Landlords: Tips To Overcome Tax Losses Without Hiking Rates
Being a Landlord is difficult. At Villabela, we do our best to assist Landlords here in the North East, and if you ever need help or guidance, please get in touch. We know that changes to the tax imposed on Landlords and rental property has caused issues for many professionals in the sector. Therefore, we want to examine the current state of the market and provide some tips to overcome tax losses without hiking rates.
In figures provided by ARLA Propertymark, it seems that 23% of tenants experienced an increase in their rental fees for March of 2018. This figure was taken from the company’s Private Rented Sector Report and the report suggests that the increases are related to Landlords recouping tax losses. There have been significant changes in the buy-to-let market of late, and Landlords have had a lot of administrative matters to contend with.
Increased rents doesn’t mean increased profits for most Landlords
With rents increasing regularly, there is a perception that Landlords are enjoying a profitable time these days. This is often far from the case. With so many new and additional costs being placed on Landlords, the rental increases are often undertaken to ensure that Landlords turn a profit.
The increase in tenants experiencing rental fee rises was the largest since September of 2017 when 27% of tenants found that their rent had risen. However, even with these increases, information from ARLA Propertymark suggests that demand for rental property is increasing.
Demand for rental property is rising
For February of 2018, the average number of prospective tenants registered with a branch stood at 61 people but for March 2018, this figure had risen to 66. This may not sound like a large rise, but it is important for branches to grow their client base and when you extrapolate this increase out across the country, it shows that many people are looking for property.
The same report also suggested that the supply of rental property increased in March. The February of 2017 figure stood at an average of 175 properties per branch but by March, this figure reached 179. This would suggest that people are still looking to let their property, which is promising given that the challenges Landlords face in the market.
The level of demand for property should indicate some positivity in the market but if rental fees continue to rise, Landlords may find that demand plateaus. There are concerns that many tenants are reaching their ceiling of what they can afford to pay, and further rental fee increases could lead to void properties. This means Landlords must be savvier when it comes to generating income. Some ways that Landlords can generate income without increasing rental fees include:
- Renting out available parking spaces
- Renting storage space
- Offering additional services to tenants such as dry-cleaning services or parcel collection
- Provide additional utilities as part of the rental package
It may be that providing optional services will help a Landlord to generate additional income without raising their base rental income. Not every tenant wants to pay the money associated with extra services, but some tenants will appreciate what is on offer at a fair price.
If you are a Landlord and you require assistance in providing best standard of service while still generating profit, contact Villabela. We are North East property and rental market specialists and we look forward to assisting you.
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