What is an EPC and how do I read it?

Energy Performance Certificates (EPCs) were introduced in 2007 to give buyers a better understanding of the energy efficiency of a property they may wish to buy. The EPC is a legal  requirement if you are selling or renting a property and are valid for 10 years from date of issue.

An EPC document includes an assessment of the current energy performance and estimated energy costs of the property as well as its potential future energy efficiency, if you were to implement the recommendations in the report.

1.The EPC rating graphic

The ratings graphic shows how efficient your property is on a scale from A (very energy efficient to G (not very efficient). The higher the rating, the lower your potential energy costs will be.

Each letter is also assigned to a group of numbers (from 1 to 100). The higher up the scale, the better the property's efficiency.  The first of two arrows shows the propertys current rating, whilst the second highlights the property’s potential rating if more energy-efficient features were to be installed.

The average EPC rating for a home in the UK is D.

The report goes on to details the changes you could make to improve the energy efficiency of the property, as well as detailing the estimated costs and potential savings you could make.

Who needs an EPC?

Sellers : It's a legal requirement to have an EPC for your home, before you sell it. You can arrange it through your Estate Agent, or directly with an EPC provider. The EPC register lists approved providers: https://www.epcregister.com/

Buyers. You should receive a copy of the EPC from the seller. Which you can use to plan energy efficiency improvements to the property or to negotiate the property price you pay.

Landlords. It is a legal requirement for buy-to-let properties to have an energy efficiency rating of E or above, before you can take on a new tenant or renew an existing contract. Later this year the rule will apply to existing tenancy agreements too.

Tenants. You should receive a copy of the EPC for the property you are renting. It will help you plan and budget for energy costs.

How can you improve the energy efficiency of your home?

Upgrade your bathroom and add value to your home

If you want to add value to your home, and make it a better place to live upgrading your bathroom can bring surprising benefits. One of the most important rooms in a house, it's a place where you can relax and unwind after a hard day. As well as get ready before going out or calling it a night.

By increasing the value of your property, a revamped bathroom can help differentiate your property, if you decide to sell, and help you realise a better selling price. It can also help you build more equity in your property enabling you to re-mortgage or raise finance from the equity in your home.

To get the maximum increase in value, consider the following:

  1. If you have the room, install a second sink. They're invaluable for busy families and couples alike. If you install one, you'll wonder how you managed without it!
  2. Upgrade your shower. A brand-new shower will instantly make your bathroom appear cleaner, brighter and more inviting. Your shower can be electric, use a thermostatic mixer, be digital or a power shower. And there are a wide variety of shower options ranging from rain shower heads, wet rooms and shower columns. And tat's before you consider the screen, sliding doors or curtains available!
  3. Add storage. It's surprising how much storage you need in a bathroom. From hair products, skincare, hand wash, dental products, shaving kits, cleaning sprays, toilet roll, medicines, pampering essentials, towels and more. Choose from built-in or freestanding cabinets. Or, if you have awkward spaces get custom-made units or shelving.
  4. Update your colour scheme. Neutral schemes are best, especially if you are thinking about selling your home in the near future.
  5. Extend your bathroom. If you have the space, extending your bathroom can pay dividends. Just make sure you're not compromising the space in a bedroom or other important space in your home. If you can't extend, how about converting a box-room or cupboard into an additional bathroom?
  6. Don’t forget the plumbing! If you live in an older property, it's worth checking the plumbing to ensure it's in a good state of repair and meets current building regulations. An experienced plumber can advise you and can highlight any potential problems before you start.

If you need any advice about renovating a bathroom to add value to your home, contact us today.

Buying and selling over Christmas

Think you need to avoid selling your property over Christmas? Think again. Potential buyers have more time over Christmas and, according to Rightmove, the Christmas period and particularly Boxing Day, is one of the busiest of the year, with people searching for a new home.

So, what do you need to do to maximise a potential sale over Christmas?

