Written By Em

Em

Em Morley

New Year Resolutions for Landlords

Published On: January 8, 2015 at 3:31 pm

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Categories: Landlord News

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Private landlords experienced many changes in 2014. The private rental sector was given more responsibility within the Immigration Act 2014, and there are still many people finding it difficult to get a mortgage. High deposits are still required, and the uncertainty of house prices is keeping the property industry into the spotlight.

As 2015 gets going, it is important for landlords to remain on top of changing legislation, and ensure good property conditions for tenants as the winter months continue. Landlords should be ensuring good practice this New Year, and these tips could work well as resolutions.

  1. Keep up to date

Always make sure you know when certain checks, tests, and renewals are due. Remember gas safety, PAT testing, and insurance. If these dates are missed, prosecution is a possibility. Ready Rentals offer a logging system on their website, where landlords can keep track of upcoming responsibilities.

  1. Insurance policy

    Private landlords experienced many changes in 2014.

    Private landlords experienced many changes in 2014.

If your insurance is not quite up for renewal, review your current policy and make sure that you are fully covered. If you are looking to renew, check that it covers as much as possible, from malicious damage to void periods. Check each policy thoroughly and read the small print.

  1. Property inspections

Checking your rental property can be vital to making sure it is in a good state of repair, and not getting any shocks later on. Checking meter readings, updating the inventory, and assessing wear and tear can keep things up to date. Look out for condensation, and ensure the tenants are aware of maintaining this problem. Make sure that the smoke alarms and CO2 detectors work.

  1. Keeping warm

Ensure that your rental property has suitable systems that will keep the house, and therefore tenants, warm in the wintertime. Keep the boiler serviced regularly, and have pipes and radiators checked. Emergency cover should be in place, in case anything were to happen to the property. Loft insulation should be within current standards, and any extra measures to reduce draughts could be beneficial.

  1. Legal changes

Keep tenancy documentation up to date, and keep in mind any new changes to the sector. Always stay on top of legal responsibilities and new legislation. Changes in legislation are common in the private rental sector, and it is crucial to practice within the law.

  1. Good photographs

Taking new and high quality photos will always benefit you when looking for tenants. The property’s features and appeal should be highlighted. The property should always look tidy and professional; this can include some simple cleaning, or maybe redecorating.

If using a letting agent, you should ensure they are using good photos of the home, and marketing on as many platforms as possible.

  1. Eco-friendly landlords

By April 2018, new regulation will be in place that means properties with energy ratings of F or G cannot be rented out. Making improvements to meet the minimum E rating could mean budgeting and planning now. Keeping in mind any changes to be made the property should be factored into the future.

At a sooner date, from 1st April 2016, private tenants can demand energy efficiency improvements for their rental properties. These cannot be unreasonably refused. So plan ahead, and keep the costs of these improvements in mind.

Tips to legally evict your tenant

Published On: January 7, 2015 at 2:39 pm

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There are many reasons why a landlord or letting agent may want to evict a tenant from their property. In some cases, landlords will choose not to extend a lease or will be taking back the property for personal use.

Sometimes, landlords or letting agents are left with no choice but to take eviction procedures against their tenants. A tenant may have caused malicious damage or may have large rent arrears. Whatever the reason for an eviction, there are five key things to know about to ensure that the process is both legal and effective.

  • Serve notice of eviction

Section 21 of the Housing Act of 1988 states that tenants must be given at least two month’s notice before they can be legally evicted.

A section 21 notice must be provided in writing by the landlord and must give the date of the required repossession. This date should not be any earlier than the permitted two months grace period, nor should be earlier than the original tenancy agreement.

If the rental term has already expired, the date specified on the letter should be the final day of the agreement.

  • Possession Order

If a tenant refuses to vacate the property after being served with a Section 21  notice, the landlord must go to their local court and appeal for a possession order. It must be noted that the court cannot grant a possession order in the first 6 months of a tenancy.

When seeking a possession order for a shorthold tenancy, the landlord must ensure that all of the necessary legal procedures (issuing a Section 21) have been followed. In addition, if there are serious rent arrears (8 weeks plus) at the time of a possession order request, landlords can issue a Section 8 notice to regain their property.

Tips to legally evict your tenant

Tips to legally evict your tenant

  • Accelerated possession procedure

Landlords wishing to gain quicker possession can follow an accelerated possession procedure. This procedure does not require a court hearing, but will require a fee before any action can potentially commence.

For accelerated possession, a landlord will need to find the County Court for the area where the property is situated, then fill in a Form N5B claim for possession. These are obtainable from HM Court services. The court will then post the papers to the tenant.

If successful, the landlord will be granted an order for possession and the tenant will be made to pay any court fees. The whole process normally takes between 6-10 weeks.

