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Jan 25, 2023 Gifting property: Can I sell my house to my child for £1?

Gifting property to children is becoming more and more commonplace. As the price of property climbs ever higher, this is one solution families are using to get their children onto the property ladder. There are tax implications, however, and it may not be the solution to all your financial issues. Here we look at what happens if you decide to sell your property to a family member for a nominal value. Is this the same as gifting property to children? Yes. Although it will still require conveyancers to handle the legal aspects, the change in ownership will qualify as a gift. Legally it won’t be regarded as a sale, but a token value has to be involved. What do I need to do to sell my house for £1? A conveyancing solicitor will need to be instructed, in order to handle the transfer of the deeds from you to your son or daughter, or other family member. Contracts are still exchanged and completion dates confirmed. So there will still be legal fees to pay. If you own the property with a mortgage, it might not be possible to sell for a purely nominal figure like £1. If there is an amount outstanding on your mortgage, this will need to be covered by the person you are gifting the property to. So it would make sense for this to be the price of the gift. What are the other costs involved? Mortgage redemption costs for gifted property If you do still have a mortgage, are you in a discounted term? If so there will be a redemption figure to pay, along with any outstanding borrowing. Ask your solicitor to contact your mortgage provider for a mortgage redemption statement. Legal fees You will be charged legal fees by your solicitor, but as their workload is not as heavy as a conventional property sale it may be worth asking for a reduced fee. Capital Gains Tax (CGT) on gifted property You are not liable to pay capital gains tax on gifted properties if it has been your Principal Private Residence. There will be CGT to pay if it was used as a business premises or rented out. From any CGT bill you can deduct capital improvement costs, stamp duty, legal fees and estate agents’ fees. Stamp Duty Land Tax (SDLT) on gifted properties If there is no mortgage on the property, there will be no stamp duty incurred. Standard rates of stamp duty will apply if the mortgage exceeds the stamp duty threshold. Stamp duty is also paid if your child already owns another home and is either using the gifted property as a second home or renting it out. Inheritance Tax (IHT) on gifted properties This is one of the main reasons why people prefer to gift property, rather than leave it to children as part of their estate when they pass away. If you do not die within seven years of making the gift, there is no inheritance tax to pay. If parents die within three years, inheritance tax is charged at 40%. After this inheritance tax is charged at what is called ‘taper relief’, and only if the value of the gift exceeds the tax-free threshold. Income Tax on gifted properties There will only be income tax implications if your son or daughter chooses to rent out the property they are gifted, either to you or someone else. Capital gains tax will also need to be paid in this circumstances if the property is sold at a later date. Can I avoid care home fees by gifting my house? People may be tempted into thinking that gifting their property effectively ‘disposes’ of it, so it can’t be used to measure what you can afford should you have to go into a care home. However, this is seen as deliberate ‘deprivation of assets’, especially if the gift is made a short period of time before the care home fees are required to be paid. Local authorities will judge on what the intent was behind your decision to gift the property, and the value of the property will usually still be counted as part of your assets. Sign up today to be among the first to know about property for sale in your area. Can I give my child money to buy a house? Yes. If you want to help your son or daughter raise a deposit you can make a gift to them. All the beneficiary needs to do is provide written confirmation to their mortgage provider that it is a gift, so that it is clear it is not a loan that has to be repaid. Let us help value your property If you are thinking of gifting your house to your child, but are interested to know how much your property will be worth when it is transferred, please get in touch with us and we will provide a free property valuation for you.

Jan 25, 2023 What is a studio flat, and should you choose a studio or one bedroom flat?

If you are looking for a flat to rent and you only need one bedroom, you don’t necessarily need a one bedroom flat. If your budget is tight, or the area you want to live is expensive, a studio flat or studio apartment could be ideal. What is the difference between a studio flat and one bedroom flat? The main difference is that a studio flat has a single living space, with a separate bathroom, whereas a one bedroom flat has the bedroom in a separate room to the living area or lounge. Studio flats are usually smaller than one bedroom flats (but not always). In a studio flat the main living area will be arranged so that there is usually enough room for a bed, wardrobe and storage units, a lounge space for a sofa, coffee table and dining table, a kitchen or kitchenette. What should you consider when choosing a studio flat or one bedroom flat Advantages of a studio flat The main benefit is that the rental charge for studio flats will be lower than one bedroom flats of a similar standard and specification. Studio flats also tend to have a more spacious feel than one bedroom apartments. Another advantage is that studio flat tenants will usually have lower energy bills than those in one bedroom flats because there is a smaller space to heat. Never underestimate the fact it is also less space to clean! Advantages of a one bedroom flat The main advantage of a one bedroom flat is that the flat will have a more conventional floor plan, with the bedroom being in a separate room to the living room and kitchen. This gives more privacy for people living there. A couple, for example, could have different work patterns, so may have to sleep during times when their partner is at home in the living area. A one bedroom flat will usually mean a larger area for storage space too. Renting a studio flat Studio flat layout The common layout of a studio flat is composed of a main living space with a kitchen area or kitchenette, and a separate bathroom. People renting a studio often divide up the living space into separate areas by using things like floor to ceiling bookcases, room divider curtains or sliding doors. What is the minimum size for a studio flat? By law a studio flat has to be 70 square feet to house one tenant, and two tenants require minimum floor space of 110 square feet. A typical studio flat is around 250 square feet. The largest studio flats (excluding loft apartments) are usually about 600 square feet. Are all bills included with a studio flat? Sometimes landlords include all bills in the rental for a studio flat, but not always. Check with the letting agent whether bills like gas, electric, water and council tax are all-inclusive. Sign up today to be among the first to know about property to rent in your area. Different types of studio flat What is a self-contained studio flat? If accommodation is described as a ‘self-contained studio flat’, it means it is a single room with living space, kitchen and bathroom facilities self-contained within it. There are no shared facilities, but these kind of studio flats are likely to be much smaller than a typical studio. The ‘bathroom’ in a self-contained studio is likely to just be part of the single accommodation unit, rather than a separate room. What is a semi studio flat? A ‘semi-studio flat’ is a term increasingly used by letting agents to describe accommodation that is significantly smaller than an average studio flat or self-contained studio flat, but usually with the same basic elements. Some semi-studios are too small to have a sink, toilet and shower, so you may have to share bathroom facilities with other tenants of the building. Making the right choice for you If you want to know more about renting a studio flat or the types of studio flat Howards have available, talk to our expert team today!

Jan 25, 2023 What does sold STC (subject to contract) mean?

Sold STC (subject to contract) is when a seller has accepted an offer to buy their property, but before exchange of contracts. The estate agent should take the property off the market, put up a ‘Sold: STC’ sign outside the property and describe the property in online listings as ‘Sold STC’. There is, however, nothing legally binding about ‘Sold STC’ in England and Wales. It is an informal acceptance. Buyer and seller can both change their minds. If higher offers come in, an estate agent is legally obliged to pass them on to the seller. The buyer can also renegotiate the price or withdraw their interest in buying the property. It is only when contracts are exchanged that the purchase becomes legally binding. What is the difference between ‘under offer’ and ‘sold STC’’? When a property that is up for sale is described as being ‘under offer’, it means that an offer has been made by a prospective buyer. The sellers are considering it but not yet decided whether to accept it. Buyers can still make other offers. ‘Sold STC’ means that an offer has been accepted but contracts have yet to be exchanged. How long does sold STC take? There are no hard and fast rules for the length of time the sold (subject to contract) stage takes in the buying process. It will take as long as the financial and administrative aspects of the conveyancing process take to be put in place – such as the survey, the searches, the mortgage application, itemising the fixtures and fittings in the property. This might take anything between 6-12 weeks depending on the complexity of any issues found. Could the sale of a property sold STC fall through? Yes. There is nothing guaranteed about a property completing after it has sold STC. In fact 25% of all prospective purchases that reach under offer or Sold STC fall through. ‘Gazumping’ is a very real practice and there is nothing illegal about it. Sellers can still consider higher offers than the one they have accepted. Buyers can withdraw their original offer if the survey reveals a major problem with the building or a legal search has revealed planning issues about the area. Can you still live in a house sold STC? No, you can’t move into a house while it is still at the Sold STC stage. Contracts must have been exchanged and completed. When contracts are exchanged deposits are paid and there are major legal and financial implications in either buyer or seller pulling out. Protection from sold STC issues Because there is nothing legally binding about the ‘Sold (subject to contract)’ status, buyers and sellers have the freedom to do whatever they want up to the point when contracts are exchanged. Neither has more legal protection than the other while the property is still only Sold STC. Sign up today to be among the first to know about property for sale in your area. Let Howards help you find your next home We are dedicated to helping people buy a property. For more advice on the buying process, contact Howards today.