  1. Make sure your property is visible online and listed with all the major property portals.
  2. Winter viewings. There's something quite special about a property dressed with Christmas decorations. Stepping into a warm house, with the light of a fire and twinkling lights can show off a property at its best. Helping prospective buyers visualise living there.
  3. Serious buyers. People house hunting over Christmas are more likely to want to complete early in the New Year. You'll get a greater proportion of motivated buyers, looking to agree a sale.
  4. Plan ahead. Don't leave putting your property on the market too close to Christmas. Whilst your home will look attractive  with Christmas decorations, you want to ensure the photos of your property are taken before the decorations are put up.
  5. Ready for the New Year. Once Christmas is out of the way, there is a traditional New Year rush, as families make the decision to move over the Christmas period. Getting your property listed before Christmas ensure you are ready to make the best of this busy time of year.

If you need advice about selling over Christmas, contact us today.

How to add £50k to the value of your house, in less than one week

According to the Federation of Master Builders (FMB) and the Home Owners Alliance (HOA), you can enhance the value of your property by almost £50,000 simply by removing an internal wall to create an open plan kitchen and dining area.

Chief executive of the FMB, Brian Berry, said the work would cost less than £3,500, take seven days to carry out, and would add £48,417 to an averagely priced home in London.

"By investing in low-cost, high-return projects, not only will you make your home a more pleasant place to live, you’ll also be increasing its value significantly. Better still, these projects take no time at all so the hassle factor will be kept to an absolute minimum," he said.

But what if this isn't an option? What other projects could you invest in to significantly add value in a short amount of time? Here are some options:

  1. Build a garden room or outside playroom. Typical costs for this project will be in the region of £6,500, but will add an average (in Surrey) of over £35,000. A massive £28.5k profit.
  2. Update your kitchen. With careful planning this could cost in the region of £4,000, but could add almost £27,000 to the value of your property.
  3. Turn a cupboard into a downstairs toilet. With an initial outlay of just over £2,500 it could add up to £24,000 to the value of your property
  4. Add an en-suite bathroom.  Converting part of a bedroom into a a bathroom can cost as little as £4,700, but add in excess of £14,500 to the value of your home.
  5. Add a driveway. If you have the space, buyers will pay more for a property with added parking space. For an investment of £2,200 you could add £13,300 to the value of your property.
  6. Install decking. For just under £4,000 you could add decking and lighting generating additional value of up to £9,000.

Potential returns will vary by property and location. Contact us if you'd like specific advise, before you invest the money.

Private Residence Relief Changes

Did you know that when you rent out all or part of your home a Capital Gains Tax (CGT) charge may apply when you sell the property? Currently, HMRC exclude the last 18 months of your ownership – even if the property is let for this time – when assessing any CGT liability. However, in a draft of the Finance Bill released earlier this year, HMRC have confirmed that this 18-month period will be reduced to 9 months from April 2020. Disabled property owners, or those in a care home, will continue to be exempt for 36 months.

The Finance Bill also outlines a change to the letting relief rules…

Letting relief is an extra deduction you can make from any CGT payable when letting your home. Under the rules, you can claim the lowest of the following three amounts:

  1. The same amount that you can claim as private residence relief.
  2. £40,000.
  3. The same amount as the chargeable gain you made from letting your home.

From April 2020, you will only be able to claim this letting relief if you are in shared occupancy with the tenant.

Property owners that are considering the sale of their home – which is or has been let for any period - may be advised to complete their sale before April 2020. In this way they will benefit from the 18 month exemption and the more flexible lettings relief.

The house buying fees you'll also need to budget for

If you're thinking about buying a new home, you'll need to budget for more than just the deposit. It's a stressful time, saving! You work hard to put away savings each month and feel like celebrating when you have saved enough for that all important deposit. But don't get carried away too early, as there are other costs that you need to take into account!

