one part of the VAT legislation to another giving rise to yet more uncertainty and litigation).

In one case, a taxpayer renovated a cottage within the grounds of a farmhouse. On the facts, the work qualified for the reduced rate in normal circumstances. It emerged however, that there was a planning restriction on disposal imposed by a previous planning consent dating from the 1930s, which was still in effect. HMRC carried this condition forward into the new permission refusing VAT relief.

Gordon concludes, All projects, of course, must be taxed on their own facts. However, experience shows that a vital part of VAT planning for construction works of all kinds is to check the likely impact of planning law. You need to start with a fairly good knowledge of the use and occupation of the building over the 10 years prior to commencement of the works and a full history of extant planning conditions, backed (as always in VAT) with copies of the relevant documentary evidence.

 

What We Say ~ The Taxman tells us, Tax doesn't have to be taxing! but often it can be. In most cases, residential use can be easily verified with BTL property but don't just simply assume so. A £10,000 renovation could cost you a further £1,750 if VAT relief falls foul of HRMC interpretation of their rules. It is always prudent to obtain full planning history of any property before you start refurbishing.

For further information, please contact: Douglas Gordon, Saffery Champness, London : +44 (0)20 7841 4000 This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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With available, let-able UK property at a low and demand for it at a high, it is not surprising average rents throughout the country went up by 1% in June, the highest level since 2008.

The average provincial rent now stands at £673 pcm, with a London average of £942; rents in the North and North East rose a tad by 1.4% and 1.3% respectively whilst in the West Midlands it dropped a little (-1.7%).

Rental yields (rent income as a proportion of purchase price) also rose to almost 5% as BTL property prices fell a little (-0.25%) and, the annual increase slowed to 8%.

A landlord/investor would have typically enjoyed a healthy £19,000 per property during the past 12-months: a combination of c.40% from the rental income with the balance as capital growth.

Commenting on these statistics, David Brown, Commercial Director of LSL, said,The seasonal pick-up was exaggerated by the squeeze in the supply of rental accommodation. Although landlords weren't clobbered as badly as feared, it is possible that some left the market in the run-up to the Budget and concerns over the new Capital Gains Tax rate dampened the number of new investors entering the market in June.

 

What We Say ~ Since the Emergency June Budget we now know that only higher rate tax-payers are effected by the higher CGT level (see Blog and News, Capital Gains Tax, 22nd & 23rd June 2010).

 

Also, more BTL funding is becoming available as more lenders return to the market (see Blog and News, Banks Lending Again To BTL Sector, 6th July 2010). 

 

When a property is bought from our website saving 25% of market value, typical rental yields of course will rise by 25%. This means you enjoy 6.6%pa, rather than the average 5% on the same property, taking into account its full market value.  

 

So a £100,000 property only costs your £75,000 plus you enjoy a substantially higher rental yield!  Another advantage of acquiring our BMV property is that they tend to be located in high-demand rental areas, so letting should be quicker providing you with more immediate and ongoing income.

 

Check out our website for examples of Available, Reserved and recently Sold property.

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The leading government-authorised tenancy deposit protection scheme, my|deposits, has created a guide for landlords, offering advice on how to make a fair wear and tear judgement call at the end of the tenancy period. 

Wear and tear of course, remains subjective with no hard and fast rules on what is reasonably acceptable: this new guide aims to help landlords consider the different factors involved in the decision-making process. 

The guide also highlights the importance of landlord and tenant talking to each other, especially at the outset of tenancy, when the landlord should set expectations with regard to maintaining the condition of the let. 

After all, there are clear and direct financial consequences for both should a dispute arise at the end of tenancy and the guide explores a number of different areas including length of the tenancy period, the occupants themselves and, looking at the difference between reasonable wear and tear, and damage. 

Eddie Hooker, Chief Executive of mydeposits.co.uk said, Wear and tear is always a hot topic of debate and is very much situation-dependent. We have worked with landlords and our in-house disputes team to compile the guide, which is by no means definitive, but hopefully gives landlords some benchmarks and examples to consider when checking out their tenants.

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Sixteen BMV Properties For Individual Purchase ...

1, 2 & 3 bed Apartments & Houses ...

From £165,000 to £225,000 ...

 

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Register your pre-launch interest ... 