Jan 25, 2023 How to increase rental yield

There are many things a landlord can do to increase rental yields. It might involve spending some money on their properties, but in the long term it may provide opportunities to legitimately increase rents and boost annual yields. What is rental yield? Rental yield is the annual rental income, divided by the total property investment a landlord has made, expressed as a percentage. Anywhere between 5%-8% is generally considered a good rental yield. Sign up today to be among the first to know about property for sale or to rent in your area. Calculating rental yield The easiest way to calculate gross rental yield is to divide the rental income you receive from a property (let’s say £1000 per month X 12 = £12,000) by the price you paid to buy the property, then multiplying this figure by 100 to end with a percentage. So if the property cost £250,000, the gross rental yield would be 4.8%. However, landlords also need to factor in all the other expenses involved in letting the property. This will be the costs of maintenance, marketing and managing the property, including mortgage repayments and insurance premiums. These need to be totalled up over a year and added to the purchase price. So the net rental yield (the yield in real terms) will be lower than the gross figure. Top tips to improve rental yield Boosting your rental yield is an important consideration for landlords. It could be the difference between making money from letting a property or not. But you should also think about the long term impact of decisions you make and how they will affect your tenants. There are lots of things to mull over as you consider how to increase rental yield. Invest wisely Investing in property requires a lot of research, hard work, and dedication. With each new purchase you will become more experienced and better equipped for the next investment. Nevertheless, it is always important to treat every new property as a business decision by carefully studying each potential investment as well as negotiating where possible in order to maximise your return. Review your outgoings The first place to start when thinking about improving rental yield is to look at your fixed costs. These are costs like your mortgage payments, insurance premiums and leasehold fees. Shop around to see if you can get a better deal on your mortgage and buildings insurance. Invest in up-and-coming areas Look at where the best locations are to achieve greater rental yields. Where are the up and coming towns and cities, with planned regeneration and government investment? Major infrastructure projects (such as HS2 and Crossrail) can give some areas a real boost, with the prospect of increased capital growth and greater rental values for the future. University towns and cities are also locations where yields can be significantly higher. Properties can be rented by multiple tenants who share facilities but are not part of the same household. These are called HMOs (Houses of Multiple Occupation). The drawback of HMOs for landlords is that there will be a higher turnover of tenants. Re-assess the rent you’re charging The easy solution for improving rental yield is to charge a higher monthly rent to your tenants. However, it might not always be reasonable or fair to do so. Ask a letting agent to assess the market rate for similar properties in the local area – you might be charging less than you could, or you could actually be over-charging. Rent review clauses in tenancy agreements give you the option of charging a different rate of rent during a tenancy. Refurbish/redecorate your property Make sure the condition of your property justifies any increases in rent you may be considering. Refurbishing and redecorating your property could also help in establishing long term tenancies, as it will show that you care about your tenants and encourages them in turn to treat the property with more respect. Doing some repainting, replacing carpets and giving bathrooms and kitchens an update could make tenants feel happier about paying a higher monthly rent. Aim for long-term tenants One of the best ways to increase rental yield and reduce your outgoings is to have the same tenants staying in the property for a significant amount of time. You won’t have the one-off costs involved in changing tenants regularly, or the maintenance expenses that are likely to be involved with a high tenant turnover. You can try and secure more long term tenants by being diligent with your tenant referencing process, looking after the property well and fostering good relationships with the tenants. Consider allowing pets To make your property more appealing and unique, you could become pet-friendly. The number of rental properties that allow pets is getting fewer and fewer, especially since the Tenants Fee Act limits the power of landlords to charge a higher deposit to cover potential damage. But prospective tenants who know they won’t be separated from their pets could be wiling to pay a higher rent as a premium. Improve the energy efficiency rating Making your property more energy efficient will also help to reduce energy bills, and perhaps make your tenants more willing to pay that little bit extra. It can be used as a selling point, if tenants can look forward to living in a warmer house that costs less to heat. Have you got the opportunity to extend your property? Not all landlords will have this option, but if there is space you could look at adding more rentable rooms, or increasing the living space. An attic could be turned into another bedroom, for example. Find out more about haart letting property management If you have a property to let, we can help with a range of property management services, advice and information about the lettings process.

