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.

Zero stamp duty for property valued up to £500K during COVID-19 pandemic

The UK government announced zero stamp duty for property valued up to £500K during COVID-19 pandemic on Wednesday, 8 July 2020. This is a temporary stamp duty holiday that will run from now until 31 March 2021.

This Zero stamp duty for property valued up to £500K during COVID-19 pandemic will undoubtedly boost the UK property market and encourage people to buy properties in the UK now.

Property or lease premium or transfer valueSDLT rateCOVID-19 period
SDLT rate
Up to £125,000Zero
Up to £500,000Zero
The next £125,000 (the portion from £125,001 to £250,000)2%
The next £675,000 (the portion from £250,001 to £925,000)5%
The next £425,000 (the portion from £500,001 to £925,000)5%
The next £575,000 (the portion from £925,001 to £1.5 million)10%10%
The remaining amount (the portion above £1.5 million)12%12%
Source: GOV.UK

Stamp duty saving if you buy property valued up to £500K now

Let compares the saving, If you buy a house for £570,000 and you are not a first time buyer.

NORMAL SDLTCOVID-19 SDLT
0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the final £320,000 = £16,000
Total SDLT = £18,500
0% on the first £500,000 = £0
5% on the next £70,000 = £3,500
Total SDLT = £3,500

You will save a massive £15,000 on stamp duty land tax (SDLT).

Companies House filings during COVID-19 pandemic

Companies House also step up to support UK businesses during COVID-19 pandemic. They will automatically extend your company’s filing deadline. This would help your business if it is severely affected by the COVID-19 outbreak and help you to avoid a late filing penalty. You do not need to do anything. You just need to go to Companies House website to check your new filing deadline.

On the same note, your confirmation statement filing deadline will also be extended. You would have 6 weeks to file your confirmation statement. Likewise, for the events driven filings, you will have 42 days (6 weeks) to notify Companies House instead of the usual 14 days filing deadline.

In addition, Companies House also created an interim paperless filing service to accept documents which would normally require a live signature.

During this pandemic, you are encouraged to submit your documents online to Companies House. You can use the webfiling service to file the following documents to Companies House.

To file online, you would require your company’s authentication code. The authentication code is the electronic equivalent of your company’s director(s) signatures. Keep safe your authentication code.

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

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