Category Archives: Useful Information

Empty Properties Affected By Changes To Council Tax

As from April 1st 2013, local authorities will have the discretion to charge full Council Tax on empty properties.

The change will affect properties that have currently been given exemptions and discounts, including properties for sale and rent, and second homes.

Owners of properties that are empty because of building work will also lose the automatic right to be let off Council Tax for up to a year. Many councils have decided to charge the full amount from day one.

These are the exact changes:

1. Exemption class C (properties that are empty and unfurnished for up to six months) has been abolished and each council can decide whether to award a local discount in its place

2. Councils can decide to charge an additional premium of up to 50% on homes that have been empty and unfurnished for two years or more

3. Exemption class A (properties requiring or undergoing major repairs for up to 12 months) has been abolished and each council can decide whether to award a local discount in its place

4. The minimum discount that councils can give for furnished homes that are no one’s ‘sole or main residence’ – i.e. second homes and unoccupied furnished lets – has been reduced from 10% to 0%.

Local councils vary in their approach. For example, some are charging full Council Tax from day one, while others are allowing a short ‘grace’ period of perhaps a month and then either levying full Council Tax or a proportion of it for the next five months.

Southwark Council in London is allowing empty, unfurnished properties to be exempt for two months, after which the full charge is applied. However, there is no exemption at all for empty, furnished rental properties. On properties empty for two years or more, it will charge a ‘premium’ of 50%.

Spelthorne Council is giving a one-month exemption to empty, unfurnished rental properties, and then giving a 50% discount in month two, followed by a 25% discount in month three, followed by no discount. It, too, will be charging 150% Council Tax on properties empty for over two years.

Information as to what each local council has decided should be on their websites. It should not be assumed that neighbouring councils will have adopted the same pricing policies – it is unlikely.

The local authority in question will have to be notified promptly of empty periods – which could mean having to notify the council of an empty rental property on the day that tenants move out, even if it is going to be vacant just a very short while.

Important EPC Changes

The Energy Performance of Buildings Directive is an EU measure designed to tackle climate change by reducing the amount of carbon produced by buildings.

The requirements of the Directive were implemented on a phased basis by the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007.

Key requirements were:

  • energy performance certificate to be produced on the sale, rent or construction of a building
  • display energy certificate to be produced and displayed in large public buildings
  • air conditioning equipment above a certain size to be inspected regularly

Changes have been made to the regulations, to transpose the requirements of a recast of the Energy Performance of Buildings Directive in England and Wales. The main requirements will be introduced on 9 January 2013 and are summarised below:

  • property advertisements to include details of energy performance certificate rating where available
  • no longer a requirement to attach front page of the energy performance certificate to written material
  • extension of current requirement for a display energy certificate in large public buildings, to public buildings above 500m². Unlike buildings larger than 1,000m², display energy certificates for smaller public buildings will be valid for 10 years
  • energy performance certificate to be displayed in commercial premises larger than 500m² where one has been previously issued

The guidance documents have been revised to reflect the changes and can be viewed via the links above.

The new regulations consolidate all existing regulations which have been revoked. They are available at legislation.gov.uk

 

 

Tips On How Not To Sell…

(or Rent)…

A client asked if I could take a look at a property today as it had been struggling to sell, despite it being for sale with two estate agents for quite some time. In fact it had been for sale for over a year!

It didn’t take too long to realise what the problem was at this particular property.

Now let me think what could be wrong? (Hint: There is a For Sale board in the garden).

How Not To #1

Tend to garden, especially around marketing materials…

How Not To #2

Place board in upright position. It makes it easier to spot…

How Not To #3

Take seasonal photographs. Well it’ll be winter again soon…

So the property isn’t a great one and the price isn’t competitive either, but the seller told me of a willingness to adjust this.

The marketing is a shambles. One For Sale board hidden, the other laid flat on the floor, photographs from a year ago.

And if the agents reading don’t like it – sorry guys, but it’s real!

For more information on how to effectively market your property, call the experts!

Due to popular demand, I have decided to keep this article updated if I see any further ‘tips’ whilst out on my travels. Watch this space!

For Honest Mick’s own article on For Sale & To Let boards, see THIS amusing article.

How Not To #4

Don’t display a closed sign when you are open. I was going to go in and buy a dozen…

How Not To #5

Ensure board is at visible height. Feet don’t buy… (or rent)…

How Not To #6

Always make an effort to tidy the bins and make sure the guest mattress has been put away prior to viewings…

How Not To #7

If it says ‘Prestige’ at least try. Don’t bolt a sign to a lamp post and chuck the ‘luxury’ description behind a dead end sign…

How Not To #8

If you are asked to sell something that looks like this – REFUSE!

