Thursday, 21 August 2014

Do You Need Non-Standard Property Insurance?

Do you live in an unusual property, such as a treehouse (or mansion!) a converted barn or a home with a thatched roof? If so, you will not be eligible for the typical kind of home insurance and you will need to consider other alternatives.

If you live in a non-traditional property you might find it very difficult to get house insurance at a reasonable price. It can be even worse if you have already been turned down for insurance by a company or you have made claims already in the past. Non-standard property insurance is designed for homes that are made with non-standard materials or have a unique design.

What is Non-Standard Construction?

The definition of non-standard construction is anything that differs from the standard type of construction. However determining what makes a house ‘non-standard’ can be a little bit confusing and complicated.

Often eco buildings are considered non-standard these include such as buildings that are made with grass, vegetation, trees and bushes. Any mud, thatch and adobe buildings can also be considered non-standard as well, as well as buildings that are made with wattle and daub construction. Properties that are used by home workers or child minders can also be considered non-standard properties.

Concrete and prefabricated homes are also considered non-standard and there are many of these homes in the UK to say the least - an estimated 1.5 million were built during and post wartime as affordable housing. Concrete doesn’t last as long as stone or brick, so these properties are known to suffer from crumbling and corrosion.

Timber framed homes are also considered non-standard in the UK. In the rest of the developed world 70% of people live in timber frame properties. However in the UK these types of houses only represent 8% of properties. A timber frame property has a number of different insurance needs than a stone and brick home because it can be prone to wet and dry rots as well as damage by vermin like termites.

What Does Non-Standard Home Insurance Cover?

A non-standard home insurance policy will cover a number of potential risks to your property, including theft, damage, flood and fire. Hopefully you will not need to ever make a claim on your insurance policy, but if something happens then you will be glad that you were protected!

A good insurance policy should include cover for accidental damage to sanitary fixtures, fixed glass and electrical equipment. It should also cover repair of leaks and cover for the contents belonging to you and or your tenants.

Choosing non-standard home insurance from a business that understands the specific problem associated with your type of construction is important. A specialist company will understand the problems that your property might suffer and will be able to give you cover that is better suited to your needs.

If you have a non-standard home, make sure that you choose the right insurance for your needs and that you do your research first, so that the policy you choose is a good match for the unique characteristics of your home. 

Thursday, 14 August 2014

Tax Tips for Landlords

What tax will I Pay when I buy the property?

When you purchase a property, you must pay ‘Stamp Duty’ Land Tax. The amount of tax you pay is calculated as a percentage of the value of the property.

The rates at the moment are:

  • Properties worth less than £125,000 are tax-exempt.
  • Properties worth between £125,001 and £250,000 are taxed at 1%.
  • Properties worth between £250,001 and £500,000 are taxed at 3%.
  • Properties worth between £500,001 and £1m are taxed at 4%.
  • Properties worth between more than £1m and £2m are taxed at 5%.
  • Properties worth more than £2m are taxed at 7%.
  • Properties worth more than £2m bought by corporate bodies are taxed at 15%.

It is vital you include the cost of stamp duty in your budget when looking to purchase a property, the sum can total thousands – so avoid any nasty surprises further down the line. 

How much income tax will I pay?

The yields you gain from renting out your property make up part of your annual income, so are consequently subject to income tax.

The rate of tax you pay obviously varies depending on your overall taxable income. As a basic rate taxpayer, you will pay 20%, while higher rate taxpayers will pay 40%. In the current 2013/14 tax year, you pay the higher rate of tax on any earnings above £41,450.

It is a good idea to set up a different account for your rental income. If you do this, your assets as a landlord won’t be mistaken for any other income and expenses.

There is a somewhat common misconception that a property let only needs to be declared on a tax return once it is profitable. However, there is a £10,000 threshold for rental income at which point it must be declared, regardless of profit.

You should also declare any loss making properties in your portfolio. Although this has no immediate tax benefit, once the portfolio is profitable, you can offset these previous losses.

What are my allowable expenses?

