Written By Em

Em

Em Morley

The Queen’s Estate makes Record Returns

Published On: June 21, 2012 at 3:08 pm

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Mounting farmland values, and a rise in demand for central London retail spots, have aided the Queen’s property portfolio to make record-breaking returns this year.

The Crown Estate is the company that owns and manages the monarch’s land and property in the UK. They made a net profit of £240.2m in the first three months of the year. This 4% annual growth highlights the worth of the sovereign’s assets, including large portions of London’s Regent Street, and 106,000 hectares of countryside.1

The capital value of the Crown’s properties reached £8 billion for the first time this year, an 11% rise on 2011. Total yields of 16.8% mean that the Crown Estate has outpaced the IPD index industry benchmark by a staggering 10.4%.1

The Queen's Estate makes Record Returns

The Queen’s Estate makes Record Returns

Chief Executive of the Crown Estate, Alison Nimmo, says: “Our super-prime portfolio and active asset management have been the cornerstones of this strong financial performance and resilience during recent market volatility.”1

The rural assets of the Crown witnessed strong progress during the year, making total returns of 19.5%. They experienced a 13.3% rise in value, to £1.2 billion, and £25.9m in revenue.1

Farmland values have surpassed most other areas of the UK land and property market in the last few years, reaching a record high of £6,156 per acre in 2011.1

Nevertheless, the company’s marine estate has performed best out of the Estate’s three core divisions. Marine assets include the seabed for 12 miles from the shore, and large portions of beaches in the UK.

The value of the marine estate has been fuelled by added investment in offshore wind farms, and a high demand for dredged aggregates for the construction trade. The value has increased by 23.6% to £725.6m, and makes £55.6m revenue.1

The portfolio belongs to the monarch for their time on the throne, but does not comprise Buckingham Palace, Windsor Castle, or the Balmoral Estate, which are owned by the Royal Family.

The Queen cannot buy or sell assets belonging to the Crown Estate, but does take a share of the company’s revenues.

An agreement made in 1760 between King George III and the Government determined that the Crown Estate manages the portfolio, with additional revenue going to the Treasury. The Treasury then makes an agreed annual payment to the monarch.

However, this arrangement was abolished in 2011, with the Sovereign Grant Act taking its place. This means that the monarch receives 15% of the Crown Estate’s revenues.

1 http://www.ft.com/cms/s/0/649e3640-b944-11e1-b4d6-00144feabdc0.html#axzz3RXdM3PZS

 

It Costs £200,000 More to Rent, says Barclays

Published On: June 20, 2012 at 2:31 pm

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The amount of people renting, and the average age of first time buyers has risen, partly due to the banks’ refusal to lend during the recession.

High house prices are also pushing people off the property ladder. Barclays conducted research on the matter, and revealed that it costs tenants £194,000 more to occupy an average home than owner-occupiers, over a 50 year period.1

It Costs £200,000 More to Rent, says Barclays

It Costs £200,000 More to Rent, says Barclays

Barclays did not even include capital appreciation in their study, but did take mortgage repayments and maintenance costs into account. Ownership, they found, costs about £429,000 in 50 years, whereas renting the same house would cost £623,000 in the same period.1

The bank used Land Registry figures for house prices and deposits. They also added in Stamp Duty, and solicitor’s fees of £1,200 when determining home ownership. The bank estimated yearly maintenance expenses of 1.25% of the initial property value, and they expected annual building insurance to increase with inflation each year.1

House prices were also projected to grow with inflation.

LSL Property Service’s buy-to-let index, and FindaProperty amounts determined rental costs, which they also predicted will rise with inflation.

The calculation is as accurate as it can be, regarding the undeterminable factors that could influence the costs.

The bank is also introducing a new mortgage scheme designed to help parents aid their adult children to escape generation rent. The Family Affordability Plan will take into account both the parents’ and adult childrens’ earnings.

Head of Mortgages at Barclays, Andy Gray, says: “The cost of stepping on or moving up the housing ladder can be a big barrier for many, but the long term benefits hugely exceed the initial expense. Not only will you save money by becoming an owner-occupier, but you will also own a substantial asset once your mortgage is paid off.”1

If this is taken into account, the lifetime gain of owning your own home trebles to £595,000.

