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Em Morley

Winter-Proofing Your Rental Property

Published On: January 13, 2015 at 4:30 pm

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As bad weather looks set to hit, it is important for landlords to visit their rental properties and assess any work that needs to be done to protect the home from the elements.

Maintenance issues in the wintertime can create heavy bills and significant damage. Here is some advice on how to tackle common problems:

Looking outside

It is crucial to visit the house in the daylight, to fully inspect how the property is holding up. Before heading into the home, take a look at the outside, particularly the roof. Ensure that all of the tiles are fit correctly and securely.

Letting agent Belvoir’s Adam Rastall, owner of the Liverpool, West Derby office, says: “You should check the roof for loose tiles that could come down on a windy evening. It is essential that these are firmly secured in order to prevent rainwater leaking into the roof space. Heavy rainfall can damage a property at speed if your property’s roof space is left unprotected.”

Next, identify any issues with the guttering, downpipes, and storm drains. Belvoir Melton Mowbray’s Charlotte Baker, advises: “Make sure your guttering is correctly aligned and securely connected to the downpipe.”

Owner of Belvoir Cheadle, Darragh Lee, adds: “Also check that it is not cracked or leaking. Ensure that the guttering is free flowing and clear of moss and fallen leaves too; a clogged gutter can cause rainwater to overflow and pour down the fabric of the building.

“Storm drains should also be free of clutter, leaves, and debris so that rain water can pass into them with ease. Blocked drains can overflow and cause flooding.

“Also, look at your condensate pipes which come out of the boiler and usually run down the outside of your property. Make sure they are lagged and insulated. As soon as the temperature drops below freezing, these pipes could freeze if not sufficiently insulated and this will automatically cut off a boiler and give an error message.”

If the garden has fence panels or trellising, the condition of these needs to be checked also.

Winter-Proofing Your Rental Property

Winter-Proofing Your Rental Property

Lee explains: “Heavy wind and rain can cause extensive damage to garden fence panels and trellising, especially if they are already deteriorating.

“Check for wear and tear and firmly secure or replace if required. Be aware, however, that even the securest of fences which are well maintained and in good condition can still be affected by very high winds.”

It is also wise to fit an isolator onto the stopcock for the outside tap, so that the tenant can switch it off if necessary.

Inside Assessments

Upon entering the property, take note of whether the house is warm or cold, and if it smells of damp. If possible, it can be important to meet the tenant at the house so that you can discuss any problems, and advise them on signs to look for in winter.

Baker says: “Talking to tenants when doing an inspection can help identify problems. If, for example, the central heating system is playing up, this gives you the opportunity to have it repaired before it breaks down and incurs emergency call out costs.”

Lee states: “It’s important to time your boiler service each year so it’s done in the months leading up to winter, as all sorts of problems occur with boilers when they have to start to work hard again during the winter months.”

Moving around the home, look for condensation. This can cause major issues during winter, so signs to look for include clouded windows and damp walls.

“You should check for condensation around your windows and on the inside of external walls where it’s more likely to be seen,” says Rastall. “Condensation is a massive problem in winter due to the property being heated up; when the warm air meets cooler air, or a cooler surface, it has to release some of its moisture as a result. Poor ventilation can make the problem worse.”

The extractor fan in the bathroom should be checked to ensure it is working correctly, to prevent built up moisture.

Rastall continues: “Bathroom extractor fans should be fully functioning and not clogged with debris. Allowing steam from the shower or a hot bath to exit out of the bathroom window is also advisable. If the condensation problem in the property is severe ask a local builder or damp professional what they would advise.”1

Always check the walls and ceiling of every room to look for brown stains or peeling paint.

Lee says: “Brown staining on walls or ceilings can be an indication of a leak. Determine what’s causing the leak and repair or fix accordingly. Brown staining on a bedroom ceiling is usually a sign that a roof tile has fallen off or come loose. Paintwork which is peeling or bubbling can also indicate a leak or other damp issues.”

Look inside the loft hatch to check that the pipes are lagged sufficiently, and look for daylight creeping in through the roof tiles.