Allowable expenses include:

  • Interest on a mortgage taken out on the property;
  • Buildings and contents insurance;
  • Professional/legal fees;
  • Council tax;
  • Travel costs to collect rent;
  • Maintenance;
  • Advertising the property for rent

HMRC deems any costs needed to fulfil your duties as a landlord or keep the property in good condition to be “allowable expenses”.

Offsetting the costs, could help to considerably reduce your tax bill.

“Capital expenses” are not tax deductible however. These are expenses which boost the worth of a property, such as refurbishments or building a conservatory to provide more space for tenants. These kinds of costs cannot be deducted from your income tax bill. However, you might be able to offset these against any capital gains tax when you come to selling the property.

You can also claim a “wear and tear” allowance, If you decide to rent out the property on a furnished basis, this enables you to make a deduction of 10% of the net rent per year. To calculate the net rent you will get, take the amount of rent you receive and minus any costs you pay that a tenant usually would, such as council tax.

What tax will I pay when selling the property?

If you feel it is time to sell, you will almost certainly be liable for capital gains tax on any profit - this is the tax you pay whenever you dispose of an asset, such as a building, land or lease.

Every year, you’ll have an annual tax-free allowance, whereby you can make a certain amount of profit prior to the tax kicking in. In the 2013/14 tax year, this allowance is £10,900.

Basic rate taxpayers pay capital gains tax at 18%, but this amount grows to 28% for taxpayers in the higher rate bracket.

Even if you have relatively modest earnings from your salary, profits from the sale of a property may put you in the higher band.

Reducing capital gains tax

You can offset some of your expenses against your capital gains tax bill. These include:

  • Solicitors and conveyancing fees
  • Estate agents fees
  • Expenses incurred when improving the property
  • Advertising the property for sale
  • Stamp Duty

Remember that you won’t pay capital gains tax on your primary residence. This is called private residence relief. If you have lived in the property you’re letting out at any time, you may be able to claim tax relief for the last three years of ownership.

Overseas properties

If you are a UK taxpayer, then any rental income or profits on sales of an overseas property are subject to the UK Tax rules – just as a UK Property would be. 


This article is intended to inform rather than advise. You should also seek full legal advice or visit for more information. 

Thursday, 7 August 2014

HMOs – The important things for landlords to know

If you are a landlord and are renting your property to several different unrelated tenants, you probably already know that the legal responsibilities can get quite complicated. In this situation, the home is usually classified as a House in Multiple Occupation – or an HMO.

Renting your property out in this way can often make a lot of sense. You will be able to rent each bedroom of a multiple-bedroom house separately to individual tenants, without having to worry about renting the entire house. However, in this situation you will need to follow a strict set of procedures that are related to health and safety. Failure to do so could mean that you may experience fines of up to £20,000.

It is important to be aware of the legal responsibilities that come with renting out your home in this way, so that you can avoid any potential difficulties.

Understanding how an HMO works

An HMO is a property where tenants that are not related to each other share facilities, such as a kitchen, bathroom, toilet or hand basin. This might include a household that consists of three or more unrelated tenants, or tenants that have separate rental agreements. Also this can apply if the property is a bedsit or a hotel or if students live at the property.

Your home could also be considered an HMO if you live at the property and rent rooms to tenants. However, the classifications can be confusing so if you are not sure you should check with the council to see if your property counts as an HMO.

Do HMO landlords need a licence?

Is it necessary to have a licence when you are operating an HMO? This depends on the type of property, as well as the specific rules of your council and how it is occupied. There are two types of HMO licensing, additional and mandatory. Those who own a certain type of property will need to apply for an HMO licence, such as if your property has five or more unrelated tenants within two or more households or three or more storeys.

However in some situations the council can impose additional licensing if they believe that significant numbers of these multiple occupant homes are not being run properly in the district. This might mean that you will need to apply for a licence even though your particular property doesn’t meet the requirements. To find out whether you need a licence or not, you should contact your local council.

