Property Management in Putney
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Most property portfolio owners and landlords let properties via a Limited Company, however, from 5th April 2023, you need to be aware of some significant tax changes as they may well affect you. The changes result from the need to recoup some of the money spent during the pandemic and represent another financial hit to the property owner, to join the long list of price rises we have witnessed in the last year.
The main changes to taxation are as follows:
It makes rather depressing reading, but most of the landlords we encounter have a reasonably good handle on the value of their property and the balance of incoming and outgoing transactions. This is increasingly essential if you’re to stay on top of and realise the maximum return on your investment over the time frame you have projected.
But it is a constantly moving target thanks not only to the recent tax changes but the fluctuation in the cost of so many of the necessary services and utilities involved in property management. The rise in energy prices, the cost of building materials and even the cost of transport has meant that overall purchase outgoings are higher.
As such, it’s likely you’ll want to review your numbers and your business model to ensure that it’s still economically viable, as well as look for ways to either make savings or leverage your assets.
The best outcome is likely to be found in playing the long game. Undoubtedly the economic landscape is still volatile and unpredictable, and whilst it’s been suggested that interest rates could lower in the 2nd half of 2023, this is by no means guaranteed. There is a possibility that rates could rise again before they drop, so it’s important to be prepared for this – as far as possible.
Right now, options are to explore different lenders and switch to get a better mortgage rate, fixed-rate term, or a more manageable repayment plan. Flexibility now can allow you to remain on top of finances for the immediate future until calmer waters are reached.
Cutting corners isn’t the answer to saving money, but prudent management is. It may be that any large, planned projects can be delayed for a period. MIH will always look to assist our rental landlords, both commercial and residential, in deferring unnecessary works where appropriate. Where work needs to go ahead, it’s important to get comparable quotes to be certain that you’re getting value for money and the right quality. But beware putting off important work for too long that could potentially lead to a small issue becoming a big problem.
In terms of our block management services, we are conscious of rising costs and try to keep our budgets economical whilst ensuring the needs of the building are met. It is vital that works undertaken are as effective and tax efficient as possible.
A buoyant rental market
On a positive note, the increase in mortgage rates also means that people are postponing getting onto the property ladder at this time. Whilst it may not be ideal for those hoping to become homeowners, it works in favour of landlords as rental property is still in high in demand. And as a result rental charges are competitive and increasing.
It’s worth bearing in mind that there is also some evidence of an increase in missed payments by tenants in certain income brackets, which you may want to plan ahead and have a strategy for. If you have any concerns, it can be better to address these directly and open up a dialogue for discussion, rather than suddenly find yourself short. There are insurance policies to help with this which you may wish to consider if you have tenants in areas of the market with less dependable income.
The MIH team have many years collective years of experience. We have ridden the highs and lows with our clients, landlords and property owners. If you’d like to discuss your property management finances and how best to cope with the current climate, please contact our helpful team: