Written By Em

Em Morley

Government Backs Rip-Off Letting Agents

Published On: November 27, 2014 at 2:38 pm

Tags: Generation Rent,rip off letting agents

Generation Rent, the campaign group for the rights of renters, says that the Government are favouring letting agents that regularly rip-off tenants.

The organisation says that the Government have voted against private renters, who are “charged extortionate fees by letting agents, get evicted for complaining about conditions in their home, and have their money unprotected in the event a letting agent goes bust.”¹

Government Backs Rip-Off Letting Agents

This week, the House of Lords discussed the Consumer Rights Bill during the Report Stage. Amendments to the Bill were overturned by a vote. These changes included requiring letting agents to insure rent money on behalf of landlords, banning letting agent fees to tenants, and banning the eviction of tenants whose complaints are supported by the local authority.

Labour’s Baroness Hayter’s Amendment 44 for mandatory client protection was defeated by 168 votes to 123. Amendment 44ZA for the protection of tenants was overturned by 156 votes to 113.

Government minister Baroness Neville-Rolfe announced amendments that require letting agents to display their membership to a client money protection scheme, and redress schemes.

The problem of revenge evictions will be discussed again in the Commons, when Sarah Teather MP’s Private Member’s Bill, the Tenancies (Reform) Bill is considered.

Private renters campaigned in Westminster to pressure MPs to attend the vote, which will be conducted outside the ordinary Parliamentary schedule.

Director at Generation Rent, Alex Hilton, says: “By voting down a ban on letting fees, the Government has told the country’s nine million private renters that the profitability of letting agents is more important than their consumer rights. The Government’s answer is transparency, but that’s no answer at all. Tenants don’t get to choose the agent so they can’t negotiate down fees.

“Revenge evictions can still be banned with a vote in the Commons on Friday, but renters need as many MPs as possible to show up to ensure that the Bill is passed.”¹

¹http://www.landlordtoday.co.uk/news_features/Government-“backs-rip-off-letting-agents”-say-campaigners

Housing Provider Launches Apprenticeship Scheme

Published On: November 20, 2014 at 4:03 pm

Author: Em Morley

Categories: Property News

Tags: apprenticeship scheme,mulbury homes apprenticenships

An affordable housing provider has launched an apprenticeship scheme aimed at producing the next generation of building workers.

Housing Provider Launches Apprenticeship Scheme

Mulbury Homes had 12 construction-based placements in the pipeline for this year, having already provided opportunities for 11 apprentices. All successful candidates will be given a placement on the Constructing the Future Lancashire scheme. The scheme is being run by the Calico Group, with them working on all of Mulbury Homes’ projects in the North West.

Training

The successful students will be trained in specialist manual trades such as bricklaying and joinery, in an attempt to improve the number of youngsters starting out in the construction industry.

Isaac Walker is an apprentice joiner on one of the Mulbury Housing schemes. He said that he is enjoying the “diversity of the role,” which means he is “developing new skills every day.”[1]

Greg Mullin, Director at Mulbury Homes, said: “It’s well-documented that the construction industry is experiencing a shortage in the number of skilled workers available as the sector continues recovering.

“Apprentices can help plug those skills gaps and give us our workforce of the future which is why we’re committed to supporting young people into the industry through our apprenticeship scheme.”[1]

Discouraging

Christian Bury, Managing Director at Harbour Construction, who are one of the main contractors of the scheme, said that too many young people were getting pressured into attending university. Bury said: “Attending university has become routine for getting a foot on the career ladder, so it can be quite discouraging for young adults who want to enter a career in construction via vocational education.

“Through this partnership with the Calico Group and Mulbury Homes we’re easing the skills shortage by providing youngsters with the training needed to succeed in the construction sector.

“The apprentices we’re supporting have made strong progress so far and we are looking forward to welcoming more trainees on board.”[1]

[1] http://www.housingexcellence.co.uk/news/mulbury-launches-apprenticeship-scheme

What is Rental Yield and How is it Calculated?

Published On: November 19, 2014 at 5:01 pm

Author: Em Morley

Categories: Finance News

Tags: BTL rental yield,rental yield

The easiest way to work out rental yield is to divide the property’s price by the yearly rent taken.

For example, if a house costs £500,000 and takes £850 in rent a week, the yield is 8.8%.

What is Rental Yield and How is it Calculated?

This is usually the figure mortgage lenders are referring to when they say rental yield. Research in this sector will also generally use this method. However, this number is actually a gross yield, and does not consider the extra costs associated with managing the property.

