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Wear and Tear allowance or renewals?

What is wear and tear allowance?

Wear and tear allowance allows landlords to offset 10% of their annual rental income against their property income tax bill. While this may seem simple, there are several conditions. For example, wear and tear can only be claimed on fully furnished properties. This means that the property is completely ready to be moved into, with the tenants not needing to buy anything, including bedding and crockery. It is also important to note that wear and tear does not take into account the amount of money the landlord has spent on furniture, and is based on income and income alone. If your annual income includes costs usually paid by the tenant such as utilities or council tax, these must be deducted before working out the 10%. 

What is the renewals method?

The renewals method allows landlords to offset the costs of renewing or replacing an item. The property does not need to be fully furnished to do so. This method also has certain things to consider before claiming. Renewals do not apply to initial costs of items. For example, a landlord cannot offset the cost of new furniture for a property against their annual property income tax bill. However, should they buy a fully furnished property and choose to replace the items because they are old or worn-down, they could offset this cost against their annual property income tax bill. 

But which method should you choose?

It’s important to make the right decision, as the method chosen must be carried on for the duration of the property ownership. In other words, a landlord couldn’t choose wear and tear whilst it works in their favour, and then switch to the renewals method when things change. So, here are some things you should bear in mind…

Is the property furnished? Unless it is fully furnished, you cannot claim wear and tear allowance.

Are you going to be fully furnishing the property to a high standard? If so, we suggest wear and tear allowance. A high standard of furniture will most likely not need replacing for many years, and so the renewals method would be pointless. This logic also applies to landlords that plan to sell their property quickly, as the furniture will most likely not need replacing before the sale.

Who are you renting to? It is recommended that student landlords choose the renewals method, as with an annual turnover of new tenants, the furniture will need to be replaced more regularly.

If you are a landlord and would like to know more about our property management services, please visit mistoriaestateagents.co.uk/landlords/ or to find out more, contact us on 0800 500 3015.

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“Don’t hang on to your money” – our advice to FTBs as house prices rise

There has been much talk and speculation lately about house prices being on the up.  Whilst this is certainly good news for sellers, the housing market as a whole and the economy, buyers, and particularly first time buyers (FTBs), should look to act quickly.

Buy now!

If you’ve been saving for that eliusive deposit for your first mortgage or have been pondering on that move to a larger property, our advice is “don’t hang on to your money”.  If the predictions are true (and all the evidence indicates they are), house prices are set to continue growing steadily over the next few years.  This growth will spell even higher deposits for first time buyers and difficulty in upsizing for those already on the property ladder.

Mistoria’s Senior Estate Agent Mike Quinn explains, “For the last five years or so, since the recession, the UK’s housing market has struggled to recover.  Although this upward trend is what the market needs, those not already on the ladder may find it even harder to get there.”  He summerises, “If house prices go up, so do deposits.”

Boom!

Some experts warn the industry could be heading for another crash if house prices grow too quickly. Mike comments, “As demand increases, prices will rise and without suitable housing to fill in the gap, we could be in danger of another bang.”  As buyers overstretch their purse strings, the Government’s ‘Help To Buy’ scheme – introduced to help get first time buyers on the property ladder by providing financial assistance  – could help counter this scenario.

“The housing landscape is volatile and there are no guarantees when it comes to price trends” continues Mike.  “Our advice to FTBs as house prices rise: if you’ve got a deposit – even if it’s not the full amount that you wanted – now is probably the time to look at getting a mortgage.  Even if it’s on a smaller property than you had planned, we say get on the ladder sooner rather than later!”

Mistoria Estate Agency are a team of finance professionals and estate agents with many years of experience in successfully buying and selling property across the North West.  If you need help and advice buying or selling a property please call us on 0161 707 6106 or email info@mistoriaestateagents.co.uk/sales.

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Mistoria Estate Agents ‘Guide to your First Student House’

Student Property GuideSo, you’ve got your results and you’re definitely off to uni in September.  Exciting times ahead but have you got your accommodation sorted yet?

With A-Level results now out, many of you will be confirming university places and looking for suitable student halls and houses.

