With all the excitement and anticipation of the New Year ahead, we’re encouraging landlords to look to and plan for 2019 with their rental properties in mind. We firmly believe that planning is the key to success - and to avoiding costly surprises!
Taking some time over the festive break to review your portfolio and to plan for incoming tax changes could save you hundreds of pounds (and headaches!) in 2019.
Mortgages
Lending rules in the buy-to-let sector became more stringent a couple of years ago, with many lenders increasing their lending criteria to deal with the possibility of rising interest rates or other economic uncertainty. Interest rates did rise this year, and there is continuing uncertainty as the Government tries to negotiate the Brexit deal and the Opposition call for a General Election or the People’s Vote.
That said, many mortgage advisors are saying that buy-to-let mortgage rates have never been better, so now’s the time to see if you could make some substantial savings to your mortgage repayments.
The Mortgage Advice Bureau Swansea have just published their latest BTL guide. You can click here to read it, or click here to speak to Bethan Thomas for a quick review of your mortgage.
Tax
By law, all income received (rent or otherwise) must be declared to HMRC. The way in which landlords are taxed will be increasing for some landlords again in April 2019. Understanding how the tax changes will affect you is essential for financial planning.
From this coming April, too, the third reduction in the amount of interest able to be off-set against tax will be implemented, meaning any interest on a buy-to-let mortgage will be taxed at a standard rate of 20%.
Stamp duty remains at an additional 3% on top of the standard stamp duty rates for second properties, so if you are planning on expanding your portfolio in 2019, you need to factor this in as an additional cost.
We are urging all of our landlords to take independent tax advice from a qualified accountant such as Tracy Jones from Fergusons & Peters Chartered Accountants in Swansea.
Insurance
Having the right Landlord Insurance is essential for any landlord, and reviewing your cover could save thousands should the worst occur.
Make sure you are covered for prolonged void periods, review your excess amounts and understand what exactly your Policy covers to ensure you have the peace of mind that in the event of an emergency, you are fully aware of how your insurance will help you.
You can get a free review of your landlords buildings and contents insurance with Ian Bateman, from local Swansea-based insurers Eastside Insurance who provide specialist landlords cover. Click here to email him.
Maintenance
Maintaining your property is a necessary part of being a landlord. Planning your maintenance in advance should help to minimise any unexpected costly repairs.
Get your boiler serviced at the same time as the landlord’s gas safety certificate is carried out. A regular service will reduce the likelihood of a breakdown and prolong the life of your boiler. Having them both carried out at the same time can reduce the costs and the time associated with multiple visits. We wrote a guide this year on how to tell if your certificate is valid – click here to take a look.
Clearing gutters at this time of the year will help prevent them getting blocked and causing issues with damp, which can be costly and take a long time to rectify.
If you self-manage, plan when you are going to visit your tenants next year and make sure they know how to contact you or your nominated contractors over the festive break. The last thing you want to start your new year off is a huge bill from your tenant for an ‘out of hours’ plumber they were forced to us when they couldn't get hold of you!
Get Registered with Rent Smart Wales
It has been a legal requirement for all landlords with a property in Wales to be registered with Rent Smart Wales since 2015. Landlords and agents who manage a property must also have a licence, or face prosecution.
Enforcement officers are now in place and taking action against landlords and agents who have not yet complied, so we urge all landlords to start the process if you haven't already.
Penalties include fines, rent stopping orders, and the inability to serve a section 21 notice for possession.
For more information, check out our latest blog article here.
At McCartan, we are always keeping our landlords and tenants up to date with the latest changes and we have no doubt that 2019 will see many more changes coming our way.
Make sure your friends and family are kept up to date too by sharing our newsletter with them - or even better, tell them to subscribe!
Wishing you all a very prosperous 2019,
Hannah