Landlords looking to receive an income after costs on the property, should be working out a true yield, or yield net of costs.

The mortgage is probably going to be the biggest cost to the landlord. Ongoing payouts for maintenance, insurance, ground rent, service charges and letting agent fees should also be allowed.

Insurance and maintenance can easily eat up 15% of the yearly rent. A letting agent will also take an extra 10%.

Mortgages should be considered, as the majority of landlords have an interest-only loan, where the monthly repayments are lower than ordinary mortgages. If a landlord buys a house for £500,000 with a 40% deposit, and the remainder interest-only rate of 4.5% is borrowed, the costs will be £1,125 a month.

Annual mortgage costs would then be £13,500. Considering the extra 15% for maintenance and insurance, the annual costs now exceed £20,000. If annual rent adds up to £24,000, the true yield is 4.8%.

If letting agent fees are added onto this, the real yield drops to 3.9%. However, this is still an appealing net yield.

Professional landlords are advising aspiring investors that if they calculate net yields in this way, they may result in negative figures.

Despite recent increases in rents, there has been a growth in house prices also, meaning that even gross yields are dropping below 4%.

Private UK Landlords Required to Check Immigration Status

Published On: November 19, 2014 at 4:12 pm

Author: Em Morley

Categories: Landlord News

Tags: Immigration Act 2014

The requirements for landlords renting out a private property stated in the Immigration Act 2014 are steadily being introduced.

From 1^st December, landlords will be obliged to conduct checks regarding a tenant’s immigration status. This will be required at the beginning of a new tenancy agreement, and throughout their lease.

A trial of the new rules will begin in Birmingham, Wolverhampton, Dudley, Walsall, and Sandwell. It is believed that the rest of the country will follow in 2015.

The majority of residential tenancies will be affected by the Act, however, it will not apply to student accommodation, tenancies over seven years, social housing, or tenancy agreements that begun before the Act came into force, or which are later renewed, considering there is not a break in occupation.

The checks will put added pressure on landlords, as the failure to comply could lead to fines. Existing and prospective landlords should fully understand the rules, and create a strategy of how they will observe them.

These measures are designed to aid the Government’s clamp down on landlords who offer unacceptable or illegal rental accommodation.

Landlords who do not comply with the checking guidelines will face fines of up to £3,000 for repeat offending, with no right of appeal. The Home Office have issued a draft code of conduct on civil penalties for landlords and their agents.

The requirements are placed on landlords who must assess tenant documentation to determine whether they have a right to rent. Follow up checks must also be conducted, particularly if a specific tenant’s right to live in the UK is time limited.

Private UK Landlords Required to Check Immigration Status

If a landlord’s checks reveal that a tenant does not have a right to rent, then they must report to the Home Office. If they are unsure, landlords can request a rent check through the Home Office’s Landlord’s Checking Service. If a landlord takes this route, they will have a statutory defence for the first 12 months against a penalty, if the Home Office allow them to go through with a tenancy.

If the Home Office announce that the landlord cannot rent out the property to this tenant, then the landlord will be required to file a report with the Home Office; failing to comply with this will potentially result in a fine.

If agreed, responsibility can be transferred to a letting or managing agent. Any agency agreement a landlord has should be reviewed before this occurs. However, it is probably that an agent will charge for conducting the checks.

Those who have a right to rent are: British citizens, nationals of an EEA state, Swiss nationals, and those with leave to enter and remain in the UK; as long as the leave does not prohibit renting UK property.

Immigration and Security Minister James Brokenshire has stated that the checks should be quick and simple, however, the Royal Institution of Chartered Surveyors (RICS) has expressed their worries over the pressure placed on landlords in monitoring immigration.

The Home Office has noted that the checks may result in landlords benefitting from a lower loss of rental income. However, it is feared that the administration involved may be arduous.

Landlords must conduct checks every year throughout the tenancy term, and must store the information from tenants in accordance with the Data Protection Act. Some have voiced their concerns that the checks could lead to landlords favouring British citizens.

It is thought that the nationwide introduction of the Act will not occur until the general election has passed, however, landlords should consider how they would observe the Act’s requirements.

Tenants claim to have paid for repairs

Published On: November 17, 2014 at 4:39 pm

Author: Em Morley

Categories: Landlord News

Tags: tenants pay for repairs

Interesting research from AA Home Membership suggest that around one-third of renters claim to have fixed a problem in their home, instead of asking their landlord.