Jan 25, 2023 What is a sitting tenant and what are their rights?

You may have heard the term ‘sitting tenant’ and wondered what it means. Here we explain what rights a sitting tenant has, how a sitting tenant may affect a property sale, and the choices landlords have if they are buying or selling a property with a sitting tenant. What does 'sitting tenant' mean? A sitting tenant, or ‘tenant in situ’, is a tenant that is still living in the property when it is sold by a landlord. This could be because a tenancy agreement is still in place. Buyers can respect the tenants’ right to remain living in the property. But a seller may choose to evict the tenants, if they are able to do so, because the selling price will be negatively affected with a tenant in situ. Sign up today to be among the first to know about property for sale or to rent in your area. What rights do sitting tenants have? Sitting tenants do have rights. If they have an ongoing tenancy agreement with the landlord who is selling the property, they have the right to remain residing there even after the sale. In the unlikely event that the tenancy began before January 1989, the sitting tenants can exercise their rights to ‘security of tenure’ under the Rent Act 1977. In these cases, tenants can remain in the property even after their agreement has expired or been terminated. A landlord has to prove they have ‘ground for possession’ for a pre-January 1989 tenancy in order to evict the tenant. However, there will be few tenants today with such a long standing agreement. Most tenancies these days are assured shorthold tenancies, which gives a landlord the right to use an eviction notice, even for a sitting tenant. Buying a property with sitting tenants If you are buying a property which has sitting tenants, the price you pay will be lower than similar properties which are sold with vacant possession. So if you want to save some money on the purchase this is a great way of doing so. However, you may struggle to get a mortgage offer on a property with sitting tenants, so this might only be an option for cash buyers. You could just wait until the tenancy has come to an end or the tenants have been evicted. Are you buying with a view to letting out the property anyway? Many landlords prefer to have a sitting tenant in the property they are buying, especially if they are long term tenants. It saves the hassle and expense of finding a new tenant, and continuing with a long term tenant is a much less risky option. The new landlord usually takes over the ownership of the tenancy agreement after the property sale. Selling a property with tenants in situ Landlords who are selling a property with sitting tenants may find it difficult, but not impossible. If they allow their tenants to remain in residence, the buyers of the property are likely to struggle to get a mortgage and proceed with the purchase. However, sales with sitting tenants are on the increase. If the sale does go through, the selling price will be lower with sitting tenants. If the landlord chooses to evict the tenant, the sale may be saved or run more smoothly, but rental income will be lost for the time it takes for the sale to complete. Frequently asked questions What qualifies you as a sitting tenant? Sitting tenants are those that have a tenancy agreement or agreement with a landlord in place at the time a decision is made to sell the property they are living in. You have more rights as a sitting tenant if your tenancy began before January 1989. Can you evict a sitting tenant? If you prefer to have vacant possession of the property, to live in the property yourself, or want to find new tenants, you have the right to evict the sitting tenants with a Section 21 notice. Do sitting tenants have the right to buy? Sitting tenants or tenants in situ do not have an automatic right to buy the property they are living in, unless it is a property owned by a local authority. Can you increase the rent of a sitting tenant? Normal sitting tenants have the same rights to fair rent as any other tenants. Landlords can only increase the rent when an existing tenancy agreement expires, unless the tenancy agreement has a rent review clause. If the sitting tenant has security of tenure (explained above), a landlord can only request to put the rent up through a review process. This can only be undertaken every two years, and has to be carried out by a Rent Officer. Find out more about Howards' letting property management If you have a property to let, we can help with a range of property management services, advice and information about the lettings process.