Baker notes: “Ensure the property is fully insulated. In particular, watch out for pipes being above the insulation in the loft as these can be exposed to cold temperatures even if the heating is on.”1

Lee adds: “While in the loft space, assess the alignment of the roof tiles. If you can see daylight, some of your tiles may need to be repaired or replaced.”

Solutions

It is important to stay proactive; once an issue is identified, organise any maintenance work as quickly as possible.

“Acting and reacting quickly to maintenance issues as winter approaches is essential,” Lee says. “Even small problems are likely to grow as the temperature falls, and, as a maintenance issue escalates, so does the price to fix it!”1

Checklist

  • Visit the rental property and inspect any necessary work.
  • Clear the gutters – clogged guttering can cause water to flow down the fabric of the building.
  • Check the fence panels for looseness.
  • Make sure the central heating is working, and have the boiler serviced.
  • Secure any loose roof tiles, or replace them if needed.
  • Unclog storm drains.
  • Explain signs to look for to your tenants.
  • Ask tenants to report any maintenance problems.
  • Limit condensation by ensuring good ventilation.
  • Insulate pipes, including condensate pipes – this will prevent them from freezing.
  • Resolve issues as quickly as possible to avoid bigger problems.

1 http://www.belvoir.co.uk/winters-on-its-way-brrrr-wind-rain-sleet-and-snow-winter-proof-your-rental-property-now-say-the-experts-at-belvoir-p6877

 

 

Tips for Saving Money on Energy

Published On: January 13, 2015 at 3:47 pm

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Three quarters of tenants who pay their own bills have never changed electricity or gas supplier to get a better deal, says Ofgem, the energy regulator.

Tips for Saving Money on Energy

Tips for Saving Money on Energy

One in five renters are not even aware that they can switch provider, even though they could save up to £200. Tenants are just half as likely to change compared to homeowners.1

Landlords should encourage tenants to look around for the best deals, and always remind potential tenants to consider the whole cost of renting, including the bills.

Recently, the Be an Energy Shopper campaign emphasised tenants’ rights to change their energy supplier if they hold responsibility for paying the bills. Information can be found at: www.goenergyshopping.co.uk/en-gb/tenants

Some tenancy agreements state that tenants must inform their landlord before switching supplier, however, if they are directly responsible for paying such bills, then they have the right to change. Even if there is a clause in the contract saying that tenants cannot switch, if they pay energy bills, they should be free to decide who they use.

Good communication between landlord and tenant will ensure that the landlord is aware of any changes that the tenant makes regarding energy supplier. The landlord can also request that the provider be changed back at the end of the tenancy.

Some landlords provide their properties with bills included. In this case, tenants cannot switch provider, as it is the landlord who has the contract with the energy company.

If the landlord holds the account, they too can shop around for a better deal.

Some useful tips on saving money:

  • Ask the tenant to take meter readings upon moving in and out of the property, to be sent to the energy provider.
  • Identify any supplier tie-ins at the start of the agreement to the tenant.
  • Tell the tenants if they must inform you when changing energy suppliers.
  • Remember that if the tenant pays the bills, they are entitled to change provider.

1 https://nlauk.wordpress.com/2015/01/13/top-tips-for-energy-budget-conscious-landlords-and-renters/

 

 

Private Sector Rents Drop in Line with Inflation

Published On: January 13, 2015 at 2:44 pm

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Private Sector Rents Drop in Line with Inflation

Private Sector Rents Drop in Line with Inflation

Recently, there has been an increase in calls for rent controls in the private rental sector (PRS).

However, the Residential Landlords Association (RLA) have analysed the Government’s English Housing Survey, and found that in real terms, private sector rents are dropping.

Average private sector rents rose by £10, from £153 to £163 per week, an increase of 6.5%.1

At the same time, average social sector rents increased by £18, from £71 to £89 a week, a rise of 25.4%.1

During this period, the Retail Prices Index (RPI) was measured at 16.2%, and the Consumer Prices Index (CPI) was 16.7%.1

Between 2011-12 and 2012-13, average weekly rents in the private sector dropped by 0.6%, from £164 to £163.1

In the same timeframe, social sector rents saw a rise of 7.2%, from £83 to £89 per week.1

The Labour Government in February 2010 published a consultation on Investment in Private Rented Housing. It highlighted the risks of rent controls: “A key factor behind the decline in the PRS was the introduction of rent controls during the First World War, and these became more extensive over time. Artificially low rents reduced investment in the sector, contributing to lower maintenance standards in the stock that remained.”1

1 http://www.landlordtoday.co.uk/news_features/Private-sector-rents-fall-in-real-terms

 

Why the UK Can’t Build Enough Homes

The Labour government in 2007 set a target of 240,000 homes to be built annually by 2016. The country has not managed numbers even close to this.

