The impacts of Stamp Duty changes are unclear

In yesterday's budget announcement, a change to the Stamp Duty payable on Shared Home Ownership properties was mentioned.

The change means that Shared Home Ownership properties will not have to pay any Stamp Duty (if the buyer owns less than 80% of the property).

This change is due to come into force in April, but at present there are no details or Treasury Guidance available to see what the meat of the change will be.

We're investigating and watching developments closely, as we want to know whether it will apply to Joint Equity purchases or not.

As soon as we've found out any more, we'll post the information here.


Tam
Joint Equity Blogger

The Joint Equity guide to renting a room (part 3 - preparing the room, and the rest of your home)

Lots of first time buyers (and some second time buyers, me included) have rented out a room in their homes in order to help with mortgage payments and bills.

I have to say, it's a good plan, but you should take a few careful steps to make sure you get the right lodger, and that your relationship with them runs smoothly. Trust me, it can be a minefield, and I learnt the hard way!

By the way - this guide assumes that your mortgage or lease allows you to rent out a room in the property. Some mortgages and leases do preclude sub-letting, although under The Joint Equity Scheme you can rent part of your home to a lodger.

In this series of blog posts, I address the following topics:

1. Setting the rent
2. Advertising the room
3. Preparing the room (and the rest of your home)
   
4. Holding viewings and interviews
5. Taking deposits
6. Signing tenancy agreements
7. Setting ground rules
8. Dealing with bills (and other stuff)
   
9. What happens when they move out

Today, we're Preparing the Room (and the rest of your home):

So, you've decided how much you want to charge, and have prepared your adverts - now it's time to get the room ready, and to prepare the rest of your home.

This is not rocket science, but it's amazing how many people overlook this.

Just follow these few simple steps though and you'll be fine:

1) Make sure the room is tidy and clean.
Clear out any junk, hoover the floor, give the windows a quick once over, and please do dust the place. You might not be trying to attract a 'clean freak' but it really makes a difference to a room if it's clean as the space just seems to open up.

2) Make the bed.
Any unmade bed looks bad, even a brand-new one with a pristine mattress, so just make up the bed with a matching duvet & pillow set. Nothing fancy required.

3) Make sure that the rest of your property is tidy and clean.
First impressions do matter, so to make your home look welcoming (and worth the price you want to charge someone to live there), tidy away any random bits and pieces and have a bit of a clean round. This means putting away games consoles, loose CD's, piles of books etc etc. Pay particular attention to the kitchen and the bathroom (especially if you are looking for a female lodger, we can be more fussy!).

4) Check out the outside space.
If you have terrace or a garden, this is probably one of your big selling points, so make sure it's looking reasonable. Even at this time of year, a potential lodger will want to have a peek outside and imagine themselves out there in the summertime.

Following these rules shouldn't be too arduous, and will have the double benefit of making the property more attractive to potential lodgers and making it a nicer place for you to live in too!

That's all for now, but next time we'll be talking about holding viewings.

Take care,

Tam
www.jointequity.co.uk

The Joint Equity guide to renting a room (part 2 - advertising the room)

Lots of first time buyers (and some second time buyers, me included) have rented out a room in their homes in order to help with mortgage payments and bills.

I have to say, it's a good plan, but you should take a few careful steps to make sure you get the right lodger, and that your relationship with them runs smoothly. Trust me, it can be a minefield, and I learnt the hard way!

By the way - this guide assumes that your mortgage or lease allows you to rent out a room in the property. Some mortgages and leases do preclude sub-letting, although under The Joint Equity Scheme you can rent part of your home to a lodger.

In this series of blog posts, I address the following topics:

1. Setting the rent
2. Advertising the room
3. Preparing the room (and the rest of your home)
   
4. Holding viewings and interviews
5. Taking deposits
6. Signing tenancy agreements
7. Setting ground rules
8. Dealing with bills (and other stuff)
   
9. What happens when they move out

Today, we're Advertising the Room:

You are unlikely to be surprised to hear that I favour the internet for advertising rooms to rent.

There are so many great sites out there now that can help you do this, and I'm going to take you through the process step by step:

• Do your research

Remember looking through all those ads to see what the going rate for a room in your area was? Well, some of those ads will have jumped out at you straight away, and others won't have. Have another look at the ads that you liked, what techniques did they employ that attracted your attention? Make a note of those things and think about using some of them in your own ad.

• Write your lodger-specification.

All housemates are not created equal. Figure out what you want your lodger to be, and state it clearly in your ad. e.g. 'Non-smoking, cat-friendly, professional female', ' sociable male or female smoker'. This doesn't mean you won't get responses from unsuitable people, but it should reduce the amount of weeding out you need to do at an early stage.

• Decide when you can do viewings.

You are likely to start getting responses very quickly, and you want to get your room let as soon as possible, so block off some time in your diary when you will be able to show people round. An ideal block is 1 weekend (daytimes) and the following Monday, Tuesday and Wednesday evenings. This means that you should be able to get all the viewings out of the way quite quickly, and that your personal schedule is not disrupted too much in the process. Also, your respondents will get a better service from you, as you can tell them immediately when you will be available to show them round.

• Write the ad.

Don't make your ad up once you get to the point of submitting it. Craft some finely honed sentences in Word or another word processing package so that you can copy and paste when you submit. It will save you time.

Don't be afraid of bullet points listing the advantages of the property, and include features like furnished/unfurnished, distance to transport/shops, availability of parking, if the street you're on is quiet, etc. Tell them about who else is living there (don't include details that are too personal, please! Your safety is important).