Dec 19, 2022 Howards Season Greetings 2022

The festive period is truly underway at Howards and we can’t wait for Christmas Day! We wish you and all your family a wonderful time during the seasonal period. We wish you a happy, healthy and prosperous year ahead. As part of the seasonal festivities, our opening times across all of our branches have been altered slightly. Please see below as to how it may affect you: Sales & Lettings Branches Friday 23rd - Normal business hours Saturday 24th - Tuesday 27th - Closed Wednesday 28th - Friday 30th - 10am - 4pm Saturday 31st - Monday 2nd – Closed Sales & Lettings Contact Centre Friday 23rd - Normal business hours Saturday 24th - 8am - 2pm Sunday 23rd - Tuesday 27th - Closed Wednesday 28th - Friday 30th - 8am - 10pm Saturday 31st - Monday 2nd - Closed Sign up today to be among the first to know about property for sale or to rent in your area.

Nov 9, 2022 When is the right time to sell?

There are a lot of myths surrounding the best time to sell your home or property: You should wait until spring to sell; When you get an offer you should make the potential buyer wait; Price it high then reduce it if it doesn’t sell quickly. Although many myths can be easily dispelled, how do you tackle the one about when is best to sell your home? At Howards, our mission is to get you moved, so we put together this article to guide you. Spoiler, there is no one size fits all for the best time to sell a property — but that’s where our expertise comes in. Our agents use their local knowledge of your area to make sure you get the best sale possible. They know the best time to sell for you. That being said, here are some factors to take into account when you are thinking of selling. Which season is the best for selling your home? When you start researching, spring is often suggested as the best season for house selling. Winter becomes tricky as Christmas takes up a lot of people’s time, and summer is a time that families (and indeed everyone else) take for travelling abroad or taking a holiday at home. Spring is when the days begin to get longer, so you get plenty of natural light, plus the garden can look its best during spring as flowers bloom. Although it isn’t impossible, summer isn’t statistically the best time to sell. School holidays mean that if you are trying to sell to a family they might not be around much. Even if they aren’t taking a holiday abroad, childcare will be taking up a lot of parents’ time over summer. Autumn is when things tend to pick up a little after the summer lull, but once October is over people are starting to think about Christmas and not about moving home. Thinking of selling? Read our guide How to Sell Your Property Different times of year suit different types of property Your home may suit a certain type of person better than others. For example, a first-time buyer isn’t likely to purchase a three bedroomed detached house, they are more likely to be looking for a flat or single bedroomed property. According to The Advisory, an independent site that supports people looking to sell their house, January-February and September are the best times to sell to first-time buyers and younger couples. Why? Just after Christmas they will be ready for a new start, especially if they are still living at home After the summer holidays finish, they are looking to be in their new home before Christmas If you are selling a 3-4-bedroom house, your target buyer is going to be more likely to have children or be looking to start a family. For this reason, avoid the school holidays for putting your home on the market. Check when the longer holidays (summer, Easter, Christmas) are for the schools in your area. For bungalows and retirement homes, your buyer will be older or people looking to downsize their home. Older buyers are more active during the warmer months of the year. How does the region your house is in affect a sale? The seasons affect the entire country, but there might be certain regional differences that will determine how quickly a home will sell. Things such as: Council plans to change an area — check local planning permissions. Is the area going to have a lot of work going on? Selling a house during this time might not be the best idea. Supply and demand — you need plenty of people looking to buy, and few competing sellers looking to sell. Check with your estate agent to see if the balance is in your favour. You can also perform a search on Rightmove as if you were a buyer looking to buy a property like yours, or visit the National Association of Estate Agents to view their monthly report on the market. How ready should I be to sell? Make sure that you are ready to move on from your property. That’s both financially and emotionally. Take time to prepare your home for viewings. Read our guide on how to do this here. It's better to be on the market for a shorter length of time because the longer it’s there, the more buyers may see it as having potential problems. So, avoid putting your house on the market before it's ready to go. Adding value to your home doesn’t have to be expensive either. Selling your home? Let Howards help. Get in contact with your local branch today.

Sep 27, 2022 Stamp duty reforms 2022. What’s changed?

