Tag Archives: landlord insurance

Is there a future for traditional estate agency?

view of traditional estate agents for sale and to let boards

I was prompted to write this after receiving something in my email inbox about how traditional estate agencies are suffering in the current Brexit market.

Estate Agencies on the High Street

Once upon a time, if you were looking to sell, buy or rent a property you would either check out the ads in the local paper and/or wander down the local high street and have a chat with people in the local estate agencies. People do still do this, but a huge and increasing number now simply go online, usually heading straight for the main portals like Rightmove, Primelocation and Zoopla, or maybe the agents’ own websites.

Nowadays, there are agents set up to exploit this new world, such as Purplebricks.com who just charge vendors a fairly low fixed fee to market their property. Of course this does save vendors a huge amount but only if the property actually sells, because of course, traditional agents’ fees are dependent on the sale actually completing.

Agents’ high commission

But it is true that with astronomical property prices (in some parts of the UK) the traditional agent’s 1.25% fee actually can translate into a huge amount of cash. It’s not uncommon in London and the South East for quite ordinary properties to sell for £700,000 or more. At only 1.25 % this means that vendors are having to give the agent £8750.00 PLUS 20% VAT. And for agents who are charging 1.5% it amounts to a staggering £10.500 plus VAT!

The High Street Estate Agency – who still needs it?

However, estate agents will rightly point to the huge expense of maintaining a high street presence and having to spend money on expensive newspaper advertising. But are either of these really necessary anymore? How many people actually bother to visit a high street agent with all the problems of city centre parking etc? And do purchasers really pay much attention to the local paper even? Not only are printed ads often out of date but sadly, local papers, like so much other printed media are in serious decline.

Perhaps the future lies in much more ‘stripped-down’ a la carte estate agencies, where they do not maintain high street offices but work out of ordinary offices not in city centres. Furthermore they would not advertise unless the client wishes to pay for it and rely almost entirely on web interaction. This would mean that fees could be much less and still allow the agents to make decent profits.

Landlords and letting property

As for lettings agencies, I think much the same applies. In fact, as a landlord unless you live far away from your rental investment, it really does not make sense to use an agent at all. You can now use companies who will let you access the main property portals for a very small fee. However, if you do not use a letting agent , obtaining Landlord Rental Guarantee and Legal Expenses Insurance together with thorough referencing is even more important – but still much cheaper than using an agent.

I am sure that, except for selling, renting and buying the most prestigious and up-market properties, the future is in this much more ‘stripped-down’ letting or sales agency.

 

Landlords and Letting – Affordable Landlord Insurance

Block insurance – why you may be being overcharged

blockofflats

Block Insurance is essentially the overall buildings cover for blocks of flats. It covers risks to the basic structure. Essentially it is bought by the managing agents, the freeholder or whoever has overall responsibility for the block’s structure. And often leaseholders are paying over the odds for it and sometimes they can do something about it.

Can YOU choose who provides your block insurance?

Virtually all flats, whether in purpose-built blocks or conversions, are held in leasehold. The leaseholder has the property for the term of the lease (99 – 999 years) after which it reverts to the freeholder. In between these two parties there is usually a managing agent. Usually it is the managing agent who selects the block insurance for the property.

Sadly, if you have no control over the management of your block it is often the case that the freeholder/managing agent actually know they are paying too much for the block insurance. I’ll leave it up to your imagination why this might be.

Take back control (to coin a phrase!)

However, if you DO have ultimate control over the managing agents then this article may be of interest to you. It’s worth checking that you and the other leaseholders are not paying more than you need to for the block buildings insurance. Certainly if you have a share of the freehold then you should speak to the directors of your residents’ company and check that you and all the other residents are not ‘paying over the odds’ for your insurance.

We offer very competitive rates on block insurances and all the policies are underwritten by major insurers.

Why not get a quote today. Either email info@landlordsandletting.co.uk or call 0800 783 1626, quoting ‘Landlords and Letting’.

Landlords and Letting – affordable landlord insurances

 

 

Time to reform Stamp Duty Land Tax?

Stamp Duty Land Tax, more commonly referred to as Stamp Duty is not only yet another iniquitous government tax on property, it is a tax designed by idiots – but no surprise there!  See our Poll below…

Stamp Duty Thresholds on Residential Properties (October 2014)

  • £0 to £125,000 – No Tax
  • £125,001 to £250,000 – 1%
  • £250,001 to £500,000 – 3%
  • £500,001 to £1 million – 4%
  • Over £1 million to £2 million – 5%
  • Over £2 million – 7%

Look at the Stamp Duty thresholds above.  This shows the real idiocy of Stamp Duty.  As soon as a property transaction exceeds a specific amount – even by a £1.00, the WHOLE of the transaction is subject to the next level of tax!  Thus if you buy a property for £250,000 you will pay £2500.00 in Stamp Duty, whereas if you paid £250,001 you would pay £7500.03 in Stamp Duty!

As far as really expensive property is concerned, it’s even more ridiculous. Take an example of a property selling for £2 million the Stamp Duty would be an incredible £100,000.  But – if that same property sold for £2,000,001 the Stamp Duty would be…£140,000.07!  In other words about £40,000 more.

Distorting the market

Apart from being an outrageous amount of money, this of course badly distorts the property market, with sales just above one of the thresholds being incredibly hard to achieve.  So, a property valued at £250,000 really achieve £300,000 before you can get the real value when you sell, because buyers will be put off houses that are advertised for say £265000 and will try everything to push them below the threshold.

Dodgy Dealing

Of course, because this tax, via fiscal drag, now accounts for such a huge amount of money, people try to avoid it.  There are various schemes dreamed up by clever property lawyers that involve arcane and complex procedures to avoid SDLT but they are of course risky.  Also, some people claim that part of the price includes fixtures and fittings such as kitchens – but really there is no way to safely avoid this scurrilous tax.

What we need is for politicians to wake up to the stupidity of this tax and if it really has to be at these levels then it should work in the same way as income tax and tax the marginal amount by which a sale price crosses a threshold.  An example would be say a property selling for £260,000 would bear 1% on the first £250,000 and 3% on the final £10,000.  Also, why on earth does it jump from 1% to 3%!

In conclusion, the reason this tax exists in its present form is because it does.  Civil servants and politicians often are incapable of original thought and just go on doing something in the way it’s always been done – just because that’s the way it’s always been done.

Tell us what YOU think

See our Stamp Duty Poll below…

Does the current UK Stamp Duty system need reform?
YES
NO

Poll Maker

Landlords and Letting Landlord Insurances