Remember to include your lodger specification in your ad.

• Take pictures (of the room and the rest of the property).

Many sites now allow you to include pictures for free. This is worth doing, as pictures will always sell any item faster. However, you do need to tidy up before you take the pictures, and make sure that any random items are tucked neatly away. Take several pictures from different angles, and just use the best one or two. Ideally, you should include a picture of the room, one of the living room or kitchen of your property, and (maybe) one of the outside, if it's pretty or you have a garden/patio.

• Upload your ad.

Put your ad on a few different sites. My favourites are: Gumtree.com, Spareroom.co.uk, and Loot.com. You can also try Facebook.com, if you use that already.

• Monitor your ad & tweak (if necessary).

All the above sites have high traffic volumes, so lots of people will see your ads. If you don't get much of a response, then go back to your research and tweak your ads to reflect the good bits of other people's postings.

• Be ready to answer questions.

Get ready for a LOT of questions. This is great though, as it allows you to hone your pitch and weed people out early without having to spend 20mins showing them round your home. If you can't take many personal calls at work, put your email address on the ad as the point of contact, and not your mobile number. You can give your number to any of the email enquirers that you think would be worth speaking to do directly.


If you can follow these steps, you'll have a great advert and have let the room out in no time.

Next week, we'll address preparing the room (and the rest of your home), and 'yes' it is a vital step.

Take care,

Tam

The Joint Equity guide to renting a room (part 1 - setting the rent)

Lots of first time buyers (and some second time buyers, me included) have rented out a room in their homes in order to help with mortgage payments and bills.

I have to say, it's a good plan, but you should take a few careful steps to make sure you get the right lodger, and that your relationship with them runs smoothly. Trust me, it can be a minefield, and I learnt the hard way!

By the way - this guide assumes that your mortgage or lease allows you to rent out a room in the property. Some mortgages and leases do preclude sub-letting, although under The Joint Equity Scheme you can rent part of your home to a lodger.

In this series of blog posts, I address the following topics:

1. Setting the rent
2. Advertising the room
3. Preparing the room (and the rest of your home)
   
4. Holding viewings and interviews
5. Taking deposits
6. Signing tenancy agreements
7. Setting ground rules
8. Dealing with bills (and other stuff)
   
9. What happens when they move out

Today, we're Setting The Rent:

This sounds really easy, and a lot of it is common sense, but there are a few things here that you may not yet have considered.

• Do your research

Find out what the going rate is for a room in your area. Check newsagent's windows, your local papers, Gumtree, Loot, Spareroom.co.uk and even Facebook are good places to check out.

When you are doing your research, bear in mind that rents can be influenced by the size or the room, the standard of the property, the location, proximity to the town centre, transport links, how many other people there are to share with, availability of a garden, etc. However, you should be able to figure out that double rooms have one price range, and single rooms have another. You should aim to pick a price within the general range for your room type, that reflects the advantages (or disadvantages) of your property.

• Go inclusive?

When you are doing your price research, notice the difference between 'including bills' rentals and those 'excluding bills'.

I am a firm advocate of inclusive of bills rentals (this typically means all bills except telephone). The reason that I'm so keen on including bills is that it allows your lodger to clearly see what they are due to pay, and stops you having to divide the bills every month, chase your lodger for their share, and prevents underpayment & all it's attendant arguments.

• Beware the tax implications

The Government has a 'rent a room' scheme, which allows you to rent out a room in your only or main residence and receive up to £4,250 annually without paying tax on the income. This means that you could charge up to £354pcm, if the room is occupied for a whole year, without paying tax.

There are advantages and disadvantages to this scheme, which are detailed in the Revenue & Custom's page on the scheme, but the most important thing to bear in mind is that this figure for total gross income (i.e. if you include bills in the rent, that will be taken off this figure).

Of course, you don't have to use the rent a room scheme, and the tax implications of the alternatives are detailed here.

• Consider the costs of high rents
  

Going for a high rent might look like the best way to make money, but if you're pricing too high for your area, this strategy could actually cost you money.

Slightly cheaper rooms will rent out more quickly, so choose your price bearing in mind what the cost to you would be if you don't get a lodger for a month or more.

E.g. Rent £500pcm and it takes you 2 months to find a lodger, who then takes out a 1 year's agreement (14 months in total). You would receive £6,000 over the whole 14 month period.

However, if you drop your rent to £450pcm and rent it straight away to a tenant who takes out a year's agreement (assuming they appreciate the more reasonable rent and don't leave after 1 year), you would receive £6,300 over the whole 14 months - AND you wouldn't have had to wait 2 months before getting any income.

• Pick and stick
  

Finally, when you decide what you want to rent the room out for, stick to your price. If you allow yourself to be haggled down in price, you are likely to end up feeling resentful towards your lodger and that can lead to bad feeling between you. Not a good recipe for happy co-habitation.

This is why it's particularly important to get your price right in the first place.



Okay - that's all for now. On Monday, I'll be looking at advertising the room, including what to say and where to advertise for free.

Take care,

Tam

Interest rates - maybe going down next month?

Well, the speculation is that we'll see a rate decrease in December (or maybe in January at the latest).

With the Pound so strong at the moment, the general consensus seems to be that rates can't stay at their present level, and they'll have to drop very very soon.

As a mortgage holder myself, I'm hoping for the decrease next month, but let's wait and see. I've learnt my lesson about counting chickens before they have hatched (and it only took me 30 years!).

Take care,

Tam