1 http://www.landlordexpert.co.uk/2012/06/19/barclays-bank-say-it-costs-nearly-200000-more-to-remain-a-tenant-for-life-than-it-does-to-buy/

 

 

Landlords need Tax Incentives to Lower Rents

Published On: June 19, 2012 at 11:14 am

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Categories: Landlord News

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Estimates from The Joseph Rowntree Foundation have predicted a bleak future for young, would-be homeowners.

Their calculations estimate a staggering 1.5 million further 18-30 year olds will be unable to afford their own property within the next 8 years, saturating the rental market as a result.[1]

Homelessness

Predictions suggest that homelessness for people under the age of 25 will increase to around 81,000. Worryingly, The Joseph Rowntree Foundation also suggests that 500,000 young people could be forced into living with their parents into their 30s.[1]

The Foundation is urging action to be taken in order to improve the rental market, or risk up to 400,000 people being excluded completely.[1]

Incentives

Taking international examples as their guide, Joseph Rowntree has called on more financial incentives to be offered to assist the rental market. Landlords offering cut-price rates and longer term tenancy rates are just two proposals that the foundation believe will encourage the rental market.

Landlords need Tax Incentives to Lower Rents

Landlords need Tax Incentives to Lower Rents

 

Lead author of the estimate report David Clapham said: “With 1.5 million more young people no longer able to become homeowners by 2020, it’s vital we take the opportunity to make renting work better.”[1]

In order for this to be achieved, Clapham believes: “We need strong political leadership that is willing to work with both landlords and tenants to make it more affordable and stronger for generation rent.” He claims: “Young people are at a double disadvantage,” stating that “it takes longer to raise enough for a deposit and their wages are generally lower.”[1]

Cost

Clapham went on to underline the problem, stating: “There are simply not enough homes and those we do have cost too much to rent or buy.”

He also warns: “While more housing would help address this, it may not come quick enough for young people forced into renting in eight years time.”[1]

Programme manager of The Joseph Rowntree Foundation, Kathleen Kelly, stated that for the forseeable future “renting is likely to be the only game in town and young people are facing fierce competition to secure a home.” She warns that urgent action is needed to “avoid turning a housing crisis into a homelessness disaster.”[1]

[1] http://www.landlordexpert.co.uk/2012/06/19/uk-landlords-need-tax-incentives-to-be-able-to-lower-rents/

 

Tax investigation to hit landlords

Published On: June 14, 2012 at 5:00 pm

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An investigation targeting tax evasion from landlords has been announced by HMRC. The investigation, promising to recover up to £17m in unpaid taxes, is due to begin shortly. Despite this, it is unclear what has prompted the arrangements.

 

Confusion

The original announcement stated, ‘a new taskforce to tackle tax evasion on property transactions was announced today by HMRC.’[1] This sparked confusion in some quarters, as the title of the piece, ‘HMRC targets property rentals,’ then refers to transactions, commonly used in sales and not lettings.

 

Tax investigation to hit landlords

Tax investigation to hit landlords

 

 

A large taskforce

The scheme is firstly focusing on private landlords in a number of regions, including East Anglia, London and Nottingham. If successful, the scheme can be rolled out across the U.K

Stephen Barratt, private client director at James Cowper, believes that the net is tightening on landlords that have been unscrupulous regarding tax. Mr Barratt said that, ‘landlords can reasonably expect HMRC to gather information from across government departments and many other sources including press and internet advertisements, universities and colleges.’[1]

Barratt went on to say that, ‘increasingly sophisticated techniques,’ employed by the Government mean that those paying insufficient tax going undetected are, ‘rapidly vanishing.’[1] James Cowper believes that on top of looking unpaid tax, HMRC will also look to recover unpaid VAT.

 

Unaware

It can be suggested that the scheme will uncover landlords who were simply unaware that VAT is charged on certain properties. These types of landlord are thought to be those who offer temporary accommodation, for example to seasonal workers or students. In these instances, the landlord may not be registered for VAT when they should be and therefore could be facing a backdated claim.

