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Em

Em Morley

What is rent to rent?

Published On: January 28, 2014 at 12:25 pm

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Categories: Landlord News

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A recent BBC investigation has once again brought the subject of ‘rent to rent’ into the public eye.

What is rent to rent?

‘Rent to Rent’ is the process where a letting agent will let out a property on behalf of a landlord. The letting agency will then receive money from the tenant, of which an agreed fee will be given to the landlord.

What is rent to rent?

What is rent to rent?

Problems

The controversial practice, although not illegal, makes it difficult for some landlords to know who, and the number of, people actually living in their property. This problem was highlighted during the recent BBC report.

BBC London’s Charlotte Franks talked to landlord Maggie Khan, who rented her three-bedroom property to a letting agency. The agency in question, Marcus Matthews Management, instructed her that the property would be let to a family.

After the tenants failed to pay rent for the second consecutive month, Khan visited the property. To her shock, she found the living and dining rooms both had been converted into bedrooms, against her will and consent. A total of six individuals were living in the property, each paying up to £650 each pcm.[1] Khan had originally let the property for a total of £1600 pcm.

 

Permissions

Marcus Matthews Management was quick to defend their rights. A spokesman told the BBC that the contract that Khan had signed had not been breached. The spokesman said, ‘The tenancy agreement that she has, gives us permission to sublet. We are not allowed to sublet to bed and breakfast. We assumed that she had an HMO license as it’s the landlord’s responsibility.’[1]

It would appear that subletting schemes such as ‘rent to rent’ are on the increase and it is feared that this could ultimately make it difficult for tenants to be evicted. Landlords should remain vigilant and ask any questions that will ensure they are confident when using letting agents.

[1] http://www.bbc.co.uk/news/uk-england-london-26741443

 

Is government creating definitive rental index?

Published On: January 28, 2014 at 11:43 am

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The number of rental indices is currently enough to fill a football team. Of all of the various monthly versions available, it can be argued that the Government’s first yearly report is most in line with findings recorded from a number of letting agents.

According to the Office of National Statistics’ initial report, private rents across the U.K rose by a single percent in 2013[1]. Somewhat predictably, the highest increase was seen in London, with rents rising by 1.6%.

Despite the seemingly accurate figures, the government is creating definitive rental index and says it is continuing to develop the methods behind their index. At present, the Office of National Statistics records data from rental officers. These rental officers are employed with the Valuation Office Agency and Scottish and Welsh governments.

Is government creating definitive rental index?

Is government creating definitive rental index?

Conflicting Statistics

The accuracy of the ONS statistics has yet to be confirmed, with scepticism surrounding the number of rental indices released. Recordings from mortgage lenders, agents and government factions are often different, making it difficult to find accurate figures.

For example, recent figures from Sequence Lettings suggest that annual rents across the U.K are up by 8%, with rents in London rising by only 3%.

Hope

These new government figures give encouragement that they may be close to the definitive version of figures. It is hoped that these figures may become the lettings alternative to the Land Registry’s data on house sales.

[1] http://www.martinco.com/news/2014/01/28/has-the-government-created-definitive-rental-index/#.VMDAYy6sU40 

Rental Sector in Scotland is Thriving

Published On: January 24, 2014 at 4:11 pm

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The rental sector in Scotland is thriving and has changed the pace of the country’s housing market, as rental accommodation is now accepted as a viable housing option, says letting website Citylets.

The private rental sector has maintained strength and sustainability in 2013, revealed the Citylets Quarterly Report, Issue No. 28, covering October to December 2013.1

Rental Sector in Scotland is Thriving

Rental Sector in Scotland is Thriving

Average monthly rents have increased in Scotland to stand at £678. However, this is only an annual rise of 1%. It is interest in rental housing that continues to progress, based on website visitors.1

Edinburgh and Glasgow are continuously seeing a stable yet growing rental industry, however Citylets have highlighted renting in Aberdeen as beating the national norms, with average monthly rents well above £1,000, an annual rise of 8.2%.1

The highest prices rises in rent within Scotland were found in the AB24 postcode, which encompasses Old Aberdeen, Woodside, and Tillydrone. Rents here have increased 18.5% year-on-year.1

One-bedroom flats in Aberdeen are the most popular in the country, as properties are acquired only nine days after being advertised.1

Senior Analyst at Citylets, Dan Cookson, says that the figures from the report highlight the significance of the rental sector within Scotland.1

He comments: “When the first issue of the Citylets quarterly report was published in 2007, the housing boom was at its height and the iPhone had yet to be launched.

“It was hard to imagine then the transformation that the private rented sector was about to experience. So much has happened in that time: the explosion of the internet as a tool to source properties; rapid expansion of the rental market; improvements in quality and service; the development of new luxury build to rent properties; and the blurring of the lines between social housing and private rented housing, as housing associations and councils get involved.”1

1 http://old.lettingagenttoday.co.uk/news_features/Scotland-continues-to-embrace-rental-sector

 

 

Buy-to-Let Landlords on Buying Spree

Published On: January 24, 2014 at 10:23 am

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Categories: Finance News

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Competition in the buy-to-let market continues to grow as more landlords are using equity from their existing portfolios to invest in new properties.

