How to calculate rent in London?

How to calculate rent in London? London residential properties advertised for rent in Rightmove, the asking rent is usually per calendar month and/or per week. For example, a one-bedroom apartment in London Mayfair is £550 per week. This article focuses on how to calculate rent in London for residential properties only. This is an essential “know-how” for new properties owners.

Calculate rent per month

You take £550 per week x 52 weeks then divide by 12 months. The rent per month is £2383.33

Calculate weekly rent

Say, a two bedrooms apartment in London Regent Street is advertised as £3000 per calendar month. To calculate the rent per week from the monthly rent of £3000, you take £3000 x 12 months then divide by 52 weeks. The rent per week is £692.31.

New to London property letting business

If you are thinking of starting a London property letting business or new to this business, knowing how to work out your rent is essential so that you can work out your profit on your letting.

For example, to make a profit on your London apartment, you must achieve a minimum rent of £3500 per month.

You work out your rent per week that is £3500 x 12 months divided by 52 weeks gives you £807.69 per week. To achieve your minimum rent, you may ask your estate agent to advertise your London apartment for £810 per week rent or more.

Using a limited company for your properties letting business

If you are using a limited company for your properties lettings, you must also comply with the Companies House requirements. You must deliver the following documents to Companies House every year.

You can submit your company documents online. You would require your company’s authentication code to do so. The authentication code is the electronic equivalent of your company’s director(s) signatures. Hence, you must keep it safe.

In addition, you must also submit your corporation tax return to HM Revenue and Customs together with your company accounts.

If you require help with your company’s filings, contact our accountants. They will be more than happy to assist you.

Tenant Fees Act Landlord must know

Tenant Fees Act landlord must know. The law is to protect tenants from paying excessive fees associated with renting a property in England. The Tenant Fees Act comes into effect from 1 June 2019.

Prohibited tenant fees from 1 June 2019

Private landlords and letting agents are banned to ask tenants to pay the following fees for tenancy contract entered into AFTER or on 1 June 2019.

  • Referencing
  • Administration
  • Inventory check-in and check-out report fee
  • Renewal of tenancy fees

Grace period

Except where tenants entered into a contract with you BEFORE 1 June 2019. In this circumstance, you can ask your tenants to pay for renewal and check out fees up to 31 May 2020.

However, if your tenant signed a tenancy renewal contract with you, say 13 October 2019 to 12 October 2020 then you cannot charge your tenant a renewal fee because the contract was signed after 1 June 2019 not before 1 June 2019.

Some letting agents were charging tenants renewal fees after the grace period claiming that they could do so up to 31 May 2020. This is unlawful. Your tenant can make a complaint to the enforcement authority.

From 1 June 2020, landlords and letting agents are banned to charge referencing, administration, inventory check-in, inventory check out report fee including tenancy renewal fee.

Permitted tenancy fees from 1 June 2019

If you are running a property letting business in England, you can ask your new tenants to pay the following.

  • The agreed rent.
  • a refundable 5 weeks tenancy deposit where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above.
  • Ask your potential tenant to pay one week refundable holding deposit to reserve your property. No more than 1 week.
  • Tenant to pay the associated early termination of the tenancy fee, when requested by the tenant
  • You can charge your tenant for the variation, assignment or novation of a tenancy. The payment is capped at £50 or reasonably incurred costs, if higher.
  • payments in respect of utilities, communication services, TV licence and Council Tax of the rented property.
  • a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement.

Further reading about the Tenant Fees Act, click here.

Companies House filings

If you are running your property letting business through a limited company registered with Companies House, you must comply with the Companies Act too.

You can submit your company documents to Companies House online. You would require your company’s authentication code to do so. The authentication code is the electronic equivalent of your company’s director(s) signatures. Hence, you must keep it safe.

The documents you can file online includes:

Companies House has also created an interim paperless filing service to accept documents which would normally require a live signature during COVID-19 pandemic. You can easily upload your documents to the Companies House website.

If you require help with your company’s filings, contact our accountants. They will be more than happy to assist you.

Isolation note from NHS 111 online

UK employers will be able to verify their employees’ isolation note on the NHS website soon.

