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Em Morley

27% of landlords thinking of using online agent

Published On: June 6, 2016 at 11:15 am

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Categories: Landlord News

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A new survey has revealed that 27% of landlords believe an online letting agency to now be a better option for managing property than a more conventional one.

The investigation, carried out by property consultancy Allsop, also indicates that 31% of buy-to-let landlords are now considering going online in order to save money.

Online letting agents

Further results show that 59% of landlords feel that Government tax changes for the private rental sector will harm their investment profitability. A further 41% said that they are now considering incorporating their business.

40% of investors asked in the survey said that they feel rental growth will increase during the next six months.

37% have been encouraged by heightened demand from their tenants, up from just 4% in the previous six months.

27% of landlords thinking of using online agent

27% of landlords thinking of using online agent

Changing preferences

In conclusion, Allsop stated, ‘it would not surprise us if the preference for online lettings grow in the coming years. A hybrid model of providing expert advice by technological advances, allows for innovative management and letting solutions.’[1]

This news comes on the heels of the launch of Britain’s first online commercial estate and letting agency last week. Virtual Commercial is looking to provide those looking to set or let a commercial home in England and Wales a fixed fee service to help them with their duties.

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/6/over-a-quarter-of-landlords-consider-online-letting-agents-to-save-money

 

 

One in Five Landlords and Tenants Unprotected by Client Money Protection

Published On: June 6, 2016 at 9:25 am

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One in Five Landlords and Tenants Unprotected by Client Money Protection

One in Five Landlords and Tenants Unprotected by Client Money Protection

At least one in five landlords and tenants are not protected by Client Money Protection (CMP), according to a new study.

Research by YouGov, conducted on behalf of SAFEagent, shows that hundreds of pounds of landlords’ and tenants’ money held by letting agents is at risk because the funds are not protected by CMP.

Letting agents in the UK currently hold over £2.7 billion of landlords’ and tenants’ money in the form of rent payments and tenancy deposits. However, at least 20% of landlords and tenants would be unable to recover their funds if an agent stole the cash or used it fraudulently, as their money is not protected under the CMP scheme.

With around 61% of tenants incorrectly believing that their money is protected by law, the SAFEagent Awareness Week kicks off today, highlighting the importance of CMP for landlords and tenants when letting through an agent.

Although compulsory CMP is now finally on the Government’s agenda, through amendments to the Housing and Planning Bill, many consumers are still at risk. Therefore, SAFEagent is campaigning for full and mandatory CMP.

The Chair of SAFEagent, John Midgley, explains: “If an agent were to steal landlord or tenant money without CMP in place, there’s little chance of getting their money back. Would you use a travel agency who isn’t ABTA protected? Consumers who use agents without CMP in place are taking a massive risk.

“While we are finally getting closer to mandatory CMP, we aren’t there yet. It is so important that tenants and landlords understand that the right to redress only goes so far, and they need to choose their agent wisely by asking if they are part of a CMP scheme before signing on the dotted line.”

Find out more about SAFEagent Awareness Week (6th-10th June) on the firm’s page: http://safeagents.co.uk/awareness-week/

Over a Third of Landlords Plan to Invest in Student Property This Year

Published On: June 6, 2016 at 8:43 am

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Over a third of buy-to-let landlords plan to invest in student property this year, according to a new report by The Mistoria Group.

The research by the student property investment specialist shows that one in ten student landlords say their Houses in Multiple Occupation (HMOs) allow them to offset the new tax rules introduced by the Chancellor and remain profitable, while a further 50% do not believe any other asset class offers the same yields and return on investment as student property.

Over a Third of Landlords Plan to Invest in Student Property This Year

Over a Third of Landlords Plan to Invest in Student Property This Year

It seems that the new 3% Stamp Duty surcharge for buy-to-let landlords and second homebuyers has not dampened enthusiasm for the student property market.

While the rest of the buy-to-let sector may have slowed down, the same cannot be said for student property investment, according to the group. The report indicates that 35% of student landlords purchased HMO properties in the first quarter of 2016 to beat the higher tax rate, and a further 43% plan to acquire between two and three new student properties over the next 18 months.

If you are considering an investment in student property, here are some helpful dos and don’ts to think about: /student-property-investment-dos-donts/

The Managing Director of The Mistoria Group, Mish Liyanage, says: “Student accommodation can offer a number of attractive features to investors. The yields are high, as students settle for less space than other tenants, occupancy is typically very good, and it is neatly counter-cyclical, as more people go to university during economic downturns.

“Student property is a robust asset class. Since 2011, student accommodation has outperformed all other traditional property assets and has been the strongest growing investment property market in the UK. It has also continued to be one of the most resilient investment sectors, with rental incomes and property values remaining stable or increasing. The attraction of the student accommodation sector has been driven by structural undersupply and positive rental growth year-on-year.”

