London properties rented out in August and September go for 11% more than the same property would have achieved in December, according to Edmund Cude, London’s oldest lettings agency.
London landlords can benefit from significantly higher rents if they get new tenants in their properties in the summer rather than the winter and this price seasonality in London’s already hot lettings market is having the effect of increasing yields for those landlords in the know.
‘An 11% higher rent should not be ignored by the capital’s landlords. By having a well placed break clause in a tenancy agreement, landlords are able to re-synchronise tenancies,’ said Robert Nichols, director of Edmund Cude.
‘It might be that demand for short term Olympic rentals comes late, but seasonal summer interest from recent graduates and corporate tenants is available every year. London landlords need to think about how they can benefit from better organised tenancies which start in the summer when demand peaks,’ he added.
Meanwhile, the Landlord Syndicate, a network of companies providing a free support centre for landlords, is advising them to ensure their accounts are in order after reports named East Anglia, London, Leeds, York, Leicester, Nottingham, Lincoln, Durham and Sunderland as areas to be targeted by the taxman.
‘It is always the landlord's responsibility to let HMRC know that they are receiving income from a property, even if they are not making a profit from it. Those that have not done so already need to speak to an accountant or tax advisor as soon as possible,’ said Amer Siddiq, managing director of Tax Insider and a member of The Landlord Syndicate.
‘Every landlord should be prepared in case they get a knock at the door. Even if you have declared your income/expenses, then it is just as important to make sure you have a good book keeping system in place where everything has been logged so HMRC can easily be satisfied that your property accounts are in order,’ he explained.
The Landlord Syndicate recommends that landlords have a separate bank account where rental income goes in and expenses come out. ‘This way, nothing is missed and it is easy to account for all expenses when cross referenced against saved receipts. Landlords should also ensure they get a receipt for any cash transactions carried out,’ added Amer.
He pointed out that some landlords are not thorough enough with their book keeping and are too quick to disregard small receipts but when kept and added together can amount to a significant sum which can be offset against tax.