Allow Landlords to evict tenants where there are 14 days rent arrears14:34 PM, 1st October 2020
About 4 weeks ago 97
News Sourced by Property118
Downletting is the new way to raise cash from a home that you can’t sell, according to letting agents.
Many homeowners have problems selling large properties because buyers cannot raise deposits or mortgages, which means they cannot move on.
To solve the problem, letting agents propose owners can let their homes and use part of the funds to finance renting a smaller property to live in and pocket the rest of the cash as income to boost their earnings.
The process has the same result as downsizing by selling, say letting agents.
“With many potential buyers struggling to secure a mortgage, letting your family home rather than selling offers a strong alternative,” said Tim Hyatt, president of the Association of Residential Letting Agents (ARLA).
“Rental returns stand at an average of 6.1% this year. This substantially beats the returns on many other current investment opportunities.
“ARLA members also report that achievable rent levels are increasing, while demand for good quality rental properties remains high. While market conditions remain so inclined, it could be prudent to let out the family home, and use the monthly rental income to invest in renting a smaller retirement home.”
Downletters have to consider renting out a home will incur some costs, like tax on rental profits, letting agent fees, insurance and repairs.
HM Revenue & Customs’ rent-a-room scheme can also earn downletters tax-free cash of up to £4,250 a year.
Householders can take in a lodger and pick up £81 a week rent without paying any tax or even submitting a tax return.
The scheme is open to owners and tenants – providing the tenants have permission to sublet.
Meanwhile, figures from the Council of Mortgage Lenders show homeowners are releasing less equity from their properties than at any time over the past 20 years.
The findings reveal owners have paid back £93 billion in mortgage debt since 2007. They put the rise down to falling prices reducing equity.
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