After the Second World War, the UK built over 300,000 new homes every year. In recent times, the country has only achieved half of this. There are many factors that have caused this crisis.

Ten years ago, the Barker Review of Housing Supply revealed that around 250,000 homes need to be built a year to stop house prices getting out of hand, and to prevent a shortage of affordable housing.

This aim has been continuously missed. The closest the country got to reaching the goal was in 2006-7, when 219,000 homes were built. However, 2012-13 saw a post-war low of 135,500. This was mainly down to the financial crisis. Last year, this figure rose slightly to 141,000 homes. The coalition government has since dropped Labour’s target.

The Governor of the Bank of England (BoE), Mark Carney, said in May 2014 that house-building in the UK was half that of his home, Canada, even though the UK has a population double the size. The consequences have been sky-high prices in London, the South East and other parts of the country.

Planning permission

A recent survey of house-builders found that around 95% believe the “modest” industry target to build 200,000 new houses a year by 2016 is unachievable.1

Two of the main reasons for this were noted as the planning system and local opposition to building. The Home Builders Federation (HBF) comments that, although things have improved, the planning system is “still far too slow, bureaucratic and expensive.”1

However, the Government have revealed recently that in the year to September 2014, there were 240,000 planning permissions for new homes. Housing minister Brandon Lewis believes this is a sign of the Government’s planning reforms working.

In 2012, the Government tried to simplify the planning system by launching a new National Planning Policy Framework (NPPF). Property Economist at Capital Economics, Matthew Pointon, says this is working: “In the past, planning was a big part of why we didn’t hit our targets.”

Nevertheless, the HBF says it can still be difficult to go from outline to detailed planning. Apparently, there are more than 150,000 plots for new houses with outline planning permission that are waiting in the system for detailed permission.

The Government argue that the planning system is quickening, as there has been a steady increase in detailed planning permissions being granted in the last four years: from 158,000 in 2011, 189,000 in 2012, 204,000 in 2013, and 240,000 in 2014.1

Head of Housing and Planning at think tank Policy Exchange, Chris Walker, says this is a positive step. However, these figures could simply be levelling after the low levels of building during the financial crisis. Walker says: “We probably won’t get to 200,000 on the back of that 240,000.”1

The Government has eliminated national and regional planning house-building targets. However, Chief Executive of the Town and Country Planning Association, Kate Henderson, says that leaving things to local decision-making encourages Nimbyism.

She adds: “There’s a lot of pressure from politicians in certain areas to suppress housing figures.”

Yet Brandon Lewis says that the growing number of permissions show that the tide is turning. He also discards the idea that replacing regional planning targets with local decision-making has caused Nimbyism. He highlights the British Social Attitudes survey, which showed a 19% increase in the amount of people supporting house-building in their area.1

Available land

Homelessness charity Shelter believes that a shortage of available building land is to blame for the housing shortage. A spokesperson says: “We fail to provide enough land at prices that make it possible to build decent, affordable homes.”

They also reveal that land prices have risen “massively”. Residential land prices grew 170% from 2000-07, compared to the 124% rise in house prices, says the Institute for Public Policy Research (IPPR).1

The private sector HBF and the National Housing Federation (NHF) agree that the main long-term restriction is land. The NHF thinks that local plans drawn up by councils often do not identify enough land to meet local housing needs.1

A spokesperson for the Department for Communities and Local Government (DCLG) says: “We’re well on track to have released enough formerly used, surplus public sector land for 100,000 homes by the end of this parliament, and the Autumn Statement included plans to identify similar land for an additional 150,000 homes in the next five years.”1

Jeremy Blackburn, Head of Policy at the Royal Institution of Chartered Surveyors (RICS), believes that this will help. However, public sector land is just a small part of the problem. Private landholders also need to be stimulated to release sites for house-building.

