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Em Morley

Private Tenants Pay Highest Energy Bills

Published On: May 24, 2012 at 9:54 am

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The Royal Institution of Chartered Surveyors (RICS) has issued statistics that do not make enjoyable reading for private tenants in England.

According to their figures, private tenants have to pay greater energy bills than homeowners. In the energy expenditure survey, it was revealed that tenants pay £31 more a year than homeowners. This figure rises to £90 more than tenants residing in social housing.

Private Tenants Pay Highest Energy Bills

Private Tenants Pay Highest Energy Bills

 

Insulation

Homeowners are more likely to insulate and regulate heating equipment than private landlords, say RICS. The organisation suggests this is due to a lack of financial incentive for landlords in order for them to make improvements to their property.

Homes with an electric heater installed can be anywhere between £196-£898 a year more than those with gas central heating. This is the highest contributing factor to energy spending.

More to be done

Head of RICS’ UK Policy, Jeremy Blackburn, is strongly in favour of improving heating standards for private tenants. Blackburn says: “Those renting privately should expect the same standards in insulation and heating as home owners and those in social housing. More needs to be done to ensure private rental property is fit for purpose and energy efficient.

“It is important that the Green Deal effectively addresses this at a time when tenants across the country are struggling with high fuel bills and increasing rents.

“RICS welcomes the Green Deal as a new way of financing energy efficiency improvements, but it is vital that tenants understand exactly what measures are being taken, why, and what the impact any measures will have on their energy bills.

“A mandatory Home Condition Report before the installation of all Green Deal measures would be a low-cost way of providing the consumer with a clear understanding of this.”[1]

[1] http://old.lettingagenttoday.co.uk/news_features/Private-tenants-paying-the-highest-energy-bills

 

 

Welsh Government Propose Licensing

Published On: May 23, 2012 at 4:46 pm

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The Welsh Government have proposed licensing for all private landlords and letting agents, in an attempt to clampdown on the sector.

The Residential Landlords Association (RLA) has disapproved the plans, which would be closely monitored by the rest of the UK, where many are pushing to regulate letting agents at least.

Anyone who rents out a residential property in Wales would need a license, said a white paper.

All landlords would be required to sign a register and pass a fit and proper person test. Letting agents would also be obligated to do the same.

The white paper explains: “Accreditation will secure full registration status, which is effectively a license to operate as a private landlord in Wales.”1

Welsh Government Propose Licensing

Welsh Government Propose Licensing

Legislation would come in the form of a new Housing Act, and concern all landlords and letting agents within Wales, regardless of the amount of properties they own or manage.

Wales has seen a booming private rental sector, with the number of properties doubling in the last ten years, to 182,000 houses, or one in seven homes in Wales.1

The white paper claimed there are “extremes”1 of good and bad practise in the private rental sector.

It also said that some tenants deal with “poor conditions, insecurity, and sometimes, threats of eviction”1 and complains of the “questionable practices of some landlords and letting and management agents”1, including excessive fees.

When accredited, landlords and letting agents would be required to practise to a set of minimum standards.

The white paper also says: “Failure to do so could result in penalties or other sanctions, proportionate to the failings in compliance. Codes of practice will be developed for landlords and agents.”1

A spokesperson for the RLA says that they welcome the recognition of the private rental sector in the white paper, but continues: “The RLA does, however, remain cautious of the need for further regulation whilst existing measures are not being properly enforced to target the minority of landlords who bring the sector into disrepute.”

“Extra regulation will inevitably lead to costs being passed on to tenants in higher rents.

“We also look forward to working with ministers, local authorities, and others to ensure tenants are more aware of the measures which are already there to protect them.”1

1 http://old.lettingagenttoday.co.uk/news_features/Welsh-government-set-to-license-landlords-and-letting-agents

 

 

Struggling First Time Buyers Means Better Buy-to-Let Business

Published On: May 22, 2012 at 12:43 pm

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The amount of buy-to-let mortgages offered to investors increased by one third over the first quarter (Q1) of 2012, say the Council of Mortgage Lenders (CML).

The CML revealed that 32,300 buy-to-let loans were provided in the first three months of the year, a 32% rise on Q1 of the previous year.1

However, the amount of mortgages offered to first time buyers in April decreased to the lowest number for nine months, according to E.surv, chartered surveyors.

The firm said that the number of mortgages leant to first time buyers in April was just 11,307, a 5% drop from March, and the lowest since last July.1

Mortgage providers are becoming reluctant to offer loans to first time buyers, because of the high loan-to-value rate that they need. Banks are more inclined to lend to buy-to-let landlords, as they generally have bigger deposits.

