LETTINGSnews
BUY TO LET Highest
average yield achieved in Q4
The final quarter of 2011 was the year’s most successful, a survey carried out by
Paragon, has revealed. PRS Trends, the quarterly
survey carried out by Paragon, asks landlords to give their views and feedback on factors which include, tenant demand, rental income levels, portfolio size and buy-to-let finance. Landlords reported that they had achieved their highest average yield – a portfolio’s annual rental income as a percentage of its total value for the year – during the fourth quarter, reaching 6.6 per cent compared to 6.1 per cent in the third quarter. Half of the landlords
surveyed said that tenant demand was either growing or booming during the final quarter of the year, which is an increase from 44 per cent in Q3. This trend looks set to stay during 2012, with 56 per cent of landlords saying that demand will continue to increase. Landlords were also asked
for their views on the availability of buy-to-let finance during Q4; 27 per cent said that they thought it was either widely or reasonably available, with 35 per cent saying they thought that there was still limited availability. A fifth expect to purchase new buy-to-let property in the first quarter of 2012. Nigel Terrington, Chief
Executive of Paragon Group, said, “The final quarter of last year was very positive for landlords and for many of those that took part in the survey, the most successful quarter of the year. It is no surprise with the ongoing pressures on the wider housing sector that landlords are still experiencing increasing tenant demand, which looks set to continue throughout the coming 12 months.”
HOLIDAY LETS Good news for owners
A tribunal has ruled against HMRC on BPR – Business Property Relief – from Inheritance Tax,
reports Saffery Champness. Up until now HM Revenue & Customs (HMRC) were of the view that Business Property Relief from Inheritance Tax was only available on a holiday letting property if either the owner himself or through an agent, was substantially involved with the holidaymakers in terms of their activities on and from the premises, and by reference to the level and type of services provided. In a recent case HMRC denied BPR on a holiday property owned by Mrs Pawson who died in June 2006. Mrs Pawson’s executors appealed this decision to the First Tier Tribunal and the case was heard in November last year. The tribunal allowed the executor’s appeal and confirmed that the business was conducted with a view to gain.
Andrew Arnott, a partner of
Saffery Champness Landed Estates and Rural Business Group, says, “This is of significant interest to landowners, farmers and indeed anyone letting a holiday property. “The services provided to the occupiers of the property were not within the terms set out by HMRC, but, even so, the tribunal found the services that were provided (clean bed linen, heating, etc) to be significant, and over and above what would be provided by a property owner letting a property as an investment.
“Accordingly the business did not consist of holding an investment. “It is very good news for owners of holiday letting properties who up until now had assumed that BPR would only be available if the criteria laid out in the HMRC manual were met. It remains to be seen whether or not HMRC will appeal against the tribunal’s decision,” said Andrew.
SUCCESS STORY Leaders is
among fastest growing fi rms
Leaders has been listed, for the second year running, as one of Britain’s top performing
private companies on the Sunday Times Buyout Track 100. Published on 5th February, The Sunday Times Deloitte Buyout Track 100 league table ranks Britain’s 100 private-equity-backed companies with the fastest- growing profits (EBITDA) over the last two years. Leaders was the only letting specialist to have made the list, and one of just two businesses in the estate agency industry. The firm, which started as a single office in Brighton in 1983, now has 60 branches from the south coast to East Anglia. It has been run by the founder’s son-in-law, Paul Weller, for the last 16 years and retains a strong family ethos. It was listed this year and last year in the Sunday Times Buyout Track 100, making 82nd place this year, with its profits up by 27 per cent a year from £3.4m in 2009 to £5.4m last year.
On track for profits: Leaders are up 27%!
LEGAL ISSUES Land Registry helps prevent property fraud
Property investors and owners who
don’t live in their property can now register, free of charge, for a restriction that is designed to prevent their property being used in a financial fraud, says Adams & Remers. Yasmin Uddin, partner at Adams
& Remers comments, “I act for a number of property investors and overseas owners and this will be particularly welcome news to them as properties which are most
• make sure your property is
vulnerable to fraud are usually empty, tenanted or mortgage free. Individuals at higher risk of fraud; typically by impersonation of the owner are owners who are away for long periods, either living abroad, investors, or someone in hospital or residential care.” “Land Registry advises the following steps to avoid fraud,
registered at the Land Registry • Make sure your contact details
are up to date if you don’t live at the property
• Enter a restriction on the
property which requires a solicitor or conveyancer to certify they are satisfied with a person trying to sell or mortgage the property is the true owner. “People who own and live in the property can also register, but there is a £50 fee payable. A form can be downloaded from www.
landregistry.gov.uk. Although the number of cases of fraud is small, your home is often your largest asset and you should ensure it is fully protected.”
PROPERTYdrum MARCH 2012 49
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