A controversial area is the greenbelt. Blackburn thinks that it will help if rules around this are relaxed. He says that generally, the greenbelt can be built on and green space can be released in other areas.

Councils have always had the ability to build on the greenbelt in special circumstances. It was found in August 2014 that 15 homes are approved on the greenbelt daily. In October, Eric Pickles, communities secretary, said that the Government’s new planning rules on the greenbelt would be tightened. Many in the planning and construction industries would like to see the greenbelt released for building, but it is thought that politicians won’t agree on something as controversial.

House-builders

Pointon says that house-builders who possess large sites often develop them gradually instead of building and selling the homes quickly.

Why the UK Can't Build Enough Homes

Why the UK Can’t Build Enough Homes

This works to their advantage, as by releasing a few at a time, the price stays high. If they were all available at once, the value of the properties would drop.

Pointon explains: “By building them out more slowly, it means they can maximise the value of their assets.”

Henderson says that although this works for them, it means that the country is left with developers sitting on land for houses that could be on the market and relieve the shortage. She believes that the state should take charge of developing large sites, so that big house-builders do not control the housing stock.

The HBF says that these sites can take years to develop. Spokesperson Steve Turner says: “House-builders can only build at the rate a local market will support. You cannot build out a site for 5,000 houses instantly or indeed put them up for sale in a local market at once. So when local authorities are drawing up their local plans, it’s imperative they include more smaller sites and not just a few large ones which inevitably take years to build out.”1

The state

Between the late 1940s and late 1950s, councils built more houses than the private sector. Until the late 1970s, local authorities were building 100,000 per year. When Margaret Thatcher came to power in 1979, house-building by local authorities declined.

Private sector building grew, but did not compensate for the drop in public sector construction. Housing associations were meant to fill the void, but have not come close to the state’s building figures, says a supporter of pressure group Defend Council Housing, Glyn Robbins. He believes that councils’ departure from house-building is “fundamental” to the housing shortage today.1

Henderson agrees. She says that the current lack of building shows that the private sector cannot deliver by itself, unlike the 1950s and 1960s, when councils built as much as the total house-building amount today.

Labour and the Liberal Democrats are both arguing for the state to commission and build homes again. Today though, they want to see development corporations buying the land and working with partners to build homes for different tenures. Labour is calling its plan the New Homes Corporations. Henderson says: “Once you grant planning permission, the value shoots up. So the state can capture that and deliver affordable housing.” She believes that garden cities are perfect for this.1

Brandon Lewis says that the Government’s flagship garden city of Ebbsfleet will be developed primarily by the private sector. He remains cautious about the state’s involvement in house-building, saying that the country must “live within its means.” However, he does emphasise the Government’s additional investment for councils to aid them with building new affordable homes around the country.1

Housing associations

Since the state stopped building houses, non-profit housing associations have been handed the task of providing social housing

Housing associations built 21,600 homes in 2013. The Policy Exchange believes that this figure could rise drastically if regulation is relaxed around housing associations.

The NHF agrees that its members’ building hopes are prevented by pointless restrictions. There are rules about setting rents, how properties are let and how housing stock is valued for lending purposes. These all reduce the housing association’s ability to borrow money for this, says the NHF’s Head of Policy, Rachel Fisher.1

Then is the mater of money. The 2010 Spending Review lessened the DCLG’s annual housing spending, which supports social housing, by around 60% to £4.5 billion for four years starting 2011-12, compared to £8.4 billion in the previous three years.

This comes when approximately 1.7m people are on the social housing waiting register in England. A spokesperson for the DCLG says that the government has offered more than 200,000 affordable homes since 2010. They add that between 2015-20, it will provide 275,000 more homes, which will lead to the fastest rate of affordable house-building for two decades.1

Skills and materials

Pointon says that the short-term lack of building is due to an absence of materials and labour. The high demand in late 2013 and early 2014 saw materials such as bricks running out.

In the financial crisis, construction workers left the industry, and since, the industry has not caught up with rising demand. Pointon believes that it will take some time for there to be enough skilled workers in construction.1

The Government set out steps in trying to recruit new construction workers in November 2014. One of the plans is to bring ex-military personnel to building sites.