He advises: “This growth in student numbers is a great opportunity for landlords and investors to provide the right type of property that will attract lucrative students. Student accommodation has proven to provide better rental yields and there is an annual market for new students. What’s more, the rent is guaranteed by a parent or guardian and is paid promptly.

“A high quality HMO in the North West, which will house four students, can be purchased for just £160,000. The return on investment is very attractive too, with 3-8% cash rental and 5% capital growth.”

A separate study by LendInvest recently confirmed that landlords seeking the highest rental yields should look to buy properties in university towns in the North West.

A Guide to Letting to Benefit Tenants

Published On: June 5, 2016 at 8:22 am

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Over recent years, DSS (or benefit) tenants have been given a bad name, which has led to many landlords becoming wary of letting to them. The problem is that during the recession, landlords across the country saw more of their tenants struggling to afford their rent payments, and unfortunately DSS tenants seemed to suffer the most.

Universal Credit has also made the situation worse, with many claimants suffering long waiting times in the switchover from the old welfare system to the new. Additionally, a number of DSS tenants have had their benefit allowances cut, and those that live in private rental accommodation are now responsible for paying their housing benefit to their landlords. Even though recent events have made it sound like letting to DSS tenants is too risky, the fact of the matter is that it is necessary, and with careful planning it can even be financially viable. So here we look at everything landlords need to know about letting to DSS tenants:

What is a DSS Tenant?

DSS stands for Department of Social Security, which is now a defunct Government agency that has been replaced by the Department for Work and Pensions (DWP). The DWP is the sector of the Government that is in charge of welfare and pensions, therefore a DSS tenant is one that receives welfare.

Generally, DSS tenants are those that receive housing benefit, with the amount they receive depending on their circumstances and income. When looking for a property to rent, a tenant will usually tell you if they receive benefits up front, as if you agree to let to them, they will have to fill in certain forms that notify their housing officer.

A Guide to Letting to Benefit Tenants

A Guide to Letting to Benefit Tenants

What are the Risks?

One of the main reasons landlords are uninclined to let to DSS tenants is because they have a bad reputation. There are those that believe that someone must have done something wrong or be irresponsible with money if they require benefits, and news stories featuring DSS tenants who have destroyed private rental properties have done little to help matters.

Furthermore, some DSS tenants’ rent is higher than the amount they receive in housing benefits, meaning they have to make up the shortfall each month. This often concerns landlords as it means there is a higher risk of their tenants falling into rent arrears, which they will then have to chase up, or even start the eviction process if it happens on a regular basis.

Why Let to DSS Tenants?

The fact of the matter is that, even though DSS tenants have a bad reputation, it is unfair to tar them all with the same brush. Regardless of whether your tenants receive housing benefits or not, there is always the risk that they could fall into rent arrears, which is why all landlords should have an extensive landlord insurance policy complete with rent guarantee insurance in place.

With the right protection and contingency plans, letting to DSS tenants isn’t too much of a risk, and you may even find it beneficial to your business. Furthermore, those on housing benefits are practically guaranteed to receive a set amount of money each month from the Government, while tenants that solely rely on their salary to pay their rent could find themselves struggling if they are made redundant. In a way, if you negate certain risks, letting to DSS tenants can be more stable than letting to those who do not receive benefits.

How to Protect Your Business

There are a number of ways to protect your business against the risks associated with DSS tenants, including:

  • Creating a detailed tenancy agreement, including information on late payments and rent arrears.
  • Meeting your tenants in person to gain an idea of what they’re like and whether they seem trustworthy.
  • Performing thorough background checks on each tenant, including whether they have ever missed rent payments before.
  • Asking your tenant to arrange having their housing benefit paid directly to you, especially if you are worried about their budgeting skills.
  • Having a contingency plan in place should your tenant fall into rent arrears or you come across any other issues.

A Landlord’s Guide to Gas Safety

Published On: June 4, 2016 at 8:34 am

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As a landlord, you have legal responsibilities to your tenants regarding gas safety.

Gas Safe Register has put together a guide for helping you understand the law for rental accommodation.

While you may rent out a standard buy-to-let property, be aware that landlords’ duties apply to a wide range of accommodation, including, but not exclusively:

  • Residential premises provided for rent by local authorities, housing associations, private sector landlords, housing co-operatives and hostels.
  • Rooms to rent in bed-sit accommodation, private households, bed and breakfast accommodation and hotels.
  • Rental holiday accommodation, such as chalets, cottages, flats, caravans and narrow boats on inland waterways.

Landlords’ responsibilities regarding gas safety are included in the Gas Safety (Installation and Use) Regulations 1998. The law aims to ensure that gas appliances, fittings and flues provided for tenants are safe.

If you rent out a property equipped with gas appliances, you have three main responsibilities:

Maintenance

A Landlord's Guide to Gas Safety

A Landlord’s Guide to Gas Safety

Pipework, appliances and flues must be maintained in a safe condition. Gas appliances should be serviced in accordance with the manufacturer’s instructions. If these are not available to you, it is recommended that they are serviced annually, unless you are advised otherwise by a Gas Safe registered engineer.