How the licence works

When you successfully obtain an HMO licence, it will last for a maximum of five years. After that, you must renew the certification before it runs out. If you have more than one property, you will need to apply for a separate licence for each one.

Usually the council will want to perform an inspection of your property so that they can make sure there are not any serious health and safety hazards. Make sure that you do follow through on this procedure, because if you do not apply for the licence you could be subject to a fine of up to £20,000.

Other important factors

What are the other important factors that you will need to consider as the landlord of an HMO?

Safety Regulations

If you fail to ensure that your property is up to safety standards, this could result in criminal prosecution. Also if the council determines that your property is not being run in a safe way, it could take over management of the company.

Fire Safety

Don’t forget to consider smoke detectors in the communal areas and the bedrooms and to set up fire extinguishers and escape routes. You will also need to make annual gas checks and make sure that the electrical systems are examined every five years.


There is a limit to the amount of people who can live in an HMO, because the facilities will need to be adequate. The council will have a ratio to determine the number of people who will be able to comfortably share a facility. For example, if your property has a shared kitchen you might not be able to rent to more than five people. Allowing more people to occupy the property might subject you to a fine.

These are just a few of the important things that you should know if you are a landlord who is renting out an HMO property, so that you can run your property safely and legally. 

Thursday, 31 July 2014

How to Keep Your Property Safe This Summer

Do you plan on going away on holiday this summer? If so, it will be important to think about how you will keep your home secure while you are gone. Burglary is one of the most common crimes and if you do not make sure that your property is secure, you could return home to a very nasty surprise and a lot fewer possessions.

You might have contents insurance that will compensate you for the worth of your possessions, but it is still very unpleasant and stressful to have your home broken into. When your home is burgled you can lose personal items that have sentimental value and are irreplaceable.

Most homes within the UK have burglar alarms, security locks and safety lighting installed as standard in order to protect them. However, there are also many other things that you can and should do to protect your home. So how can you keep your home safe from theft when you are on holiday this summer? Here are some tips that you can keep in mind:

Are your windows and doors securely locked?

It might seem obvious, but many people have forgotten to lock a window or a back door, allowing an opportunity thief access to their home. If you have any ground floor windows or windows that can be reached by climbing, you should have an automatic lock that requires a key to open.

It is also important to have robust modern locks on your front and back doors, as well as a 180 door peep hole so that you can see who outside the door. You might even want to consider installing a specialty lock, or some motion sensors that will deter thieves from your property. If you have a new build house, these types of locks and security features might be already installed.

Get to know your neighbours

Teaming up with your neighbours and working together to watch each other’s houses can be very effective. If your neighbour knows that you are not home, but they spot someone messing around on your property they can call the police. It is not recommended to confront the thief, as they could potentially be armed.

You might want to install external lighting that is motion-sensitive – so it will switch on if someone is in the general area. This will allow your neighbours to notice if someone is sneaking around your house and makes it harder for the thief to conceal their actions.

Don’t forget about items outside the house

If you have your motorcycle, bike or mower outside of the home they can be stolen as well. Make sure that they are locked down and secured. You should also consider engraving them with your name and contact details. This will make them easier to recover if they are stolen and will make them harder for criminals to sell, so they will likely move onto another target.

Be careful on social media

You might be so excited about your beach holiday that you want to share it with everyone on Facebook and Twitter. However, thieves can use this information to know exactly when you will be out of the house. Many thieves have used social media updates in this way to figure out when houses will be empty.

Instead, don’t mention your trip on social media until you have returned – so no one knows that days on which you are gone. Remind your friends not to mention anything about your impending holiday either.

Don’t make it obvious that you are not home

Many thieves will look through the neighbourhood for homes that appear unoccupied. They can tell by the uncut grass, the piles of mail and newspapers, the lack of car in the drive and the lack of lights on or activity in the house. They will then mark your home as a target and observe it for a while to ensure that you are gone, then they will strike.

Ask your friends to help you make your home look occupied when you are not there. They can collect your mail, park their car in your drive, spend some time in the house in the evenings with the lights on, leave the TV on for a while, etc. You could even pay the neighbourhood kid to cut your grass if you will be gone for a while. These little details will make your home less of a target for thieves so you will reduce your chances of being robbed.