Struggling First Time Buyers Means Better Buy-to-Let Business

Struggling First Time Buyers Means Better Buy-to-Let Business

Business Development Director at E.surv, Richard Sexton, says that mortgage lenders have “begun to scale back” their offers to first time buyers.

He says: “Buy-to-let landlords are taking the places of first time buyers, as there is an absence of them in the market place because they can’t get loans.”

Sexton also notes that the housing sector would be in a “far worse place” than it is if buy-to-let landlords did not return to the market.1

Chief Executive of Dragonfly Property Finance, Jonathan Samuels, says that there has been a “seriously sharp spike” in applications for mortgages on buy-to-let homes in the first four months of 2012. He also predicts that this will continue “for some time yet.”

Samuels comments: “A shortage of rental stock and strong demand from the growing number of forced tenants will keep driving the sector forward. There’s a lot of portfolio building, as investors add properties to give them increased exposure.”

He believes that investors find the buy-to-let market a “pretty stable place to be”, as house prices drop, and mortgage lenders still find owner-occupiers risky.

“Investors feel that there’s a lot left in the buy-to-let market, and are putting their money where their mouth is,” says Samuels.

However, he also advises potential investors to “know what they’re doing”, and be prepared for rising interest rates.1

Buy-to-let lending is still just a third of its 2007 levels, despite sharp increases in the past year, says the CML.

Matt Hutchinson, Director of SpareRoom.co.uk, says: “Will buy-to-let lending ever return to 2007 levels? With average loan-to-values on buy-to-let mortgages at 75%, and average minimal rental cover at 125%, it is unlikely, as 25% deposits will prevent a large number of people, particularly amateur landlords, from buying rental property.”1

Tracy Kellett, Managing Director at BDI Home Finders, a company of buying agents, says that despite the buy-to-let sector being strong, it remains a “shadow of its pre-housing crash levels.”1

Housing minister Grant Shapps explains: “We do not have to make a choice between first time buyers and buy-to-let. We need both. And while a third of all mortgages went to first time buyers last year, only 12% went to buy-to-let landlords.

“But I’m determined to pull out all the stops for those who want to get on the property ladder, which is why in March, the Prime Minister and I launched the NewBuy Guarantee scheme, which is expected to enable up to 100,000 aspiring homeowners to buy newly built properties with just a fraction of the deposit they would normally need.”1

1 http://www.landlordexpert.co.uk/2012/05/21/struggling-first-time-buyers-means-better-buy-to-let-business-for-uk-landlords/

 

 

Buy-to-Let Market Needs Greater Innovation

Published On: May 18, 2012 at 2:59 pm

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Around three-quarters, 74%, of landlords think that the buy-to-let market needs greater innovation, while 89% also agree that the sector would benefit from added lenders or more competition, according to the National Landlords Association (NLA).1

Buy-to-Let Market Needs Greater Innovation

Buy-to-Let Market Needs Greater Innovation

The NLA’s research found that many landlords are disappointed with the present choice of buy-to-let products in the market; however, they also discovered that property purchases are rising. One in ten landlords have added properties to their portfolio in the past three months, and one in five are looking to buy more in the next 12 months.1

Additionally, over half of landlords studied do not think that access to buy-to-let mortgages is becoming easier, with three in five thinking that their individual circumstances as landlords are not being considered by mortgage lenders.1

David Salusbury, Chairman of the NLA, says: “Early signs of increasing property acquisition suggest that landlords are feeling more confident about future prospects of the buy-to-let market.

“However, while these findings are encouraging, some professional landlords with more extensive portfolios seem to be struggling to secure funds for additional expansion.

“The private rented sector is playing an increasingly important role in the provision of housing. Buy-to-let products must be sustainable, with consideration for the longer term, if the private rented sector is to rise to this challenge.”1

The NLA Landlord Optimism Index has become steady after a time of slow progression, following a huge drop four years ago.1 This suggests that landlords are more wary of their future prospects now.

Other discoveries in the NLA study are:

  • 72% of landlords are borrowing on all or some of their rental properties.
  • Landlords have an average of 7.7 buy-to-let loans on their portfolios.
  • 20% of landlords have taken out a new loan or remortgaged in the past 12 months.