If you find yourself going through the clearing process and suddenly going to a different university in a different city to the one you’ve planned, you might well be panicking about where you’re going to be living.  Enter Mistoria Estate Agents.

Our handy ‘Guide to your First Student House’ can help save you time and money on the daunting process of finding student accommodation that is right for you.

Covering the main dos and don’ts, this free student property guide covers the key points you need to think about when renting your first student home.

 

Download our Guide to your First Student House

 

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Dealing with property damage

While it’s tempting to put off or overlook dealing with property damage, the consequences can be severe. Whether you’re looking to buy or sell, don’t get caught out by degradation.  In keeping with our theme on presentation of property in the market, we thought we’d delve a little deeper into those common problem areas that the property-savvy need to look out for the most.  From creeping damp in the cellar to a leak in the roof, there are all too many ways a property might fall in to decline with potentially costly consequences.  When it comes to choosing or maintaining a property, you can’t be too careful.  It’s so important to know what to look out for, so we’ve come up with a short list of some of the weasels that can threaten the integrity of a property:

  • Cracked Ceilings – Elephant in the room. Prospective buyers might be too polite to ask about cracks in a ceiling, but you can be sure they’ll notice them – don’t be fooled by phrases like ‘what lovely alcoves’, they know.  While many cracks are superficial it’s not wise to ignore them.  There might not be a problem but if cracks appear, be sure to do a bit of investigation.  If there is a problem then get it sorted out because further down the road you might end up paying through the nose for it.  If you’re looking to buy, don’t be shy about asking questions.
  • Mould/Damp – Gross.  As well as being unsightly, mould can cause serious health problems when not treated properly.  There’s no excuse to let it linger, with a range of products available in most supermarkets it’s a ten minute job to get rid of it. But it’s also important to consider what’s causing it.  Faulty extractor fans are a likely culprit, as well as dodgy window fittings.  If it’s the latter it’s really worth sorting it out sooner rather than later as it’s not the sort of problem that will diminish over time, quite the opposite, and neither will the cost.
  • Roof Damage – Nightmare. It’s bad luck to open an umbrella in doors and you won’t fancy getting the ladders out in a storm to shakily get on top of the house for a spot of DIY? Make sure you give your roof the attention it deserves as leaks can be severely damaging to ceilings, loft beams and, not to mention, anything electrical. A particular concern for older properties, make sure the roof is in good nick; if the building has a chimney it’s especially important; an insecure chimney-breast could cost a fortune to repair, and it’s dangerous.
  • Floods – Dam!  With increased flooding, year on year, across the UK, you’ve no doubt seen the chaos and damage that flooding inflicts on people as well as their homes.  It’s a costly, messy business to clear up so if you’re in charge of a property in an area that’s known to be at risk, take pre-emptive steps to fortify your home against the worst of flood damage as this will definitely be an advantage when it comes to selling.  If you’re looking to buy, be sure to ask your agent plenty of questions about the flooding history of the area as well as any alterations that have been made or may be required in the future.
  • Quakes/Shakes – Shocking.  Over time vibrations can wear away at your home.  Whether it’s by a busy train line or a local fracking site, when considering/maintaining a property it’s essential to factor in any seismic threats as they can cause real structural damage to your home.  Regular inspections of the property’s foundations and brickworks are advised to maintain structural integrity and to avoid potential disasters.

All buildings have to abide by certain standards to be deemed fit for purpose.  Working with a surveyor is a great way of keeping your home up to scratch and to avoid getting a rough deal if you’re looking to buy.  Property is an investment, take care of your assets.

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Salford Landlord Accreditation Scheme

Did you know we are part of the Salford Landlord Accreditation Scheme (LAS)?

LAS is a voulntary scheme, working in partnership with Salford City Council and other private landlords and managing agents in the city.  The scheme serves to benefit both landlord and tenant by improving the image and standards of private rented accommodation and has attracted 750 landlords with over 3,000 properties.

As part of our membership we are committed to attending regular LAS meeting to ensure we are up to date with the latest industries legislation.  With an ethos of good practice and a Code of Standards to adhere to, the Salford Landlord Accreditation Scheme provides tenants with peace of mind that all our properties and installations meet approved criteria and safety standards.