Howards has welcomed the Government's ‘mini-budget’, which will bring significant benefits to the housing market. On the 23rd September 2022, Chancellor Kwasi Kwarteng announced cuts to stamp duty in the government’s mini-budget, by increasing the amount at which buyers in England and Northern Ireland will begin paying duty from £125,000 to £250,000. For first-time buyers, this threshold is now £425,000 and discounted stamp duty will apply up to £625,000. What is stamp duty? When you purchase a property or land, you are required to pay a form of tax called ‘Stamp Duty Land Tax’ (SDLT). The amount you pay can depend on the price of the property, the location of the property, whether you’re a first-time buyer or if you’re a UK resident. Sign up today to be among the first to know about property for sale in your area. Stamp duty for first time buyers People buying their first property can often be put off by having to pay stamp duty on top of their deposit, as well other property purchase related fees like conveyancers, property searches, etc. To help first-time buyers, the government has raised the amount they can spend on a property without having to pay stamp duty. First time buyers will now not have to pay stamp duty if their first home costs less than £425,000, which is an increase of £125,000 on the previous level. However, if a first-time buyer does purchase a property that costs more that £425,000, they will be entitled to relief. This means first time buyers purchasing property above the new threshold will pay 5% stamp duty land tax on properties up to £625,000, which is an increase of £125,000 from the previous limit. What are the new stamp duty rates for first time buyers? If you’re buying your first property in England or Northern Ireland from 23rd September 2022, you’ll have to pay the following rates for stamp duty: Property Value  SDLT Rate £0 - £425,000 0% £425,001 - £625,000 5% £625,001 - £925,000 8% £925,001 - £1,500,000 10% £1,500,001+ 12% How does the 2022 stamp duty reform help? The new measures taken by the government will reduce the amount of stamp duty for all property purchases by up to £2,500, with first time buyers also now able to access up to £11,250 in relief. This reformed policy will be a welcome tax-cut for the majority of people purchasing a new (or first) property as they will be able to keep more of their money for additional house renovations or other expenses. This new tax cut will also help increase household purchases and in turn boost confidence in economic growth. What are the new stamp duty rates for non-first time buyers? If you’re not a first time buyer in England or Northern Ireland, from 23rd September 2022 you’ll have to pay the following rates of stamp duty: Property Value SDLT Rate £0 - £250,000 0% £250,001 - £925,000 5% £925,001 - £1,500,000 10% £1,500,001+ 12% Our Senior Team’s View Paul Smith, CEO Commenting on the mini-budget, CEO Paul Smith said: “I’m delighted that Liz Truss is following in the footsteps of Margaret Thatcher and understands the economy is fuelled by a healthy property market. “Thatcher once said that she wanted a capital-earning democracy, which housing was the start of, and if you’re a man or woman of property, you’ve got something.  “I absolutely agree, and clearly the new Prime Minister does, too. “This mini-budget from Chancellor Kwasi Kwarteng is revolutionary on stamp duty - cutting it permanently, and not just introducing a holiday with a spurious deadline, is a massive boost for the market. “This will give a massive confidence boost for those now wishing to sell. “I am also pleased to see that our hard-working colleagues will benefit from a cut in the basic rate of income tax to help them with the cost-of-living crisis – Howards is nothing without our brilliant people.” Antony Lark, Senior Managing Director Group Managing Director, Antony Lark welcomed the stamp duty changes. “This is an extremely positive move and will assist so many people in getting on the housing ladder,” he said. “The fact that this is a permanent change will help ensure we avoid the cliff edge type environment we have recently lived through. “Owning your own home is such an important aspiration for so many and it’s so positive to see the government look to support this to help grow the economy.” Tim Wardley, Managing Director of Land and New Homes Managing Director of Land and New Homes, Tim Wardley added that the 38 investment zones mooted in the so-called ‘Kwasi Budget’ will generate significant growth, thanks to business tax cuts and a fast track on planning applications. He said: “This is great news for our industry right across a board at a time the market has slowed. “The planning system is completely clogged up and anything which can get more houses built is a winner for everyone - buyers, people selling land and developers alike. “The stamp duty cut is also a game changer which begins now and carries on indefinitely, meaning no waiting for start dates or need to hit deadlines. “It’s now time for us to grab this opportunity and make the most of it.” Contact your local Howards branch If the latest stamp duty cuts have prompted you to take the next steps in your property journey, get in touch with your local Howards branch today and we’ll get the ball rolling. We can help you get on the property ladder, find your next home, or if you have a property to sell too, we can offer free no-obligation valuation.