Chicken or Egg?

Ah the age old Question, which came first? Do I find a buyer or a new house first? 

Fortunately, the answer to this is a bit easier to decide.

Without a doubt, make sure you secure a buyer on your existing House before you Make an offer on anything else. If its done right, buyers will flock to your property. 
Until you have an offer you don't really know what you've got to play with.
There is absolutely nothing wrong with checking out the Area where you hope to locate to. Speak to Agents, browse about and have a scout the area. 
But dont get all emotional about anything in particular, because in all likelihood it may have gone when the Time comes.

Having an offer on your home will also en-power you with any negotiation as you will be taken more seriously. 
You will be able move more quickly and dictate the pace more easily.

Want to know more? Email or pop and See me in the Office

Budget: Tax Changes

What Will The Tax Allowance Changes Mean To Bedford Landlords - And What Can You Do About It?

The Chancellor George Osborne sprung a rather unexpected and nasty surprise on Landlords in the recent budget, by restricting interest rate relief on Buy to Let mortgages - now the dust has had time to settle I thought it worth taking a look at what it may mean for Bedford Landlords

The Chancellor has cut the tax relief that private landlords receive on their mortgage interest payments, cutting it from 40% or 45% for higher rate taxpayers to 20% by April 2020

The new restrictions start in the 2017-18 tax year on a sliding scale, and become fully effective in 2020-21

The changes will only affect higher rate tax payers, so Landlords who only pay the basic 20% rate of tax will not be adversely affected

This phasing in will mean that 25% of this extra tax will be payable on profits made in the April 2017- April 2018 tax year, 50% in April 2018-April 2019, 75% in April 2019-April 2020 and 100% in April 2020-April 2021 meaning that the full effect of this wont be felt until your January 2022 personal tax bill is due

On a property worth £100,000, a landlord in a higher tax bracket with an 85% loan-to-value mortgage and a mortgage interest rate of 5% would end up losing £100 a year. When the rate reaches 5.5%, the burden on the landlord's finances will jump again, triggering a loss of £440, and then to £780 when the rate reaches 6%, according to financial experts

Industry professionals say George Osborne's Budget move is likely to hit people who have sunk their money into property because they were getting no interest on their savings in the bank, or following the financial crisis, no longer trust the pension model, and are relying on rental income

Ultimately this change in tax relief for Landlords will not only affect landlords, it will also be detrimental to Tenants because ultimately, if Landlords' margins are squeezed, they will be forced to increase their rents to make their investments work, or sell up

It is still early days and we need to see how HMRC will implement some of these changes but here are some initial thoughts on how we could tackle this change

This change only seems to affect individuals and partnerships/LLPs. Ltd companies seem to be excluded. Landlords could potentially look to purchase their future properties into Ltd companies (if this works Buy To Let lenders will become more open to this-otherwise commercial lenders will already facilitate this)

For those who already own properties personally or in a partnership/LLP they may want to transfer them to a Ltd company (but they will be subject to capital gains tax and stamp duty)

An easier way to do this if you want to keep your current mortgage would be by using a deed of trust, which would transfer the beneficial ownership to a Ltd company

A good solicitor can draw one of these up for you but please seek professional financial advice before doing so as it will affect the way you get your money out in a tax efficient manner (you will either need to take the money out on the form of dividend, salary or bonus, none of which are tax efficient) and furthermore tax on gains will always be payable at some point (capital gains tax stops being payable when you die but Ltd companies are immortal!) 

New analysis from accountants PwC featured in an excellent Daily Telegraph article has shown that if a private landlord transfers one or more properties into a company structure, known as incorporating a business, the total tax rate is greatly reduced.

"This is because a company is paying tax on the actual profit and therefore the rate does not fluctuate wildly. If the profit reduces, so does the tax," said Paul Emery, a tax partner at PwC.

"If the rental property is run privately, there is a scenario where because you no longer get full tax relief for your expenses, you can pay tax even if there is no profit," he added. "That means potentially enormous effective rates of tax."