  • Professional notice service

In some instances, a tenant will either not be inside the property or will not answer the door to be served notice. In this instance, the landlord should ask for a witness and post the letter through the letterbox. The notice is then deemed to have been served on the following day.

On occasion, it will be inconvenient for a landlord to visit their property to give notice, as they may be worried about a confrontation with the tenant. In this instance, a professional process server should be used. Fees for this service are small and the landlord will be provided with a certificate that can be used in court.

  • Read the renting guide

The Department for Communities and Local Government has provided a How To Rent Guide, which all landlords are advised to read.

First Time Buyers at Seven-Year High

Published On: January 6, 2015 at 3:45 pm

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The amount of first time buyers stepping onto the property ladder rose by more than a fifth last year, rising to a seven-year high.

The Halifax First Time Buyer Review revealed that the number of buyers joining the UK housing market for the first time increased by 22%, to 326,500 in 2014, adding to the 23% rise the previous year.1

First Time Buyers at Seven-Year High

First Time Buyers at Seven-Year High

The average price of a home bought by a first time buyer also increased, by 9% to £171,870 compared to a year ago. However, the average deposit for first time buyers dropped by 7% over the same period, to £29,218.1

House prices rose in the first half of 2014, stimulated by initiatives such as the Government’s Help to Buy scheme. The second half of the year saw fears of another housing bubble cause the Bank of England (BoE) to enforce stricter lending limits on borrowers, in an attempt to calm the market.

Mortgages Director at the Halifax, Craig McKinlay, says: “First time buyers are vital for a properly functioning housing market.

“Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first time, contributing to the significant increase in the number of first time buyers in the past two years.”1

The report also revealed that Chancellor Osborne’s changes to Stamp Duty last month have cut the average first time buyer’s tax bill by £781.1

The average deposit dropped to 17% of the purchase price last year, down from 20% in 2013. This is still considerably higher than the 10% in 2007, when the average deposit was £17,499.1

The study also found that the most affordable local authority in the UK is Larne in Northern Ireland, where the average property price is £80,793, which is 2.8 times the local average gross annual earnings.1

The highest local authority is Camden in London, where the average first time buyer’s house price is £614,315; 11.4 times the gross average annual earnings of the area.1

The average age of a first time buyer was 30, up from 29 in 2011. The region with the oldest average first time buyer was London, at 32.1

Housing minister Brandon Lewis says: “It is good to see that our efforts to help aspiring homeowners are reaping results. Already, our Help to Buy schemes have supported more than 71,000 homebuyers, the vast majority of whom are first time buyers and we have kept interest rates low.

“We have also got Britain building again with house building at its highest level since 2007, and planning permissions have been granted for 240,000 new homes in the year to September.”1

1 http://www.theargus.co.uk/uk_national_news/11703182.print/

Private Tenants Should be Allowed to Rent for Life

Published On: January 2, 2015 at 9:55 am

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Private rental sector tenants should be able to stay in their homes for as long as they want to and rent rises should be linked to inflation, says think tank Civitas.

These new rights would allow tenants to stay in rental properties and rents staying in line with inflation would be guaranteed, Civitas argued.

It believes that a new regulatory scheme is necessary in the private rental sector to avoid landlords abusing the shortage of housing at tenants and taxpayers expense.

It is predicted that the private rental sector will make up over one third of the UK’s housing stock by 2032. Currently, two fifths (40%) of private tenants’ income is taken up by rent.1

Private Tenants Should be Allowed to Rent for Life

Private Tenants Should be Allowed to Rent for Life

Increasing costs in the market are transitioning into a higher housing benefit bill, revealed the Future of Private Renting report.

The amount of private tenants relying on housing benefit has more than doubled in the last ten years, from 772,000 in 2003-04, to 1.7m in 2013-14.1

This number is expected to hit 1.85m in 2018-19. According to the report, the amount of housing benefit rent subsidies claimed in the sector has more than doubled over the past decade, from £3.9 billion in 2003-04 to £9.5 billion in 2013-14. It is set to reach £10 billion in 2018-19.1

Although this is crucial for low-income households having to rent privately, these figures are creating a vicious cycle by supporting the rent inflation they are supposed to alleviate, the report states.

In places with many claimants, landlords have the opportunity to set rents at unnaturally high levels in line with the local housing allowance.

The report’s author, Daniel Bentley, says that it should be compulsory in the private sector to offer indefinite tenancies “as the norm”. Once a rent price has been settled, index-linked ceilings on increases would offer security to tenants.1

1http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11321360/Buy-to-let-tenants-should-be-able-to-rent-for-life.html

 

House Prices will Rise in 2015 with New Pension Rules

Published On: December 30, 2014 at 12:04 pm

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Experts are predicting that house prices will rise dramatically next year, with the introduction of new legislation that will allow people to invest their pension funds into the property market.