Small builders

Now, house-building is the responsibility of less firms. The financial crisis had a huge impact on builders. In 2007, 15 companies provided over 2,000 homes per year. In 2008, this number was just six.

Small house-builders construct less than 100 houses a year, and built only 20,000 homes in 2013, the Financial Times found. Ten years earlier, it was 51,000.1

Research in 2014 by the National House Building Council revealed that half of small builders claimed banks’ reluctance to lend is a serious problem.1

The Government says that it has enforced measures to help small builders. For instance, builders of ten or less homes do not have to pay section 206 affordable housing and tariff contributions. The Government has also offered a £525m Builders Finance Fund to pick up work on halted smaller sites.

1 http://www.bbc.co.uk/news/magazine-30776306

 

 

 

 

Launch of Estate Agent Comparison Website

Published On: January 12, 2015 at 4:19 pm

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A website has been launched aiming to compare the fees and services of at least six local estate agents, and arrange appraisals. Agentsavvy.co.uk is described as an “upfront estate agent comparison” site.1

How it works

Launch of Estate Agent Comparison Website

Launch of Estate Agent Comparison Website

If you are selling your home, you can go onto the website and complete an online form, including personal and property details. The vendor then agrees to the terms and conditions, and clarifies that they are not an estate agent.

Agentsavvy will then contact at least six estate agents in the area, specifying the name of the street and town, with details of the property. They do not give the vendor’s name, contact details, or exact address.

The seller will then receive an Estate Agent Comparison Report from Agentsavvy, which is free. This is prepared between three to five working days.

If the vendor would like more details, Agentsavvy will try to find additional information from one or more of the agents.

Making a sale

If the seller then selects an agent, Agentsavvy will conduct this, and then “will charge the agent you choose to sell your house a small fee once a sale is completed.”1 

The website claims to also help existing sellers compare their estate agent, however, they do advise: “Make sure that you observe and meet any commitments you have with your current estate agent.”1

Naturally, the service only includes estate agents who have agreed to pay Agentsavvy the fee upon sale.

The site says: “Finding the estate agent who can offer you the services you require at the best possible price currently takes too long and it’s too complicated; so people simply don’t bother and end up paying more than they could have or not received services they would have liked.”1

1 http://www.estateagenttoday.co.uk/1834-estate-agent-comparison-website-launched

Landlords Favour Short-Term Fixed Rates

Published On: January 12, 2015 at 3:18 pm

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Landlords are moving towards short-term fixed rate mortgages, in which costs stay low, and estimated increases in bank rate are put aside.

Landlords Favour Short-Term Fixed Rates

Landlords Favour Short-Term Fixed Rates

Specialist mortgage broker Mortgages for Business conducted a study, Property Investment Survey, which found that in the last quarter (Q4) of 2014, the number of investors choosing two-year fixed rates had doubled since the beginning of the year. The figure is now 23%, from 12% in Q1 2014.1

However, there was a drop in the amount of landlords preferring long-term fixed rates. In a notable difference, less are now fixing their mortgage repayments for three years than those picking a two-year deal. Only 15% favour three-year fixed rates, down from 21%.1

Those looking for five-year fixes have declined less drastically, from more than a third (34%) in Q1 2014, to 31%. Additionally, just 8% would go for a ten-year fixed rate, down from one in ten.1

Managing Director of Mortgages for Business, David Whittaker, says: “Tempted by cheap rates, landlords are deciding to take their chances with a shorter term deal.

“It’s true that these ultra-competitive mortgage rates will probably continue for some time, as the financial world increasingly predicts virtually zero inflation in the UK and Eurozone, plus a cooling rate of economic growth. That doesn’t mean there’s no room for caution.

“Even in such an exceptional situation, rates are still expected to rise in due time. However, landlords now seem willing to take the chance that won’t happen for at least a couple of years.

“However, we maintain our recommendation to fix for longer, particularly where the pricing difference between three and five year fixed rates is narrow.”1

1 http://www.landlordtoday.co.uk/news_features/Landlords-favour-short-term-fixes