It was a bright cold day in April, and the clocks were striking thirteen. George Orwell
April is the kindest month. April gets you out of your head and out working in the garden. Marty Rubin
Daffodil and eglantine, / And woodbine, / Lily, violet, and rose / Plentiful in April fair, / To the air, / Their pretty petals do unclose. Remy Belleau
Dear all,
In a week that has been dominated by the passing of Prince Philip, I was reminded of a lovely TV show I watched years ago https://www.channel4.com/programmes/meet-the-natives, which was an interesting show about different cultures and beliefs with some very heart felt and eye opening experiences about those from a small island who had a connection to Prince Philip, and now I believe Prince Charles, so there maybe a follow up show to the original.
Due to what some people feel was excessive coverage, you may have missed the news that the Scottish Government has made changes to the model private residential tenancy (PRT) lease to reflect the extension of the Coronavirus (Scotland) Act to 30 September 2021.
There have been 4 changes to the Private Rented Tenancy agreement since March 2020 and I believe almost 300 pieces of legislative amendments related to property and the private rented sector, which is why the Glasgow Property Letting team try to do as many courses and on line events as we can to make sure that we can keep you up to date and informed.
As you know I encourage questions and ideas for topics for these landlord emails and a question has been
“ I’ve heard that I can’t evict tenants just now. Is that right?”
The official stance is that Landlords can still serve notice to end a tenancy and apply to the tribunal for an eviction order. The tribunal can still issue eviction orders as normal but unless the eviction order is for illegal occupation, antisocial behaviour or criminal behaviour, it can’t be enforced until the area the property is in moves to level 2 (or lower) Covid-19 restrictions. Most areas of Scotland are expected to move to level 2 on 17 May.
https://portolio.co.uk/wp-content/uploads/Portolio-PRS-Survey-2021.pdf
Three-quarters of private rental landlords in Scotland say they would recommend buy-to-let as an investment, according to a new survey conducted by tenanted property sales specialists Portolio.
The survey found that 78% of those questioned would urge others to buy homes for rent as a long-term investment.
Highlighting an optimistic outlook for the private rental sector, 71.5% said they believed average property prices would increase in the next five years.
Examining the immediate impact of the coronavirus pandemic, 61.8% reported no increase in rent arrears over the past 12 months. However, about a third (30%) of those who took part in the survey agreed that the impact of the outbreak had changed their buy-to-let strategy.
The founders of Portolio said the findings further strengthen the sector’s credentials as a strong investment prospect, despite general economic uncertainty.
Findings emerged following a survey of 300 landlords, letting agents and property professionals. Collectively, Portolio estimates they are responsible for 10,000 homes across Scotland.
Chris Wood, managing director and co-founder of Portolio, said: “We have all changed our outlook on a great many things since the beginning of the Covid-19 pandemic – and property investment should be no different. However, it’s clear that property investment is still worthwhile.
“As an asset class, its ability to leverage funds is a huge plus. The long term nature of buy-to-let investing means it can, and should, ride the ups and downs that the economy throws at us. Buying at the right price – a fair price – is the ticket.”
On the change in investment strategy that the findings pointed to, Mr Wood added: “That doesn’t necessarily mean no longer investing in property. Indeed, our sales in January and February have been twice our average for 2020.
“It could, however, mean a plan to invest in a wider variety of property in different locations, such as those both within and away from city centre locations, more with two or three beds – something with a home office and or a garden. These are becoming increasingly popular in addition to traditional buy-to-let areas.
“The change to the way in which we all live our lives because of the pandemic means that a change of direction in their investment portfolio makes the most business sense to meet shifting demands. They could include investing in commuter areas as people who would previously have needed to be in a city centre every day look towards a mix of home and office working, for example.
“Dependable rental income and letability is something all investors should consider when buying so thinking about the type of tenant you hope to attract is more important than ever.”
Just over 40% of respondents said they had not changed their strategy as a result of the pandemic, while a quarter (27.8%) said they were unsure of their position.
One letting agent responding to the survey said: “All our landlords are keeping their properties albeit we may see an increase in properties bought in areas that are more rural but with good internet links as more people shift to working from home.”
Another stated: “Landlords who historically purchased in the city centre are now looking further out for better returns.”
On five-year price predictions, while 71.5% foresee a rise, 19.9% believed they thought they would stay the same with just 8.5% anticipating a decrease.
Asked about prices over the next two years, 37% predicted an increase. Another 37.9% believe they will stay static in that timeframe, with 25.1% expecting them to fall.
It is hoped that the long-term price optimism will continue to bring new buy-to-let investors to Scotland’s property market.
Ross MacDonald, Portolio’s co-founder and director of sales, added: “The signs remain positive that – beyond the discomfort that we will feel from furlough ending and the job losses that may follow – that the economy will adjust and stabilise. That’s clearly reflected in landlords’ outlook.
“The ongoing support of lenders is, of course, critical across the entire housing market. Throughout the pandemic they have stood by borrowers. Continuing to do so is an important part of the economic recovery that everyone is desperate to see.”
You may remember in February I sent out an in depth landlord email about tax, I received my brown envelope from HMRC and will be filling out my return by the end of May, that is my personal dead line, because I like to get these things done as soon as I can, but that is me. Your landlord log in details will help you to create a year statement and access information to assist in filling out the return.
If you do not have, or can find the email with your landlord log in, please email admin@glasgowpropertyletting.com and we can send them out.
Disposals reminder
From 6 April 2020 onwards UK residents disposing of UK residential property are required to report the disposal to HMRC on a capital gains tax (CGT) return and pay any tax due within 30 days of selling the property, writes David Morrison of EQ Property Taxperts. There are some exemptions to the requirement to file a return these include the following situations:
- The whole gain is covered by Principal Private Residence relief
- The property was sold at a loss
- The property is situated outside the UK
- The disposal is to a spouse/civil partner
For non-UK resident individuals, the disposal of all UK property has to be reported to HMRC within 30 days whether or not there is tax to pay or a loss has been made.
Failure to report and pay any tax due by the 30-day deadline will result in interest and penalties being charged, estimates can be used but any underpaid tax will attract interest and potentially penalties.
The information required to calculate the gain and complete the return is as follows:
- property address and postcode
- date the property was acquired
- value of the property when acquired
- any costs of buying, selling or capital improvements to the property
- date contracts were exchanged when selling or disposing of the property
- completion date of sale
- value of property when disposed of
- details of any tax reliefs, allowances or exemptions the individual is entitled to
- property type, if non-resident
- property value on 31 March 1982 (known as ‘rebasing’) if UK resident at the time of the disposal and owned the property on or before 31 March 1982
- property value on 5 April 2019 (known as ‘rebasing’) if non-resident at the time of the disposal and owned the property on or before 5 April 2019.
To report the gain a Government Gateway registration is required. The individual will need their Government Gateway user ID and password or they will need to create a user ID if they haven’t previously set one up. They will then need to create a ‘Capital Gains Tax on UK property’ account before they can report and pay the tax due.
HMRC and tax always feels such a serious note to end on.
The sun setting on St Vincent Street in Glasgow seems more appropriate.
Take care, stay safe and please email and enquiries to admin@glasgowpropertyletting.com and a member of the team can assist,