Business Personal Finance

Friday 20 October 2017

'I live with my landlord and pay rent in cash. But I need payment record for applying for mortgage - what can I do?'

Stock photo
Stock photo
Sinead Ryan

Sinead Ryan

Personal Finance expert Sinead Ryan answers your property questions.

Q. I live with my landlord in his house. From the beginning he said there was no need for a rent book or contract and I was okay with this. I pay him in cash  (I suspect he's not returning it for tax) and he's good about repairs and such like. However, I'm now saving for a deposit  to buy my own house and have been advised to keep records of rent paid. He has refused to do this and wants the existing arrangement to continue.  Can I insist?

Answer: If your landlord is renting you a room in his own house he comes under a different tax arrangement and legislation to an absentee landlord. Most likely he is availing of Revenue's 'Rent a Room' scheme which means he can earn up to €14,000 p.a. for letting to a long term tenant without paying tax on it.

Furthermore, he does not legally have to provide a rent book, or register with the Residential Tenancies Board. This arrangement has been working fine for you both, but now your circumstances are different.

You are quite correct that you should start to keep financial records if you are considering applying for a mortgage. Any lender you approach will look for this and 'cash' is not a great way to prove it. At the very least, you should be getting formal receipts when you hand over money, so ask for this.

Paying your rent by standing order should not impact on his tax situation in any way, so it is strange he is reluctant to do so. Remind him he has a good, compliant tenant and it might be disruptive for him to have to find another.

Try to make your house more energy efficient
Try to make your house more energy efficient

Q. I'm concerned with the rising cost of my heating and electricity. I got a call last week telling me the monthly pay plan I'm on is being increased because I'm over-using gas. This is hard for me to believe since there's only me and my son in the house. Is there a way of monitoring my usage properly? I wouldn't know where the meter is or how to read it. I'm paying €72 a month on electricity and €83 on gas for a three-bedroomed terrace - is this too much?

Answer: I have found myself in precisely this situation in the past, so I understand your concern. Gas and electricity bills are difficult enough to understand, and couched in obscure terminology. Any control exerted over them is a good thing and yes, there is plenty you can do. The first is to get the meter read. It's entirely possible you are being charged based on 'estimated' readings since it is rarely looked at. Ask the supplier(s) to tell you how to do this and confirm your bills are correct. What you're paying seems high, but not outrageously so.

Secondly, you can fit monitors which are App controlled for heating/water usage. Bord Gais' is called 'Hive', and Electric Ireland has 'Climote' and 'Nest'. They cost around €99 - €300, but you may consider it money well spent. EI will offer you a free device, if you sign up to a longer contract.

You might also want to consider Pay As You Go options: this would avoid a monthly bill for electricity based on a fitted meter. Pinergy and Prepay Power offer them, but you will pay for the rental of the device on top of the electricity cost. Again, they come with apps to show you how much energy you're using daily.

Finally if you live in Dublin, city libraries are lending out energy toolkits from 7 March. They include an energy monitor, radiator key and thermal leak detector, free of charge.

The Ryan Review

The whole property supply thing seems to be taking a turn for the worse.

Although it is one of the great challenges facing the market place, latest figures show that the number of transactions have actually fallen over the last year by 3.5pc.

An analysis of the Property Price Register (which itself is not exactly the bible, it has to be said), by MyHome.ie found that just 47,174 properties changed hands in 2016.

Dublin, not surprisingly, had the lion's share with a third of them, but it's all still small fry. In a properly functioning market of our size, around 4 to 5pc of houses should be on the market over a year. For Ireland, that amounts to 80,000 - 90,000. At the moment, just shy of 19,000 are actually for sale. The conclusion can only be that (a) sellers are waiting for a better time to move, perhaps believing, rightly or wrongly that prices will go up, (b) buyers can't get credit, or can't find the right type of property, (c) that investor led cash sales are putting people off or (d) an amalgam of all three, which is the most likely.

There may be more cranes in the sky, but when you look at their locations, they tend to be commercial rather than residential developments. There are good steps being taken to get more houses built, and certainly it's expected that the hefty state aids being given to first time buyers may stimulate the lower end of the market, and we know banks are happy to lend to capacity, but there's no doubt we're still a long way off 'normal'.

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