The findings indicate that the average price of a repair arranged by a tenant was around £63. One in six said that they paid in excess of £100.[1]

Common Problems

Some common household problems in need of repair were blocked drains, leaking showers and a broken lock, with one in six tenants complaining of these. One in seven repaired a cracked pipe, with one in fourteen even purchasing a new boiler.[1]

Of those questioned, over half replied that they chose to solve problems themselves as it was ‘quicker and easier.’[1] Around twenty-five percent claimed guilt of causing the problem led them to find a solution themselves, while one in eight rather alarmingly said that their landlord had refused to help.

A further six percent suggested that their landlord had made the problem worse when trying to solve issues. AA’s research found that the majority of landlords had visited their landlords on the same day although nearly one-third had to wait for more than a week.

Tenants claim to have paid for repairs

Perks

Head of AA Home Membership, Helen Brooker, said that for some tenants, ‘not being responsible for repairs is often seen as a perk of renting.’[1] She goes on to say however that the research shows tenants, ‘seem to be more conscientious than they’re often given credit for.’[1]

Responsibility

Brooker notes that clear guidelines on accountability can go a long way in solving common repair problems efficiently. ‘Fallouts over repairs are quite common,’ says Brooker, but, ‘having clear guidelines about who is responsible for particular issues could be helpful, as could having reasonable expectations as to how landlords will deal with household repairs.’[1]

In addition, Brooker states the importance of landlords leaving contact details of trusted tradespeople to deal with any problems in their absence. She says, ‘some things, relating to gas and electrical problems for example, should only be carried out by properly qualified professionals. It could be useful for landlords to leave details of somebody the tenant could contact in their absence, such as a trusted tradesperson.’[1]

[1] http://www.landlordtoday.co.uk/news_features/A-third-of-tenants-claim-to-have-paid-for-repairs

Movebubble puts renters first

Published On: November 6, 2014 at 4:39 pm

Author: Em Morley

Categories: Property News

Tags: Movebubble

Leading rental platform Movebubble has introduced substantial changes to its service in order to try and improve the often stressful period of moving house for tenants.

New Features

Amongst its new changes designed to make the moving proves easier and more efficient for tenants, Movebubble has introduced features such as Renter Profiles and a Viewing Planner. Renter Profiles enable landlords to see ratings and reviews of a tenant from previous housemates or homeowners, which will ultimately be of benefit to prospective suitors. A Viewing Planner gives the tenant a chance to organise a viewing online.

Growth

Three months of solid growth has seen Movebubble achieve 20,000 registered users and in excess of 250,000 searches for property have taken place through the site.

CEO of Movebubble Aidan Rusbhy, said that there were exciting times ahead for the business. He said that, ‘renting is one of the last markets to be improved through collaborative technology,’ and that Movebubble are, ‘excited to be leading the way.’[1]

He went on to say, ‘we’ve seen a staggering response from renters since we launched in June. As a renter myself, I know how exciting it is to have a platform designed specifically to make our lives easier. At Summit, we’re rolling out new features that represent a milestone in our mission to reduce the costs, lack of transparency and unfair treatment that over nine million renters face while letting property in the UK. If you rent, sign up to Movebubble and make moving better.’[1]

Movebubble puts renters first

Profiles

As mentioned, renters registered with Movebubble can build a profile that gives them the opportunity to make them look like the ideal tenant. Instead of having to provide references to letting agents, Renter Profiles gives the tenant control over their own information. This can only be shared with the tenants’ chosen potential landlords.

Movebubble renters can also provide references about their landlord or property to pass on to other prospective tenants. A survey by Movebubble of a 1,000 tenants found that around 70% would have preferred landlord references in the past, to avoid them being ripped off by rogues.

CMO of Movebubble Logan Hall says that his landlords prefer to be ahead of the game. Hall said, ‘the more forward thinking and trustworthy landlords see the value in building their online rental brands early and are jumping on-board and building their Movebubble profile.’[1]

Hall went on; ‘ We have seen this across many other industries with the likes of seller ratings on Ebay, Airbnb, Uber and many more.’[1]

Rushby pointed to the success of other industries online and questioned why this would not work in the property market. Mr Rushby stated,’ People are used to booking restaurants, gym classes and gig tickets online, so why not viewings of properties? This is how we want to operate, it’s about time people woke up to this.’[1]

[1] http://www.landlordtoday.co.uk/news_features/Movebubble-on-a-mission-to-put-renters-first