Mortgage interest tax relief is set to be gradually cut back over the next few years, so by 2020/21 the maximum tax relief a landlord will receive is 20%. Landlords have to pay income tax on their rent regardless of their employment status. They will need to complete a tax return annually, declaring the income they have received over the year.
We like to tackle these changes with our landlords; it would be false economy for a landlord to think that cutting out the agent will save money.
At Dexters, we work in partnership with all of our landlords and collect our fee on a monthly basis. Many agents take their fees upfront and then have less interest in supporting the landlord throughout the tenancy.
There are a number of things you can do to save on later costs. Dexters Group Lettings Director Alex Harrington suggests: "Prior to letting out a property, spend time making sure it's presented to the best possible standard and then proactively maintain that condition throughout the tenancy. Simple and neutral decoration is advised, with fittings that are easy to repair and replace if required.
By carrying out regular inspections, you can prevent costly issues from escalating. A professional managing agent can help with this part of the job and, through use of their trusted contractors, you can be confident that the work is of a high standard."
Dexters manages properties ranging from individual houses to blocks of flats for over 18,000 landlords across all areas of London. We have an extensive team based out of our offices in the capital, all of whom come from the property sector and know their local area inside out. We offer a Rent Managed Service, a Fully Managed Service and a Premium Service to cater for varying levels of involvement. Whatever your requirements, our aim is to take the time, worry and hassle away from being a landlord.
To learn more about Dexters property management services, click here.
David Miles, professor of financial economics at Imperial College London, suggested the arguments put forward by the government for raising stamp duty for second homes were “bogus and mistaken”. The 'Paragon great buy-to-let market debate 2017' panel also discussed the incoming changes to personal income tax relief for landlords, which will take effect from 1 April 2017, and mean the amount of tax relief landlords are able to receive on residential property finance costs will be restricted to the basic rate. Mr Miles predicted a private landlord affected by both taxation changes might need rent to be between 20 to 30 per cent more to get the same rate of return.