Growth

New research from Mortgages for Business indicates that additional purchases accounted for a larger proportion of borrowing in the last quarter of 2013 for all property types. Additionally, landlords can now choose from more than 500 different mortgage types.

47% of new fixed rate mortgages were taken out for new buy-to-let properties in the final quarter of 2013. This is in comparison to 38% in quarter three and 31% at the beginning of 2013.[1]

Furthermore, the number of mortgages for new Houses in Multiple Occupation (HMOs) also rose during 2013. 29% of mortgages against HMO’s in the final quarter were for new investments, in comparison to 23% during quarter three and 20% in the final quarter of 2012.[1]

Remortgaging

Despite remortgaging making up the bulk of buy-to-let activity, there has been a substantial fall in activity during the last six months. During the final quarter of last year, 53% of buy-to-let transactions were a remortgage. This figure is down from 65% in quarter two. In the case of HMOs, 71% of buy-to-let activity was a remortgage in the final quarter, compared to 84% six months ago.[1]

Yields

As a consequence of spiralling price rises, returns on buy-to-let investments dropped for all property types during the last month of 2013. Fixed rate buy-to-let yields fell slightly to 5.9% from 6.3% in quarter three, while yields for HMOs dropped from 11.8% to 10.4%. [1]

David Whittaker, Managing Director of Mortgages for Business, feels that an increase in choices open to landlords does not necessarily just mean cheaper costs.

Whittaker explained: “More mortgage choice isn’t just delivering cheaper deals, there are now even more imaginative and flexible financing options out there too, many of which offer some of the best yields.

“With demand for tenancies as strong as ever, landlords are making use of a more buoyant situation to boost their portfolios. As we move into 2014, capital accumulation is accelerating and joining solid rental income to make buy-to-let consistently attractive to investors.”[1]

[1] http://everyinvestor.co.uk/2014/01/24/buy-let-landlords-buying-spree/

 

 

 

Software partnership for tenant repair services

Published On: January 23, 2014 at 12:29 pm

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A new software partnership for tenant repair services promises to be useful in assisting landlords with their tenant repair services. Software provider VTUK has come together with online tenant repair company Fixflo to provide an efficient online service.

Fixflo is an online reporting program designed specifically for property management agents, property and block managers throughout Britain.

As part of the arrangement, Fixflo is to be integrated in VTUK’s existing letting software Gemini. It is hoped that this integration will play a key role in assisting clients involved in property management.

Software partnership for tenant repair services

Software partnership for tenant repair services

Time consuming

The new Gemini-integrated Fixflo software is designed to help with landlord’s time-constraints. Speaking of the partnership, VTUK Chief Executive Peter Grant, said that, ‘managing a property portfolio can be incredibly time-consuming, however, with our lettings software, clients have access to a diverse range of compliance reminders, including rent collection and arrears management.’[1]

Grant went on to say that VTUK were, ‘truly impressed with Fixflo’s offering’[1] that their software would make it, ‘easier than ever for property managers to deal with repairs in an effective and timely manner.’[1]

It is hoped that the additional software will benefit not-only existing customers but, as Grant says, ‘clients and tenants alike.’[1]

[1] https://vtuksblog.wordpress.com/2014/04/16/vtuk-partnership-for-tenant-repair-service-fixflo/

 

Weather damage to rented property warning

Published On: January 23, 2014 at 10:50 am

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With the depth of winter upon us, cold morning and dark evenings could feel insignificant if damage occurs to your rented property. The wet and windy weather could be particularly damaging if it also causes frosty relations between you and your tenant or landlord.

Weather damage can occur in a range of ways. Storms, flooding and freezing conditions can all amount to problems with your property. Damage occurring to your home can be a stressful experience for all involved. The turn of the year has brought a fresh reminder from The Association of Residential Letting Agents to ensure that both parties are aware of their responsibilities in the case of weather damage.

Weather damage to rented property warning

Weather damage to rented property warning 

The need for clarity

It is vitally important that landlords and tenants are confident with their tenancy agreement to ensure that all weather-related problems can be solved as soon as possible. In her reminder, president of the ARLA, Susan Fitz-Gibbon, said it was absolutely, ‘essential’ that both parties, ‘know where their responsibilities lie.’

She added that, asking the right questions’ before entering any contract was extremely important. Fitz-Gibbon also said that it was essential that tenants, ‘fully understand the terms of the tenancy agreement’ to negate the risk of any future issues.

Things to remember

It is important to remember that regardless if you are a landlord or tenant, you will want any damage repairing quickly. Tenants should keep landlords contact details safe, record all damages to the property and inform landlords of any persisting problems.

Landlords should ensure that they take on all tasks outlined in the tenancy agreement in regards to weather damage. They should also advise the tenant who is responsible for features such as contents insurance in case of damage such as flooding to the property.

1) http://www.arla.co.uk/media/471982/bad-weather-arla-press.pdf#search=