At a time when the cost associated with landlords in the private rented sector are mounting, the Association of Independent Inventory Clerks (AIIC) has said that a professionally compiled inventory could save landlords money.
Increasing costs for landlords
So, what are the costs that are/will be influencing landlords’ cash flow?
The amount of tax relief a landlord can have on mortgage or loan interest will be restricted to 20 per cent from April 2017. This will be phased in and will reach full implementation in 2020-21.
In 2017-18 the deduction from property income will be restricted to 75 per cent of finance costs and the remaining 25 per cent will be available as a basic rate tax reduction. This will change by 25 per cent every year until 2020-21 where all financing costs incurred by a landlord will be given as a basic rate tax reduction.
On top of this, there is the prospect of higher management costs as a result of the government’s ban on letting agent fees charged to tenants. No date is currently set for this change but it is likely to come into place at some point in 2017.
The past few years have seen expensive changes for landlords as there were also the changes to stamp duty last year for buy-to-let buyers.
How inventories help
Although government interventions have made becoming a landlord more expensive, the private rented sector remains a popular and worthwhile investment option for many. That’s why it is necessary for landlords to take care of their property and save money through fewer repairs when it’s on the market.
An inventory keeps track of and confirms the condition of a rental property before and after a tenancy. This makes clear any damages or repair costs that should be taken out of the tenant’s deposit. Doing so means that the landlord isn’t paying for repairs that were caused by the tenant and weren’t natural wear and tear.
The AIIC has said that a signed, completed and agreed inventory should be a minimum requirement at the beginning of a tenancy. “Landlords who do not have a comprehensive inventory available at the end of a tenancy could, therefore, make it extremely difficult for themselves to claim back funds for damages and lost items,” comments Ms Barber, chair of the AIIC.
Skribes are Birmingham’s leading independent inventory and property services specialists, providing landlords with inventory reports, check-in reports, interim reports, check-out reports and legionella reports.
To find out how we can help make it easier to manage your property, call us today on 07891 551 905 or email info@skribes.co.uk.