scope of EICR inside/outside flat

[Murdoch]

I doubt many landlords are making that kind of money every year on a property and if they are you have to factor in their time and effort and the capital invested. These days with all of the changes many landlords are making small gains, some are making a loss especially as the gov now taxes on turnover not profit! It only takes one bad tenant doing lots of damage or staying for months without paying rent to wipe out years of gains.

Hum ......... any business needs a financial plan - which should include ALL costs and an assumption that revenue isn't 12 months per year. Not anticipating costs and assuming 12 months of rent AND having low margins is a recipe for financial loss IMHO

 

[Sharpend]

I’d like to know how it is that you are taxed on turnover? 

 

[Murdoch]

I’d like to know how it is that you are taxed on turnover? 

The turnover for the landlord is the rental income ....

 

[Sharpend]

The turnover for the landlord is the rental income ....

I gathered that, but how come expenses are not permitted is what I meant?

 

[Murdoch]

I gathered that, but how come expenses are not permitted is what I meant?

They are

https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

 

[Sharpend]

They are

https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

That’s how I thought it would work but OP said it’s on turnover? So landlords can make a comfortable profit then. I know one that lives solely on renting our property and he’s a damn good landlord at that. So there’s got to be good money it. 

 

[Murdoch]

I think the problems started when George Osbourne removed interest on mortgages from allowable expenses

around here £800 per month rents a studio flat..... it can’t be too tricky to make a decent profit on that, but a lot did their sums assuming interest was an allowable expense

ive got a customer with a 2 bed flat rented out .... the rental and his own home are both on interest only mortgages, and the rental from the flat is their only income 

 

[Sharpend]

Blimey didn’t think they still offered interest only mortgages. That’s a dangerous game isn’t it, especially in current climate with the stock market not moving much since it crashed at start of pandemic? 

 

[Murdoch]

Blimey didn’t think they still offered interest only mortgages. That’s a dangerous game isn’t it, especially in current climate with the stock market not moving much since it crashed at start of pandemic? 

they do for landlords but nobody else .... been like this for a few years

then there are a huge number of mortgage holders with interest only mortgages and no way to pay off the loan, other than selling the mortgaged home ......

 

[Sharpend]

Ah yes of course a mortgage on a rental, the rental can be sold to pay off. 

 

[Murdoch]

Ah yes of course a mortgage on a rental, the rental can be sold to pay off. 

but I think by allowing this to happen, BTL landlords have been driving up the prices of housing .,.... making them less affordable for even more people

 

[Sharpend]

but I think by allowing this to happen, BTL landlords have been driving up the prices of housing .,.... making them less affordable for even more people

well let’s face it they ain’t worth anything anyway it’s all over inflated. 

 

[ElectricSpecs]

Yes as you rightly say Murdoch its the lack of mortgage interest relief, which is a major factor given that this is the sinlge biggest cost for most lanlords. So yes in truth it is really taxed on a hybrid of profit/turnover but is much closer to the latter for most. Regards landlords driving up prices well yes to an extent but only because there is a demand for rental properties. The main culprit is sucessive governements for bot building enough housing......

Anyhow politics aside what is the best / firmest way to ask my electrician to carry out the works and give me an EICR pass without doing the surge protection in the sub main?

Is there some clear guidance/legislation which says that EICR is limited to the installation within the flat itself and not common parts?

 

[binky]

I looked into BTL a few years ago, before the mortgage changes. WE worked out it would take about 5 years to recover the initial investment of making a pace tidy, solictors fees etc etc, and during that time you could have a lettuced tennant that ruins all your numbers. LOts of landlords re-mortgaged property to buy more property, and most are hoping house prices continue to rise. You can make the numbers stack up, but like all investments, it's not guranteed or as lucrative as people think. 

 

[Murdoch]

Anyhow politics aside what is the best / firmest way to ask my electrician to carry out the works and give me an EICR pass without doing the surge protection in the sub main?

I would ask said spark which reg no he thinks the flat isn't complying with ......

Then we can discuss

 

[ElectricSpecs]

OK So i have gotten an email from the electrician today which I asked for a while ago- giving a breakdown of the work required.

He has listed the faults as follows which correspond to the niceic form below.

4 4.16No RCD protection for socket outlets used for internal use. As the main cable to the flat, this is made of twin and earth cabling which is required to be RCD protected C2 Consumer unit

5 4.17No RCD protection for socket outlets used for internal use. As the main cable to the flat, this is made of twin and earth cabling which is required to be RCD protected C2 – Same as above



his email also says:

100mA RCD Unit

As the existing submain cable is wired in twin and earth, this type of cable is required to be protected by an RCD. A new 100mA RCD unit in a new enclosure will need to be installed in the mains cupboard. This will provide the correct protection on the supply cable to the flat

He seems to have bundled both inside and outside into that one section which is under the heading of CU/DB which seems eroneous to me. As suggested I will go back and ask him which reg no this is needed to comply with.

 

[ElectricSpecs]

I looked into BTL a few years ago, before the mortgage changes. WE worked out it would take about 5 years to recover the initial investment of making a pace tidy, solictors fees etc etc, and during that time you could have a lettuced tennant that ruins all your numbers. LOts of landlords re-mortgaged property to buy more property, and most are hoping house prices continue to rise. You can make the numbers stack up, but like all investments, it's not guranteed or as lucrative as people think. 

Yes I think it's a common misconception. There are more and less profitable properties and areas of course but I think most people know someone who did well out of it when it was much much more lucrative. Back in the day with less rules/taxation, easier mortaging and rising prices you could keep on remortgaging against higher valuations and pull out equity to keep expanding your portfolio at a fair old rate. It was a gravy train for some while it lasted.

 

[binky]

100mA RCD Unit

As the existing submain cable is wired in twin and earth, this type of cable is required to be protected by an RCD.

Utter garbage, sub mains are not required to be RCd protected FT&E or not. The only possible justification for RCding a submain is if it is plastered into a wall at less than 50mm deep, but how would he prove that, and even then I believe I am correct in saying it's still utter garbage.

 

[Murdoch]

On a slight tangent, who is educating private landlords who don’t use agents that they need EICRs done?

had a tricky conversation today with a private landlord who thought I was talking out of my rear and telling them they needed unnecessary work done ... I told them to google it and ended the call 

 

[ElectricSpecs]

On a slight tangent, who is educating private landlords who don’t use agents that they need EICRs done?

had a tricky conversation today with a private landlord who thought I was talking out of my rear and telling them they needed unnecessary work done ... I told them to google it and ended the call 

It's entirely up to the landlord to stay abreast of the latest legislation. That's true whether or not they use an agent although a decent agent should notify and explain.

The advice if you are a private landlord is to sign up with a body such as the RLA who will then email you bullitins about such things. It's not strictly necessary, really just investing some time, reading any relevant news and getting on a couple of free mailing list is enough IMO.

Of course some landlords aren't interested in investing the effort and it's really between them, the law and their tenants. Sounds like you have come across one of these. Not much you can do...they may come crawling back.