When you're working out your 'buying a house' budget, you also need to take account of the cost of buying, your mortgage fees and moving costs - on top of your deposit. It all adds up and can easily plunge you into debt if an unexpected bill hasn't been taken into account.

Here's what you need to know about and budget for:

  1. Mortgage fees. On top of your deposit you need to take account of the charges that your mortgage provider will require as part of the application process. These can vary from a few hundred pounds to several thousand pounds. Shop around to get the best possible deal. Also bear in mind that an electronic transfer fee is often applicable when the mortgage is paid out. This is often in the region of £50.
  2. Surveyors fees. You may view this as a necessary evil in order to comply with your mortgage, but having a professional survey could save you thousands in the longer run. A basic survey could be as little as £250 to £300, but really amounts to little more than a valuation. Paying extra for a homebuyers report, or even a full structural survey, could identify issues that enables you to renegotiate the price or save you money and headaches in the longer term.
  3. Legal fees. You will need a solicitor to carry out the legal searches on your property; to identify if a new motorway is likely to be built alongside your new property, for example. Fees for these are typically less than £250. Whilst the paperwork for the purchase of your property could cost £1000 to £1500.
  4. Stamp duty. Depending upon the purchase price of your property you will need to pay stamp duty to the Government. If you are a first time buyer you won't pay stamp duty on the first £300,000. Whilst you are only exempt from paying stamp duty on the first £125,000 if you are not a first time buyer.
    Rate Charge Band
    0% Up to £125,000

    First-time buyers: first £300,000 for property up to £500,000

    2% Over £125,000 to £250,000
    5% Over £250,000 to £925,000
    10% Over £925,000 to £1,500,000
    12% Over £1,500,000
  5. Estate Agent fees. You only pay estate agent fees of you are selling a property. So if you are a first time buyer, you shouldn't need to budget for Estate Agent fees. If you are selling, the fees are typically one to three per cent of the final sales price. With VAT usually chargeable on top of that.
  6. Moving costs. Unless you are prepared to rent a van and move yourself, you will need to budget for a professional removal company to move your possessions. Fees are typically £400 to £600.
  7. Decorations and refurbishment costs. It's worth being clear exactly what is included within the sale. If you need to buy carpets, curtains, curtain rails and more, these can quickly eat into your budget. Even a fresh lick of paint can add up. And that's before any more extensive refurbishments that may be required. Where possible get quotes up front, so you know what costs will be applicable after you've purchased the property.
  8. Rates. And finally, make sure you know what rates are payable (to your Local Authority) for the property that you are purchasing. As this can often be another overlooked cost.

Latest Changes To Private Residence Relief

In July the Government confirmed its plans to change the way that Capital Gains Tax (CGT) is calculated for properties that are part or fully let. Currently HMRC excludes the last 18 months of your ownership, even if the property is let in this time, when calculating Capital Gains Tax due. From April 2020 this period will reduce to nine months (the exemption excludes disabled property owners or those in care which remains at the present 36-month period).

In addition, currently you can claim letting relief as an extra deduction from any CGT payable as a result of letting your home. You can claim the lowest of the following three amounts:

From April 2020, you will only be able to claim this letting relief if you are in shared occupancy with the tenant.

If you let part or all of your property and are considering selling it, you may be better doing so before April 2020 to minimise any CGT payable by benefiting from the 18 month exemption and the more flexible lettings relief.

To find out more about this article please contact us.

10 Pitfalls To Avoid When Selling Your Property

Buying and selling a home can be a stressful process, so it's important you are aware of the pitfalls that can cause a sale (or rental) to fall though. If you address these early in the process your chances of the deal going through is much greater.

According to the NAEA (National Association of Estate Agents) Propertymark, these are the factors that most commonly cause issues:

1.      Nuisance neighbours. If you've had an issue with a neighbour eg over boundaries, shared access or anti-social noise you're better off being honest early in the process rather than risk it affecting things later down the line.