Your employee who seeks medical advice from NHS during the coronavirus outbreak can get an isolation note online.

The note will have the following details about your employees:

  • the 16 digits reference numbers.
  • your employee’s name
  • Your employee’s date of birth
  • Start date and the end date of isolation

The isolation note is issued by the NHS and it is an official confirmation of an employee absent from work either they have to self isolate because they have symptoms or their family members have symptoms of coronavirus. They must self isolate immediately to prevent the spread of the virus.

Additionally, your employee may use the note as proof that they are unwell and following the government guidance to self-isolate. Companies who paid statutory sick pay to employees who self isolate would entitle to a refund from the government.

Besides, companies are given an additional three month to file their company accounts with Companies House with no late filing penalty. However, you must apply to extend your filing deadline with Companies House. You can do it online and it only takes 15 minutes.

Universally, you may use the Companies House web filing service to submit your company accounts and confirmation statement online. For this purpose, you would require your company’s authentication code to file online.

If you have any questions about your company filings, contact us.

More businesses to close to combat coronavirus

More businesses to close to combat the coronavirus outbreak in the UK. For this purpose, the government asked businesses providing entertainment and hospitality services to closed temporarily.

This government’s announcement is aimed to implement further measures on social distancing to prevent the spread of the coronavirus. In other words, to discourage people to gather at public places for socialising. To stay at home instead. You can always use facetime or video calls if you miss your family or friends and want to see their faces while they talk to you.

This announcement applies to England, Wales, Scotland and Northern Ireland. Basically, across the UK.

Businesses to close from 20 March 2020

The following businesses must close from the end of the trading hours of 20 March 2020. The government will review this measure monthly.

  • Restaurants
  • Cafes
  • Pubs
  • Nightclubs
  • Cinemas
  • Theatres
  • Concert halls
  • Bingo halls
  • Museums and galleries
  • Spas and massage parlours
  • Casinos and betting shops
  • Gyms
  • Leisure and sports facilities

Further businesses are added to the closures list from 23 March 2020.

Takeaways

However, restaurants and pubs are allowed to operate as hot food takeaways during the coronavirus outbreak. For example, you are no longer able to eat in in McDonald’s but you can order takeaways.

Businesses remain open

Supermarkets, gas stations that supply fuel, pharmacies and other essential goods shops will stay open to the public. So it is still possible to go out to your groceries at your local shops or online.

Companies House provides web filing services. Businesses registered with Companies House are able to submit their confirmation statement and company accounts online using the web filing platform.

If you have any questions about filing your company’s documents, email our accountant at info@conciseaccountancy.com.

Help for UK property renting businesses

The government in particular from the Ministry of Housing, Communities and Local Government announced help for UK property renting businesses affected by the Coronavirus COVID19 outbreak.

The government brought in emergency legislation to protect both the UK landlords and also the tenants. This law applies to both the social and private sector properties.

3 months mortgage holiday payment for UK property renting businesses

The government foresee many people who are tenants may not be able to pay their rent during this coronavirus outbreak. For the reasons, they have to self isolate or have existing health conditions must stay at home. Furthermore, all schools in the UK will be closed until further notice starting from 23 March 2020.

In view of this situation, the government introduced the three month holiday payment for buy to let mortgages. Consequently, landlords would not be concerned about meeting the mortgage payment if their tenants were unable to pay their rents because they were unable to work.

Thereafter, tenants and landlords must work together to resolve rent payments.

Court would not accept new tenants eviction proceedings

This emergency legislation also extends to no new tenants eviction proceeding can be initiated by landlords. Hence, landlords with no buy to let mortgages may be affected.

In short, this legislation is to protect tenants from being homeless during this coronavirus outbreak.

You may read more about how the UK government would help UK property renting businesses and tenants here.

UK property renting companies legal filings

Landlords using a limited company for their UK property renting business can do their legal filings online. Companies House provides web filing service facility. You may submit your company accounts and confirmation statement using this online platform. It is fast and easy to use. You would require your company’s authentication code to file online. You may contact Companies House if you have any questions or contact us if you require help with your company filings.

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