Install an alarm system

There are many benefits to installing an alarm system in your home – especially if you will be away for a significant amount of time. The alarm system will deter intruders and it will detect when a door or window is opened using motion sensors. Some systems can be linked to a mobile phone number, so that you will receive a notification if your alarm has been triggered. The security centre will be notified and the police will be dispatched to the property!

Mark your valuable items

It is also recommended that you take photographs of your valuable items and mark them in some way, using the many marking methods that are available. This will help your goods to be traced if they are stolen. Be sure to make a note of all serial numbers of your items. Also avoid leaving valuable items such as laptops and jewellery in view of the windows, as this makes it more tempting for burglars to break in if they can see something they want.

These are just a few common sense tips that you should keep in mind so that you can keep your home secure this summer while you are on holiday. It is impossible to prevent all burglaries, but there are many ways that you can make your home less of a target and reduce your chances of it occurring. With a little bit of planning and care, you can keep your home and possessions safe so that they will be right where you left them when you return with the holiday blues!

Thursday, 24 July 2014

Simple steps you can take to attract tenants to your property

If you rent out your property, one of the most advantageous things that you can do is to ensure that you have high quality tenants. When you have good tenants you can relax knowing that they will pay your rent on time, keep your property in good condition and act responsibly.

However, the effects of a bad tenant can be serious – they can massively damage your property, ruin your reputation in the neighbourhood, fail to pay rent which can put you in debt and much more. This can cause you to lose money on your rental home investment, which is a headache you don’t want to have to deal with. Once they have signed a lease agreement it becomes difficult to evict them, causing a long, expensive and time consuming hassle.

Finding the right high quality tenants will be a huge benefit to you, so what can you do to protect your investment? Here are some tips to keep in mind:

Attract quality tenants by keeping your property in good condition

The rental market is very competitive and it will become more competitive in the future. Landlords can get ahead of the game by keeping their property in good condition and increasing its value.

Making cosmetic changes to the property and adding new appliances are usually the most cost-effective ways to increase the value of the home and attract more high quality tenants. Do your best to accentuate light and space as much as possible. Freshen up the paintwork, buy new modern appliances and even consider replacing carpets with wood flooring if your budget allows.

Don’t forget the exterior of the property as well! Make sure that the garden is neat and presentable, the door and front gate are welcoming and the paint on the exterior is fresh and not peeling. First impressions really do count when it comes to attracting interested tenants!

Advertise your property

Having a “For Rent” sign isn’t enough to attract potential tenants, as it will only attract those who are walking past the property. Try also advertising your property on websites and want ads. To write an enticing ad, highlight the advantages of the property such as modern design, historical features, water view, spacious kitchen, master bedroom ensuite, etc.

If there is a unique feature that really makes the property stand out, you should list it at the top of the advertisement so that it catches readers attention. Take the time to write an enticing ad, because the more applicants you get the better chance you will have of finding a really good tenant.

Perform a background check

When you have narrowed down your list of potential tenants, you can screen them by doing a background check. Ask the applicant to provide you with the contact information of the previous locations where they have rented. You can then call their previous landlords to find out about whether or not they treated the property well, whether those landlords had any complaints and whether they paid their rent on time. This will help you to weed out the potentially disastrous tenants from consideration.

If you don’t have the time for this there are even background screening companies that will do the job for you, even conducting criminal record searches and credit checks. This option can save you a lot of time if you have multiple applicants for your rental property.

Treat them with respect

When it really comes down to it, your tenants will treat you the way that you treat them, so establish a good relationship with them, even become friends with them if you can (but not too friendly!). They are not just someone who gives you money once a month, they are people too.

Respect the privacy of your tenants, tend to repairs and maintenance issues with urgency, answer their questions and speak to them with kindness. Invite them over for dinner to get to know them. Treat them not just like tenants, but also like neighbours and friends. When they have a good relationship with you and they feel you appreciate them, they are much more likely to treat your property with respect in return and will pay on time every time.