2.      Structural problems. If you know of any structural problems with your property, you should fix them straightaway. Or, as a minimum, get a contractor to provide an estimate for the work, so this can be included as part of the negotiation.

3.      Japanese knotweed. This invasive plant has deep roots that can damage the foundations of properties. If you think you have any, call a professional to get rid of it. Not only can it significantly devalue your property, it puts it at risk of subsidence and could affect the ability to get a mortgage on the property.

4.      Rail timetable changes. If you're within a commuter belt. Changes to timetables can affect the saleability (or rental) of your property.

5.      Planning permission. Have you had any work carried out on your property whilst you've been living there? Such as extensions or conversions? If you have, make sure you have all the documents you need to prove they have been completed in accordance with local planning regulations.

6.      Remaining lease length. If your property has a short lease time remaining, you should provide this information as early as possible.

7.      Flight paths. Noise form airports is cited as one of the common reasons why a purchase fails to go through. Be honest with prospective purchasers (or tenants) about how much you can hear and at what time of day you're disrupted.

8.      Parking disputes. If you have a dispute with a neighbour over street parking or shared driveways, try to resolve them with your neighbour first. If necessary, check the deeds of your property to see where boundaries lie.

9.      School catchment areas. This is one of the most important factors for parents of school age children. Make sure you are up-to-date with the local schools, so you can advise if your property falls within the catchment areas.

10.  Damp.  Not only can damp cause damage to a property it can also be a health risk. Most cases of damp are simple and inexpensive to fix. If you're concerned get a specialist company in who can advise what works need carrying out and the potential costs. You may need to factor this into the sale price of your home.

Landlord Rental Income Expenses

If you are a landlord or have a portfolio of properties, you can claim ‘wholly incurred’ expenses against your property income. Expenses must follow the standard HMRC guidance and the expenses must be exclusively for the purpose of renting out the property.

HMRC provide a number of examples of allowable expenses including:

If you buy a new vacuum cleaner for your own home, and also use it to clean your rental property between tenants, you can’t claim the cost of the vacuum cleaner as an expense against your rental income.

However, you could claim the cost of any cleaning products you bought specifically for cleaning the rental property.

Where costs are incurred partly for your rental business and partly for some other purpose you may be able to claim a proportion of that cost if that part can be separately identified as being incurred wholly and exclusively for the purposes of the property rental business. More information on this is in the next section.

Allowable expenses include:

Expenses you can’t claim a deduction for include:

Extending a home without having to submit a planning application

Want to extend your home, or a property that you are planning to buy? Here's how to do it without having to submit a planning application.

Permitted development rights enable homeowners to make certain building works on a property without planning permission from the local council and without approval from a neighbour.

The rules were originally brought in as a temporary measure in 2013, but they have recently been made permanent.

If you are in the process of buying a property (to live in or rent out), this means you have a number of rights to extend or change it after you have completed the purchase.

If your property is semi-detached or terraced, you can add a single-story rear extension of up to six metres. For detached properties, the limit is eight metres. Extensions cannot cover more than half of the land surrounding the original house and materials should be of similar appearance. The rules do not apply to flats, maisonettes or other types of buildings and do not apply to balconies, verandas and platforms (above 30cm).

Before you proceed, it's essential that you check with your local planning authority first. Permitted development rights should provide you with automatic planning permission for:

When might the rights be restricted?

If your property is within a conservation area, a National Park, an Area of Outstanding Beauty, a World Heritage Site or the Norfolk or Suffolk Broads, you will need to apply for planning permission.

Planning  dream home? What else can you do to get around the planning laws?

If your property lies within an isolated location and your renovation plans can be considered 'truly outstanding or innovative, reflecting the highest standards in architecture', under paragraph 79 of the National Planning Policy Framework, you could get planning permission, where standard permissions would not be granted. A number of spectacular properties have been developed using this clause. But be warned! Planning consent for such projects is hard to achieve and you are best advised to select an architect and planning consultant that has experience of and success with Paragraph 79 projects.