By 2020, when interest rates are likely to be higher, the levy on a property worth £100,000 to a private landlord in a higher tax bracket - with an 85pc loan-to-value mortgage and a mortgage interest rate of 5pc - would be 106pc

As a result they would expect to suffer an annual loss of £100

If the same property were run as a business, the landlord would pay a tax rate of just 49.2pc and bank £888.

If mortgage rates go up further, the contrast becomes more stark

If rates hit 6pc, a property owner operating under a business umbrella would again pay 49.2pc, but the private landlord would pay 186.7pc tax, and make an annual loss of £780, according to the PwC model

"Other taxes such as stamp duty and capital gains tax could affect profits from a rental business, especially for a landlord with only a handful of properties," warned Mr Emery

If the owner is a sole trader, he would pay stamp duty again on the "incorporation of the business" based on cost of the property

But if the owner is in business with a partner, they could enjoy some stamp duty relief

Alternatively, if a sole trader or business partners own more than six properties, it is classified as a commercial property business and they will only pay a flat 4pc stamp duty on the sale

"The big tax difference is capital gains tax when the company finally comes to sell and dividend the profit to the owner at 49pc compared to 28pc for a private landlord - but at least you would know what your effective rate of tax is, and if you are reliant on the income rather than the appreciation of price, it may be a hit worth taking," said Mr Emery

"Although incorporating your business helps you guarantee your monthly tax bill, it is not a magic solution. Tax is only one consideration when forming a company. For example, audited accounts might need to be filed," he added

Savvy landlords will look to purchase more properties that need refurbs

Another change is that Landlords can no longer claim 10% tax relief for wear and tear (and instead must claim back the actual amount spent) as long as the property is in a lettable condition when you buy it (but still needs redecoration) and comes into the lettings market before the refurb. is done most repairs/replacements such as kitchens, bathrooms, paint etc can be offset against all property income from your whole portfolio

This means that a £7,000 refurbishment could potentially come off all of your other rental income profits

So the solution for those most heavily affected by this tax change could be to buy a few properties that need a refurb every year

Given the changes will only take affect between 2017 and 2020 there's plenty of time to prepare and undoubtedly there will be further advice and guidance over the coming months with strategies being developed to mitigate against the losses 

As always my advice would be to consult an expert on such matters - the above are just a few pointers I've picked up from reading exhaustively about this since the change was announced


If you'd like to discuss what impact this change may have on your rental income speak to an accountant or tax adviser (I can recommend one if you wish) or to discuss any aspect of the Bedford property please drop me a line to nigel.bywater@belvoir.co.uk or Call 01234 290685

Property Focus: Pevensey Road

Property Focus: Pevensey Road

Pevensey Road, Bedford

Located off Arundel Drive this property on Pevensey Road is offered for Sales by Taylors at an advertised Price of £250,000. It offers Three good sized Bedrooms, a Decent Lounge/Diner and reasonable sized Kitchen. A Second Reception room downstairs gives further flexibility to the living space. A Large driveway for 2 Cars with side access leading to Good Sized Rear Garden.

What I like about this Property is it flexibility. 

Firstly, it would make a very nice Family home in a nice quiet central location. 

If you were an Investor it could be let as a Family Home for about £895 pcm. A reasonable 4.25% could be achieved.

However, if you were use the second downstairs Reception Room as another Bedroom you could Attract Sharers/Students. Room Rates could be charged and a much more attractive £1200 could be achieved giving a return closer to 6%. 

Worth looking at considering proximity to University. Employing a good Managing Agent is an imperative though!

Its a shame that Taylors haven't bothered with more Photos......

If you would like any advice whether a client of ours or not please pop in and See me or drop me an Email

Who are you?

OK. So you want sell/Let your House? You open the Times and Citizen to see the plethora of Agents and their offerings.


Some say sold/Let or under offer/similar available so why advertise? Truth is they are not selling/letting houses they are selling their service to you as a prospective Vendor. 

They are trying to build their creditability by demonstrating that they can Sell a house like yours. Its all a ruse, so you contact them for a Market Appraisal.

Reality is nowadays a lot of propertoes are sold/let via the Internet through property portals like Rightmove, Zoopla, Prime Location, Homes24 etc etc etc. The internet's reach is vast, the Local Paper not so.