Gas safety checks

A 12-monthly gas safety check must be carried out on every gas appliance and flue. These checks make sure that gas fittings and appliances are safe to use.

Record

You must provide your tenant with a record of the annual gas safety check within 28 days of the check being completed, or to new tenants before they move in. You must keep copies of the gas safety record for two years. The Gas Safety Record must contain the following:

  • A description and location of each appliance and/or flue that have been checked.
  • The name, registration number and signature of the engineer that carried out the check.
  • The date on which the appliance and/or flue was checked.
  • The address of the property at which the appliance and/or flue is installed.
  • The name and address of the landlord (or their agent where appropriate).
  • Any defect identified and any action required or taken to fix it.
  • Confirmation of the results of operational safety checks carried out on the appliances.

An example of a landlords Gas Safety Record can be viewed here: http://www.gassaferegister.co.uk/images/Landlords_gas_safety_record_large.jpg

You must also note that all installation, maintenance and safety checks need to be conducted by a Gas Safe registered engineer. These engineers have been checked to ensure they are competent and qualified to work safely and legally with gas.

To find a Gas Safe registered engineer in your area, you can use an online search or call 0800 408 5500.

Gas engineers often have a range of qualifications that allow them to carry out specific types of gas work. You must check that they are qualified to do the job you are requesting. Gas Safe Register has a check an engineer service, or you could look on the back of the engineer’s Gas Safe Register ID card to confirm they are qualified for the work you need doing. All gas engineers carry these cards, which have a unique license number. Always ask to see this card.

If a tenant has their own gas appliance that you did not provide, you are only responsible for the maintenance of the gas pipework, not for the actual appliance.

It is also your responsibility to ensure your tenants know where to turn off the gas and what to do in the event of a gas emergency.

If you are worried about your tenants denying you access to the property to make checks or complete maintenance, you should make sure that a clause is included in your tenancy agreement that allows you access. It is your duty to take all reasonable steps to ensure that work is carried out, so this may involve giving written notice to a tenant requesting access and explaining the reason. It is a good idea to keep a record of any action, in case a tenant refuses access.

Also, remember that regardless of how short your lease term may be, you are still a landlord and still have legal responsibilities for gas safety.

More information on gas safety can be found on the Gas Safe Register website: www.GasSafeRegister.co.uk

North East property prices rise by £1,000 in May

Published On: June 3, 2016 at 11:35 am

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Categories: Property News

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North East property values increased by 0.6% during the last month. This added £1,000 to the value of a typical home.

These figures suggest that some sort of calm is returning to property prices in the region, which saw values increase by 3.1% in March, then fall 4% in April.

North East Property

The average property price in the region currently stands at £156,975. This is £996 more than the average price recorded at the end of April and is 1.8% greater than at the same time last year. In cash terms, this rise amounts of £2,525.

Month-on-month, the highest growth was recorded in Whitley Bay. Prices here rose by 3.8%. Other areas with considerable growth include Houghton-le-Spring (2.5%), Sunderland (2.4%) and Gateshead (2.2%).

On the other hand, there were falls in Jarrow (-1.9%), Seaham (-1.4%) and Durham City and North Shields (0.6%).

Rental rising

In terms of rent, prices rose by an average of £12 per calendar month to £578pcm. This represents a rise of 1.6%, with the average cost of a property in the North East increasing by £3 every week.

Rents in the region are now £30 per month greater than in May 2015 and £18 higher than in May 2014.

Presently, Blyth is the cheapest place to rent in the North East, with monthly rents averaging at £403.

Peterlee is the regions buy-to-let capital, offering rental yields of 6.1%. Other good performers include Gateshead with yields of 5.4%, Sunderland with 5.3% and Newcastle with 5.1%.

Sliding property prices and increasing rents have led yields in the North East to rise by just 0.1% to 4.4%.

North East property prices rise by £1,000 in May

North East property prices rise by £1,000 in May

Settling down

Ajay Jagota, founder of North East based sales and lettings firm KIS, said: ‘after a lively few months which saw North East house prices change positively or negatively by at least 3% in January, March and April it’s predictable and perhaps even a little welcome that prices have settled down over the last four weeks. Real growth in the North East property market is currently in rents, which after at least two years of stagnation have risen from an average of £552 a month in March to £578 today.’[1]

‘This could suggest falling stocks of rented homes, which would support the claims that tax changes are forcing landlords to leave the market. This doesn’t just have a negative impact on the people who will have to find almost £1000 in deposits to move into a new rental home, it could have a profound impact on the region’s economic future,’ Jagota continued.[1]

[1] http://www.propertyreporter.co.uk/property/north-east-house-prices-rise-1000-in-may.html