These are just a few tips that you can keep in mind in order to attract the best possible tenants to your property. Having bad tenants can be nothing but headache, but with the right tenants you can have many happy reliable years of renting out your property. Take your time and find the right people to rent your home – it’s worth it effort! 

Landlords - protect yourself against unpaid rent with Rent Guarantee & Legal Expenses Insurance from Discount Landlord. 

Wednesday, 25 June 2014

Which type of property should I invest in?

If you are looking to invest in property, one of the most important things that you will need to consider is which types of properties will make the best rental investments. Let’s take a look at the different types of accommodation and the advantages that they offer in the rental market.

In the city or country?

When you are choosing an investment property the focus should be on what the market demand is, rather than where you want to live. With any investment property you should look at what the market wants and generally there is more demand for properties in the city. This is where the majority of employment is, so you will find it easier to rent a home. Of course, there is some demand for country properties but it is important to consider what will be the best investment for you.

Should you buy a flat or a house?

When you buy a flat you will have to pay management charges, which can add up to more than £1000 per year. Flats are very in demand with tenants, but there are many available and competition is likely to be tough.

A flat will tend to attract singles or young couples, while houses tend to be rented by families, who will need parking and more space. Do your research to find out the demographic of the area and which group is searching for accommodation.

Should you rent a large house or a small one?

A large house will have the advantage of having larger rent, but it will typically take longer to rent out than a smaller property. Smaller homes can bring in better income and are in higher demand, so they will be easier to rent out.

Multiple occupancy or single?

When you are renting out multiple rooms of the same house, keep in mind that all of your tenants will not necessarily start and finish at the same time. This is a good thing because it means that you will likely always have someone renting in the home. However, it also means that it is important to keep the property well maintained – including the hallways, kitchen and bathrooms.

You will likely earn a higher income if you rent out the property in this way, but you will need to do your research when it comes to fire doors, emergency light systems and permission from the local council.

Old or new?

Older properties usually have a larger plot size, but they will come with more maintenance issues. New properties will be smaller but they tend to attract renters more quickly.

These are just a few important factors that you should consider when you are determining what type of property you should invest in.

Thursday, 19 June 2014

Which tenant market should you target?

If you are looking to become a landlord, what tenant market should you be targeting for your rentals? Should you be looking to rent to students, professionals, exchange students, young families or singles? There are many different categories within the overall rental market and each property appeals to different types of tenants. When you are a prospective landlord you should be clear about the type of tenant that you are looking to attract, so that you can make sure that the property is prepared to its maximum advantage. 

The type of tenants you target will depend on the type of property you have, as well as the local market demand and the location that the home is in. For example, some landlords will fare very well when letting to students and others will do well if they are letting their homes out to tenants who are on housing benefit. 

There are other homes that will rent well to short term renters, students or corporate renters. 
So what factors should you keep in mind when you are considering which tenant market to target? Here are some tips:

Think about which groups will be the hardest work. Some landlords avoid renting to people on housing benefit or students. This is often because students tend not to look after properties very well and housing benefit tenants come with a lot of paperwork and the risk that the tenant might not pay if they are out of work. 

However, there are ways to work around these problems. For example, there are ways to get rent paid directly from the local authorities so that you won’t have any non-payment problems. 

When you rent to families, consider making your “no pets” rule more relaxed, as families are much more likely to have pets and this will limit your number of applicants. 

Keep in mind that when you rent to younger singles, the property will be more likely to be less tidy when you need to do viewings, compared to a family or a couple. 

The further from home your tenants are, the more likely it is that they will have guests coming to stay for long periods of time. This means that your home might be occupied by more than just the tenants sometimes. 

These are just a few of the factors that you should consider when determining who to target within the tenant market. These are generalities of course and you should consider each tenant on an individual basis, as everyone is different. Overall the most important thing is to look for someone who has regular income, is responsible and has good references. Ask their previous landlords if they were clean, respectful and paid their rent in the past.