But people buy from People not some Url: up in Cyberspace.
So I maintain the first question to ask any Prospective Agent is who I am dealing with? Who will be shaking my hand and guiding me through this process?

Many big Nationals have complex structures with teams of staff dealing with the various stages of the Process. Not very consumer focused. A bit like a production line.
Consequently, you might find that, although you were very impressed with Richard who came out to see you and initially took your Instruction.In reality you never see him again and End up dealing with Tom, Dick and Sally who are based 20 miles away at Head Office.

Lets face facts, we are dealing with probably the single most Valuable Asset you have, so you should really be spending some quality time deciding who to Entrust with its Sale or Rental.

Please feel free to contact me and share your thoughts and concerns regarding choosing the right Agent to Market your Property

A Tale of two Properties - Putnoe Lane

Two Properties. One Road. Similar Price. Different Styles. What Outcome?

Putnoe Lane 1 £700,000

Putnoe Lane 2 £695,000


I have been watching both these two for a couple of months now.
Property 1 was originally priced at £750k but has gradually dropped to £700k more in line with Property 2 at £695k. Both offer Mammoth living Space, plots and Specification.
Property 2 was recently refurbished to a high Standard, but offers a much more contemporary Style and Set of Features. But is Bedford ready for this Style?
Putnoe 1 is more Traditional and but with a modern Twist. Which will prevail?
Either way it may take some time as buyers for these sorts of Properties are harder to find and are naturally more selective in there choices.

Watch this space......

Nightmare Tenants, Slum Landlords

Tenant is looking after the Property and keeps it clean and tidy

With Channel 5's Series currently airing on Evening Television, I thought it may be quite topical to look at some of the issues raised.

A good Agent can make the difference to bad situations developing too far. The agent should be inspecting regularly (if you pay them to), advising you on Steps to take and Serving Relevant Notices according to the Legislation.  

So with this in mind,  thought I might offer some pointers on how to choose an Agent:

• Agent Focused on Customer Service for Tenant not just you. Good Idea to Pose as a Tenant to See who treats you Best. After all words spreads about the good and Bad Agents in any town! Tenants like to be treated fairly, so good tenants will naturally migrate to the Good Agents and ultimately your Property.
• Letting Agents are not regulated, but the better ones typically belong to the National Approved Lettings Scheme (NALS) or the Association of Residential Letting Agents (ARLA)
• Ask to See their Terms and Conditions, these may be 40 pages long so it might be worth asking for it to be checked by a legal Professional. All Charges have to be displayed by Law. If not on Display then report then to them The Property Ombudsman (TPO)
• Find out exactly what their service includes. How often they Visit to check the Property, do they do accompanied Viewings. An important Document is the Inventory taken at the Start of any Tenancy. Is this part the Service? A Good inventory will save a lot problems later on when tenancy comes to an End.
• Ask for Evidence of Visits, Inspections, Viewing and Inventories. A good Agent will be proud of the Service they provide and will only be too happy to demonstrate it.
• When you call them on the Telephone and you get the Voicemail, doesn't necessarily mean they cant be bothered, they might be too busy to answer. Just as long they return your call and deal with your question promptly.
• When the Credit Crunch hit in 2007 a lot of Estate Agents understandably jumped on the Lettings Bandwagon. It provided them with an income stream as their Property Sales Evaporated overnight. What I call Accidental Agents. Many of them still are not geared up for Property Management and are paying it Lip Service only. A good way to Check is to Find out where the Property Management (ie. Maintenance Dept) is carried out. You may find its located elsewhere and not necessarily in the same Town, City or County!
• Check to see if they have won any Awards either Nationally for the Larger Agents or at a Local Level.
• Review Sites can offer some guidance although theses can be open to abuse!

In General I would say that Research is the Key. Speak to trusted Friends, Family and Acquaintances to see what experience if any they have. Agents don't generally have the Best Reputation, but their reputation is tarnished by only a small minority.

If you would like any further help or suggestions, please Email or Pop in and See me

Best of Luck!