How Not To #9

Tenants like to know a place is secure. Whether you need to make it this obvious I’m not so sure…

How Not To #10

If you are not the green fingered type, flick through the Yellow Pages under ‘Gardeners’…

How Not To #11

A real ‘half hearted’ attempt. Sometimes thinking ‘that’ll do’ is nowhere near good enough, especially in todays market…

How Not To #12

And when you get that eagerly waited success and secure a tenant, always ensure you do thorough references…

How Not To #14

Interior photographs are always great, but let’s not do them for the sake of doing them…

How Not To #15

Well actually, when this was spotted I thought, if there was an award for ‘Most Difficult Sale of the Year’…

How Not To #16

Always try to be on the winning side…

Watch this space for more…

 

The Cost Of Living Compared – To Rent Or Buy?

Buying a property is almost certainly going to be the biggest financial commitment anyone makes. But how does the cost of living compare if you are a tenant or a homeowner with a mortgage?

For many people owning their own home is essential. In this country renting has traditionally been seen as an option for students and young professionals who need flexibility and also the ability to save up for a deposit for that all-important mortgage.

To Rent or Buy?

For most people the ultimate aim is to buy. The potential uncertainties of renting don’t appeal to families. The associated costs can add up to scarily high numbers but buying and taking on a repayment mortgage does mean that, if all goes well, you will own your own home outright at the end of the mortgage period.

Not only will you no longer have to pay the mortgage every month, but you will own a sizeable asset that will help to bring security to the family finances.

By comparison, renting long term means you have nothing to show for it in the end, despite possibly paying many, many thousands of pounds in rent.

In recent times, however, renting has become more popular as more people find it difficult to get on to the property ladder. Renting does have its own benefits that might have been overlooked in the past.

One of the obvious financial benefits of renting is that you don’t need to save up for a big deposit. In the current financial climate the best mortgage rates are available to borrowers with the biggest deposits. If you live in one of the more expensive parts of the country for property, and need 25% or more of the house price as a deposit, this can mean having to save up tens of thousands of pounds, which is no easy feat.

Buying a property also means paying legal bills, surveyor fees and possibly stamp duty if your new home is above the threshold – all upfront expenses that you avoid if you are renting.

As a tenant you will need to give a deposit to your estate agent or landlord, but this is generally a number of weeks rent, say four or six, instead of a huge lump sum.

As a homeowner you will have sole or joint responsibility (with a fellow freeholder) for the upkeep of your property. It is wise to build up a contingency fund to pay for repairs. Ongoing maintenance may seem expensive but can save money in the long term. An annual check on your roof and gutters, for example, might spot a potential problem before it develops into a damaging leak.

By comparison, being a tenant means you are not responsible if anything goes wrong with the property. A potential financial disaster, such as repairing a leaking roof, won’t have to be paid for by you but by the owner. The same goes for maintenance issues, though you do of course have a responsibility to keep the property in good condition.

Rental properties can come furnished, which also means you don’t have to buy furniture. The cost of sofas, tables, chairs, beds, wardrobes and chests of drawers can quickly add up. Then there’s all the multitude of smaller things that a home also needs. Buying items such as a toaster, kettle, crockery, pots and pans can be expensive. White goods are generally included in both furnished and unfurnished properties, which saves you having to splash out on an array of kitchen appliances.

If you need to kit out your own new home with white goods then a washing machine, dishwasher and fridge freezer can easily cost more than £1000 at a time when you have other major expenses to juggle.

The general cost of renting and buying will largely depend on where you want to live, with prices fluctuating wildly between different parts of the country and within towns and cities.

Renting gives you plenty of flexibility in terms of where you stay, for how long and with how many people. It may be possible to rent in a cheaper area which allows you to save up for a deposit for your own home. Alternatively, you might flat – or house – share with a larger number of people to be able to live in a nicer area than you might otherwise be able to afford.

For example, a cottage in the countryside might be out of your price range, but renting a house there with others may well be affordable.

Due to the costs of buying and selling, renting is particularly attractive for younger people who have not yet settled down. If you want to explore living in different cities, need to move for your job or are thinking about a career break to travel then the flexibility of renting is ideal.

The appeal of buying, however, is strong for most people and ultimately likely to be more cost effective in the long run, especially if your property goes up in value.