Feeling the squeeze? Talk to us

Amid turbulent times in the residential lettings market, landlords may be forgiven for feeling unsettled.

Reeling from higher mortgage rates and the cost-of-living crisis, landlords also face higher taxes as well as a plethora of new rules and regulations.

But before you head for the door, why not let our expert property managers at Caxtons share their extensive local knowledge and show you how to turn your business around. There has never been a better time to employ professional property managers.

We analyse market rentals, economic conditions, landlord obligations and current legislation. We work with you to draw up a plan tailored to your individual needs. We market your property, interview prospective tenants and undertake all the relevant checks.

“We are committed to finding the right tenant at the right price to care for your residential letting and there is always someone on hand to offer expert advice about your property” says Debbie Pennell, Regional Head of Residential Lettings & Property Management at Caxtons.

For example, we were approached by a landlord with a 2 bedroomed semi in a lovely location in Higham, Kent. Yet the tenants had been paying a rent of just £390pcm for many years. The property was in a poor decorative condition.

Once the property became vacant, we advised the landlord to undertake an extensive refurbishment and we managed the project from start to finish. The end result was a beautifully restored house.

We advised our client on what the full market rent should be and moved a new family in, increasing the rental income to £900pcm.

Top of landlords’ list of worries right now, as borne out by surveys, is the cost of living crisis. The jump in mortgage interest rates, as well as higher maintenance and insurance costs, are eating up rental profits. Landlords are feeling the pinch.

While higher rents go some way to meeting these costs, landlords are also worried about tenants being unable to pay. This is where it helps to employ property managers such as Caxtons.

“We step in as soon as possible to nip problems like these in the bud. For example, we work with tenants to set up payment plans on outstanding balances,” says Debbie Pennell.

Meanwhile landlords are also facing higher taxes, particularly if they sell up. For example, the amount the Treasury takes in Capital Gains Tax – which for landlords means tax on the gain in value of a rental property between the buying price and the selling price – is rising.

The CGT annual exempt amount was cut from £12,300 to £6,000 in 2023 and is being reduced to £3,000 from April 2024. This means that landlords who pay income tax at the basic rate will pay an extra £1,674 in CGT when they sell their property, while those on the higher rate will pay an extra £2,604.

 

Overwhelmed by legal changes?

Sweeping reforms are being introduced under the Renters (Reform) Bill in what has been described as the biggest shake-up in the sector for 30 years.

The renters reform measures are designed to “bring in a better deal for renters”, as well as enable landlords to evict those “who wilfully do not pay rent or exhibit anti-social behaviour”.

The proposals included abolishing fixed term tenancies and introducing new rolling Assured Tenancies. This will enable tenants to move out of sub-standard accommodation without being held liable for the rent until the end of the contract. It will also make it easier for them to move if they need to.

The Government wants to give tenants stronger protection against backdoor eviction by ensuring they can appeal against “excessively above-market rents which are purely designed to force them out”.

However, proposals to scrap Section 21 “no fault” evictions have been kicked into the long grass, pending reform of the court system. This means that landlords can, for the moment, still use the existing evictions system.

The Government is also planning to apply the Decent Homes Standard to the private rented sector for the first time. These are legal safeguards designed to ensure that landlords keep homes free from serious health and safety hazards and in a good state of repair.

Other reforms include making it illegal for landlords to impose blanket bans on renting to families with children or those on benefits and making it easier for tenants to keep pets.

Further new rules affecting the short-term let industry are being introduced under the Levelling Up and Regeneration Act. The Government is to create a new licensing scheme for short term lets, in future planning permission will need to be granted for new holiday let accommodation. Also being proposed is a plan to scrap tax breaks; holiday let owners can currently claim capital gains tax reliefs. The aims of these rules include ensuring decent standards and tackling the problem of local residents being priced out of residential rentals in holiday hotspots.

 

Watch the fine print

The Government has now shelved its energy efficiency targets for rented properties that would have compelled landlords to upgrade their properties to ensure they reached an Energy Performance Certificate (EPC) of at least a C rating by 2025 for new tenancies, and by 2028 for all tenancies.

But, did you know, that in 2020, a new mandatory electrical installation inspection came into effect for all new tenancies (starting on or after 1st July 2020) in England?

This obliges landlords or their agents to have all electrical installations in rental property inspected and tested by a suitably qualified electrical technician at least once every five-years.

Letting a property is a heavy responsibility and a burdensome task for anyone not employed in the business and the penalties for getting it wrong are stringent”, says Debbie Pennell.

 

Let us take the stress out of property management

Our residential lettings professionals receive regular training to ensure they are up to date with constantly changing legislation. They can help take the hassle out of managing your property.

We are seeing increasing numbers of ‘self-manage’ landlords turn to us to manage their properties because they have struggled to maintain the workload themselves.” Says Debbie Pennell.

We offer a flexible service, leaving landlords free to opt for just some of our lettings services, or choose full property management.

 

Our lettings services range from initial rent appraisal and tenant interviews, through to gas safety checks, electrical certificates, tenancy Deposit Scheme administration, insurance claim handling and tenant check-out.

Caxtons’ residential property management service includes:

  • Managing the property on a day-to-day basis with quick and easy repair reporting for residents.
  • Rent collection and arrears recovery using specialist local solicitors.
  • Obtaining and ensuring compliance with fire, general health & safety, and other statutory risk assessments.
  • Instructing and paying suppliers and service providers.
  • Specifying and handling major repair, redecoration and other cyclical works.
  • Residential rentals rent reviews.
  • Providing building and other property related insurance.
  • Portfolio enhancement and investment purchases.
  • Preparation of evidence for, and attendance at, court and First-tier Tribunals.
  • Insurance renewal and claim handling.

 

At Caxtons, we see it as our duty to maintain high regulatory standards for all our clients.  You can rest assured that our property professionals are fully trained and follow industry best practice.

Our experts know the local market like no others and can work with you to tailor a plan to turn your business around.

If you would like a chat with one of our friendly property managers, contact us today.

 

 

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