1 http://www.landlords.org.uk/news-campaigns/news/buy-let-market-needs-greater-innovation-say-landlords

 

 

 

Landlords Avoid Legal Action due to a Pioneering Service

Published On: May 16, 2012 at 10:48 am

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The property industry will be transformed by the Home Log Book, an inspection that will deliver the most thorough examination of a home ever made.

The Institute of Specialist Surveyors and Engineers (ISSE) is launching the Home Log Book in an effort to protect private and public sector landlords from pricey legal action if their tenants do not property care for their property. They are advising all landlords to sign up for a property inspection.

Properties can become damp and mouldy if condensation develops in the house. Tenants drying their laundry on radiators, using unventilated tumble driers, not opening their windows, or not using central heating could cause this.

Despite the law stating that landlords are not responsible if this occurs, most landlords find it difficult to prove that the tenants are to blame if the case goes to court. This leaves the landlord with huge legal and repair bills.

Landlords Avoid Legal Action due to a Pioneering Service

Landlords Avoid Legal Action due to a Pioneering Service

ISSE trained and certified surveyors will conduct an in-depth inspection of a property, which will determine the competence of ventilation, for an arranged fee.

They will also check for other possible issues, for example, hazardous structural materials, identify security features, and assess the probability of external environmental impact, such as flooding.

The ISSE then provides the customer with a complete breakdown and report on the interior and exterior of the property. They will pinpoint any corrective work that is needed, and offer quotes from professional tradespeople.

The Home Log Book is then put onto a cloud-based storage system for future reference, along with supporting documents and guarantees.

It is not just landlords who can benefit from the surveys, however.

Those looking to improve their house, prospective buyers, or tenants about to sign an agreement can profit from having any hidden problems uncovered.

Chairman and Fellow of the ISSE, William Kidd, says: “By investing in a Home Log Book, landlords will have documented evidence of the condition of their property which, should there be any issue with their tenants, they could produce in court.”1

Additional information about the ISSE and the Home Log Book can be found at www.isse.org.uk.

1 http://www.landlordexpert.co.uk/2012/05/15/landlords-could-avoid-legal-action-thanks-to-a-pioneering-service/

Squatting now a Criminal Offence

Published On: May 5, 2012 at 11:12 am

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It is now a criminal offence to squat in residential properties; however, enforcing the law may not be simple.

Supporters of the new legislation to forbid squatting in residential buildings throughout England and Wales would like to see the laws expanded to include commercial buildings. Those against the regulations believe that there is not enough proof that the laws are needed.

Despite the legislation only being in place for a few weeks, both private landlords and local authorities have used it against squatters.

Squatting now a Criminal Offence

Squatting now a Criminal Offence

By analysing the sentencing of the first person to be found guilty of squatting in a residential unit, we can determine how the courts may find it difficult to impose their power on this issue. This case was rather simple. However, definitions relating to the offence may make it harder for other offenders to be convicted.

1977 saw the Criminal Law Act and Protection from Eviction Act, which made it illegal to threaten or use violence to enter a property where someone is present and resists the entry. Landlords found it difficult to physically remove trespassers on their property after this, and as a result, expensive and slow civil solutions have been the only options for eliminating a squatter.

In empty buildings, squatters have been protected against removal. This has led to people not realising that squatting is already an offence in certain circumstances. These include cases where a squatter’s presence affects the rights of an existing tenant or lawful occupier.

The new laws provide more protection to residential landlords who may have void periods within their properties.

The new legislation comes in section 144 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. It is now illegal for an individual to enter a residential property, knowing that they are trespassing. The police can arrest and remove trespassers, given the trespassers’ intention to live in the building.

From a landlord’s viewpoint, the usefulness of the act could be restricted by the loose term of a squatter. The laws also do not apply to previous or current tenants who have not paid their rent, or have remained in the property after the tenancy ends. Landlords may have hoped to use the legislation to evict these tenants, but this is not the act’s purpose.

It may additionally be problematic for the police to define whether the trespasser is a squatter or a tenant. This may halt the police’s involvement in these cases.

Regardless, the 12-week jail sentence given to the first squatter convicted is a positive move for landlords. However, it is believed that future cases may not be as straightforward. This squatter was only arrested after police arrested them for a different offence. When they gave their address as the illegal residence, they were found to be squatting.

Regular squatters quickly acquire the skills in avoiding arrest and will be confident in dodging the new laws also. Squatters could say that they are staying in an attached commercial unit or declare that they are the victim of a fraudulent letting. In these cases, the police may find it tough to make an arrest.

The first conviction has proven the court’s confidence in these cases, although there are many controversial parts of the legislation that could avoid effectiveness.