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Are you having problems letting your London property?

With more tax legislation, Brexit uncertainty and Estate Agents reporting losses because of the dip in property sales - supply levels of good quality properties for rental in London have declined. Meanwhile, the rental market remains exceptionally strong in virtually all London zones, but not enough properties to meet the demands of a rapidly growing professional workforce. As letting specialists with London-wide coverage and our international offices who bring in a steady flow of properties from overseas investors, even so, we still have long waiting lists of 20 applicants per available property, which is unprecedented!

There is literally a ‘drought’ in some locations: the City of London, East London, Docklands and even more traditional areas like Kensington, Knightsbridge and Hampstead where we really need more properties for corporates. Small units (1 and 2 beds) remain most popular in central and East London and family accommodation (modern houses or large apartments in secure developments) are needed in many places, particularly if they are located near top London schools or transport hubs.

The other reason for the shortage of stock is because our tenants are renewing their tenancies for a second or third year. This is good news for Landlords but leaves us with low stock. Such is the shortage of accurately priced rental properties, that if the presentation is very good and the location offers convenience and good amenities, then it is likely to let within just a few days with minimal void periods. If your current agent is telling you they cannot let your London property, please contact us in complete confidence. No strings attached. Just an open discussion about how we can help you.

With 16 branches across London, and international offices in China, Hong Kong, India, Malaysia and Singapore, we offer our international clients a complete one-stop service in their own time zone. This includes marketing the property on the top UK portals, showing it to potential tenants, credit referencing the tenant, contracts, collecting rent and professional management*. We can also help with furnishing packages to give your property the ‘wow’ factor.

Don’t worry if you already have another agent instructed, talk to us.

*If you are hoping to attract a corporate tenant or company let, then they expect professional property management to be in place. They will not sign a lease without it.

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Tax planning for landlords, a tax round-up of the year 2020

This year has been challenging for all of us but another issue that landlords need to address is the tax changes that have also taken place this year or are planned for next year. Landlords should consider the implications of these tax changes according to their own personal circumstances. Throughout the year we’ve been keeping you updated about these tax changes in our regular blogs but to make life easier, we’ve summarised them below. Temporary Stamp Duty holiday We’ll start with a positive tax change – the temporary Stamp Duty Land Tax (SDLT) holiday which applies to buyers completing on a property before March 31st 2021. For properties valued at up to £500,000, buyers will not pay any Stamp Duty. For properties costing from £500,001 to £925,000, SDLT is 5% of the portion above £500,001. For properties costing from £925,001 to £1.5 million, SDLT is 10% of the portion above £925,001. For the remaining amount, the portion above £1.5 million is taxed at 12%. This is a temporary measure – the deadline to complete on a purchase is March 31st 2021. There is still time to benefit from this tax cut but buyers need to move quickly as it takes time to carry out valuations and conveyancing and there are currently high volumes of transactions taking place so there are some delays. Stamp Duty surcharge for overseas buyers from April 2021 A new 2% SDLT surcharge for overseas investors not resident in the UK is being introduced from April 1st 2021 so this is another reason for buyers to complete their purchase before the end of March 2021. Transactions will be exempt if exchange of contracts took place before March 11th 2020 but does not complete until after April 2021. The new tax means that overseas buyers will pay a 2% higher rate of Stamp Duty than the rate that applies to UK residents. Check the amount of tax you will pay on your property purchase on our recently updated stamp duty calculator Non-UK residents must register for Corporation Tax Non-UK resident companies (including those investing in UK property through collective investment vehicles) must now pay Corporation Tax instead of Income Tax on profits from UK property. Previously these companies paid Income Tax on rental income (at a flat rate of 20% of profits) using a SA700 return. From April 6th, 2020, these overseas companies have been required to register for and pay Corporation Tax instead but the good news is that the Corporation Tax payable is less – 19% of profits. We can assist companies affected by completing the relevant tax return on their behalf. Further details and fees can be found here at our tax return service for overseas investors web page. Changes to Capital Gains Tax (CGT) Since April 6th 2020, any Capital Gains Tax due on the disposal of a residential property (a buy-to-let or other second property) must be calculated and paid to HMRC within 30 days of completion. Letting relief of £40,000 against CGT – which was available where a property that was rented and also lived in by the owner at some point – is no longer available. Also, previously there was a principal private residence relief – a reduction in taxable gain made during the final 18 months of ownership – this has been reduced to nine months. Higher rate tax relief phased out The phased introduction of the restriction of interest relief against residential property income is now complete and higher rate tax relief has been phased out. From April 2020, landlords have had to calculate the tax on their profits before any interest deduction in full and claim back a basic rate tax credit which is currently 20% on the amount of interest charged. This only affects individuals (and not companies) and only those whose income will be in one of the higher rate tax brackets. Looking ahead to 2021 Of course, the Covid 19 pandemic has created a huge drain on public resources and the government has intervened in many different ways to support the economy and help address the consequences of the pandemic. Measures such as the Stamp Duty holiday have had a significant impact on the property market which has performed extremely well over the last few months. And with a vaccine now being rolling out, the outlook is more positive than it has been for some time. But more tax changes may be necessary and as this is a fast-moving situation we will keep you updated with any changes as they are announced. For a copy of our Tax Guide for Overseas Investors, please sign up here

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