Call John on 01275-846662 or,

 

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The latest report published by Worldwide Property Group revealed that 75% of respondents consider the best first choice for investment, out of all options, is property, which clearly indicates recent government changes in legislation did not affect market confidence. 

In contrast, only 2% of people responding to the June survey would put their money into shares. Even gold received only 17% of the voting.

When asked if the current historically low-level interest rates had increased desire to buy property, two-thirds replied Yes, with 79% saying now is a great time to buy a property in the UK. 

Sixty-five percent of respondents shared the view that property values will continue to increase over the coming year, with 4% believing this could rise by as much as 15-20%. 

Buying overseas property attracted a very respectable 62% of voters actively seeking foreign property opportunity at this time. 

The US, particularly Florida, appealed to many with France (see our Blog and News 5th July, France ~ 100% Loans ...), Cyprus, Spain and Italy also ranked highly amongst those looking for a second home.

Even though the stock market performed well over the past 12 months, it has fallen since mid-April (FTSE 100 losing nearly 1000 points). Property, by comparison, has demonstrated a greater robustness during recent global turbulence, having regained much of the value that was lost over the last 2-3 years (see Blog and News 10th June, Property Prices Creeping Up Says, Assetz). 

The results of the WPG survey clearly indicates UK public confidence is rapidly returning in the property market.

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Combine a lettings market with low stock and, a Buy-To-Let market with not enough competitive mortgages and what do you get? Well you know: more people staying at home (and more ulcers for Mum & Dad)!

Thank goodness the former will get a boost from the greatly improving availability of BTL mortgages predicted as banks turn their heads around and start lending again.  It is predicted that 20 more lenders will soon join the pathetic few (currently 4) offering suitable products for the landlord/investor.

With increasing competition (some of it coming from, would you believe, China) comes more available money at better rates. 

Currently anything over 60%LTV attracts with it a higher lending rate, typically 4.7%APR. Whereas 4.7% works when current rental yields exceed 6% (e.g £470pcm mortgage payment with £600pcm rent) nevertheless any lowering in the borrowing rate means increased cash-flow in your pocket thank you very much.

For the analytically minded amongst you, funding dropped 81% since 2007.  In 2009, it dropped 69% compared to 2008. There is a staggering 1,400 less suitable products on the market than in 2007 but we are pleased to report that this trend is now seriously reversing. 

Professional Landlords, more and more, represent an agreeable risk to lenders who are beginning to view this type of business as increasingly profitable for them.

As recovery in the BTL market continues, we shall all be glad to see lending rates 'tumble'?! 

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Some French mortgage lenders have just entered the market with 100% Loan-to-Value mortgage product and with the new incentive of Stamp Duty paid and tax concessions you can save up to 8% on the property purchase.  Add to this our 25%BMV deals and we predict an imminent boom in French property purchasing by us Brit's.

 

For the 5th consecutive year, International Living magazine has reported France as the NUMBER ONE (out of 30) country to live in taking into account such factors as safety, lifestyle, cost of living, and house prices etc. so whether you are looking for that second home in a tranquil countryside or beach setting or, the bustling metropolis, France offers just about everything. 

 

Brittany for example, is the land of a thousand legends and France's most westerly region.  With easy air and transport links you are no more than a few hours away from the UK as passenger or driver.

 

The countryside is full of little cottages built of stone and slate with the gray granite walls enhanced by the golden splash of heady-gorse or the cloudy blue of a mop-headed hydrangea.

But it's not just the architecture that suggests Brittany (Bretagne) is a land apart. With the peninsula thrusting into the Atlantic like the head of some bizarre sea monster, this is where France seems to fade out and the bewitching Celtic world takes over: if you like Cornwall, you'll love Brittany!

 

No place in the department (region) is more than an hour's drive from the ocean, which offers clear, aquamarine seas, stunning rock formations, secret bays, huge expanses of sandy beaches and, little harbor towns, which in a former lifetime were feared as pirate strongholds. 

 

You can go inland and enjoy lakes, forests and moors.  Or, as you meander down lanes, you are taken back-in-time as you visit numerous secluded villages and hamlets always greeted with traditional hospitality.

In this time-lagged land you will feel the easy, carefree pace of your childhood, enjoy the warmth of the local people and partake of Kouign Aman (a sweet sticky traditional Breton cake) with strong French coffee.  

 

Lay back, stretch, and breath in lungfuls of fresh, clean Ozone.

 

Do call to chat your options through. 

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