Rise

From April 2015, the legal requirement to purchase an annuity with pension funds will be scrapped. As a result, many people are expected to invest in or purchase properties that will be subsequently rented out to provide them with income during their later years.

Industry analysts suggest that home values will increase to around £190,000 during 2015, a rise of almost £12,000 to the price of an average property. Further estimations indicate that up to a staggering £5 billion could be invested into the market from people withdrawing their pension funds.[1]

Stuart Law, part of buy-to-let specialist organisation Assetz, thinks that property prices in the UK could rise by as much a 7%, following both changes in pension legislation and Stamp Duty cuts. Law said: “As property investment continues to outperform all other major asset classes we will see a surge in buy-to-let as people look to make the most of the cash in their pension pots.”

He continued by suggesting: “If half the estimated 200,000 people looking to cash in a percentage of their pension pots from April 2015 have £50,000 to invest in property, that is an astonishing potential £5 billion injection.”

Furthermore, Law thinks that “canny investors” will look to add to their portfolios in specific regions. He thinks that property investment in the north will be substantial, as they offer “cheaper prices and higher yields than in the South East.”

Investment in property, Law says, will not only boost income for peoples’ retirement, but will also “generate a decent and growing nest egg to pass to their offspring.”[1]

House Prices will Rise in 2015 with New Pension Rules

House Prices will Rise in 2015 with New Pension Rules

 

Considering

Research from insurer Direct Line for Business has indicated that around one third of people aged between 45-64 would consider using some or all of their retirement fund to invest in property.

John Goodall, CEO of mortgage lender Landbay, said that: “The long-term impact of annuity reforms will have a profound impact which isn’t yet factored into most models and predictions for house prices.”[1]

Mortgage expert Dominik Lipnicki stated: “Without doubt, these pension changes will see more people entering the buy-to-let market.”

He also stated that “the game has changed.”[1]

Mark Harris, Chief Executive of mortgage broker SPF Private Clients, agreed, saying: “Strong rental yields mean owners can enjoy a healthy income with the added bonus of generous tax breaks, such as the ability to offset mortgage interest, maintenance and management costs against the rent.”[1]

Richard Lambert of the National Landlords Association (NLA), stated that the pension changes would work to make housing “a more financially viable option for providing an income in retirement.” This in turn, Lambert said, would make homes more readily available for “future generations.”[1]

[1] http://www.express.co.uk/news/uk/549326/House-prices-rise-people-invest-pension-pots-in-property

 

 

 

House Prices Increased by About 8.5% in 2014

Published On: December 28, 2014 at 4:22 pm

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Mortgage provider Halifax says that house prices in the UK increased by an average of 8.5%, or £16,000, in 2014.

Halifax compiled its data from its own lending, and found that property prices in Greenwich, southeast London rose by around 25%.

House Prices Increased by About 8.5% in 2014

House Prices Increased by About 8.5% in 2014

Officials have concerns over another housing bubble developing.

The Government believes that the Bank of England (BoE) has the tools it needs to avoid this issue.

Halifax also announced that the average price of a UK home is now £209,428, however, other lenders and official sources say differently.

Nine of the ten areas with the highest growths are in London, according to the Halifax.

The only area in the top ten that is not within London is Crawley, West Sussex.

Out of southern England, properties in Sheffield saw the biggest surges, with a 13.7% increase.

Mortgage Director at Halifax, Craig McKinlay, says: “Continuing improvements in the economy, rising employment, and low mortgage rates will no doubt have supported housing demand and, combined with a shortage of homes coming on to the market, will have contributed to rising property values.

At the opposite end of the scale, towns and cities in the north of England, the West Midlands, Wales, and Scotland have seen drops.

House prices in Bury, Greater Manchester, declined by 4.8%.

Area Annual rise1
Top
Greenwich 24.6%
Ealing 24.5%
Crawley 22.4%
Tower Hamlets 22%
Kingston upon Thames 21.4%
Bottom
Bury -4.8%
Keighley -4.4%
Nuneaton -3.2%
Newport, Gwent -2.9%
Stoke on Trent -2.6%

 

McKinlay continues: “Several of the towns experiencing price falls in the past year are still suffering from relatively weak employment conditions, which may have had an adverse impact on their local housing markets.”1

Recently, Business Secretary Vince Cable described property prices as “getting out of control.”1

BoE governor Mark Carney also stressed to MPs in September that “we do need to be vigilant”1 on house prices.

Chancellor George Osborne has also noted that the BoE does have the power to prevent a boom and bust in the property sector.

Recent figures imply that rises in house prices have been slowing down in the last few months.2

The Royal Institute of Chartered Surveyors expects property prices to increase by an average of 3% in 2015, with no rises in London.

1 http://m.bbc.co.uk/news/30610781

2 http://m.bbc.co.uk/news/business-30325762