 

Advice

James Cowper has offered advice to those landlords fearing that they may owe outstanding tax. This advice includes not approaching HMRC directly without speaking with a tax advisor. Furthermore, the firm has appealed to landlords to not simply ignore the crackdown, saying that the HMRC is already likely to be aware of those landlords in arrears. Any attempt to rebuff payments could result in a more-hefty fine.

[1] http://old.lettingagenttoday.co.uk/news_features/Taxman-goes-after-landlords-but-drops-no-clues

 

 

 

Taxman Targets Landlords

Published On: June 14, 2012 at 10:47 am

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Categories: Landlord News

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An investigation targeting tax evasion from landlords has been announced by HM Revenue & Customs (HMRC). The announcement, promising to recover up to £17m in unpaid taxes, is due to begin shortly. Despite this, it is unclear what has prompted the investigation.

Confusion

The original announcement stated: “A new taskforce to tackle tax evasion on property transactions was announced today by HMRC.”[1] This sparked confusion in some quarters, as the title of the piece, HMRC targets property rentals, then refers to transactions commonly used in sales and not lettings.

Taxman Targets Landlords

Taxman Targets Landlords

A large taskforce

The scheme is firstly focusing on private landlords in a number of regions, including East Anglia, London and Nottingham. If successful, the scheme can be rolled out across the UK.

Stephen Barratt, Private Client Director at James Cowper, believes that the net is tightening on landlords that have been unscrupulous regarding tax. Mr Barratt said: “Landlords can reasonably expect HMRC to gather information from across Government departments and many other sources including press and internet advertisements, universities and colleges.”[1]

Barratt went on to say: “Increasingly sophisticated techniques,” employed by the Government mean that those paying insufficient tax going undetected are “rapidly vanishing.”[1] James Cowper believes that on top of looking unpaid tax, HMRC will also look to recover unpaid VAT.

Unaware

It can be suggested that the scheme will uncover landlords who were simply unaware that VAT is charged on certain properties. These types of landlord are thought to be those who offer temporary accommodation, for example to seasonal workers or students. In these instances, the landlord may not be registered for VAT when they should be and therefore could be facing a backdated claim.

Advice

James Cowper has offered advice to those landlords fearing that they may owe outstanding tax. This advice includes not approaching HMRC directly without speaking with a tax advisor. Furthermore, the firm has appealed to landlords to not simply ignore the crackdown, saying that HMRC is already likely to be aware of those landlords in arrears. Any attempt to rebuff payments could result in a more hefty fine.

[1] http://old.lettingagenttoday.co.uk/news_features/Taxman-goes-after-landlords-but-drops-no-clues

 

 

 

 

Tenants More Comfortable with Accredited Landlords

Published On: June 14, 2012 at 9:14 am

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Categories: Landlord News

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Tenants More Comfortable with Accredited Landlords

Tenants More Comfortable with Accredited Landlords

51% of tenants are more likely to move into a rental property if they know the landlord is dedicated to professional development and accreditation, says the National Landlord Association’s (NLA) first Quarterly Tenant Index.

Being accredited with the NLA guarantees landlords have thorough knowledge of the rules and regulations of the letting industry. The NLA’s national scheme ensures tenants in England and Wales recognise quality landlords who are committed to professional development. The scheme also offers free and regular local meetings.

However, just 19% of tenants are aware of whether or not their landlord is accredited.

Chairman of the NLA, David Salusbury, says: “Accreditation is an effective way for landlords to develop their professional capabilities and, as our research shows, is a credible tool for marketing to tenants.

“Accredited landlords are required to dedicate time to attending courses and local meetings and to commit to continued professional development. This investment in time and knowledge is what sets accredited landlords apart from the rest; they have knowledge of the various acts of parliament as well as the local regulations that apply to their properties and tenants.

“Qualified landlords should shout about their accredited status. A good landlord cares about their tenants, their properties and their business.”1

1 http://www.landlords.org.uk/news-campaigns/news/tenants-favour-accredited-landlords