Posts with tag: letting agents

Buy-to-Let returns highest for 14 months

Published On: February 19, 2016 at 12:39 pm

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The most recent Buy-To-Let Index from Your Move and Reeds Rains has indicated that returns from buy-to-let property are soaring.

Data from the report shows that returns currently stand at their highest level since November 2014.

Growth

Looking into both rental income and capital growth, the average landlord in England and Wales has seen total returns of 12% in the year to January. This is a rise from the 11.2% recorded in the twelve months to December and represents a fourteen month high. In November 2014, returns stood at 12.3%.

In absolute terms, this means that the typical landlord in England and Wales has seen a return of £21,988 in the last year, before any deductions such as mortgage payments.

Of this, the average capital gain totalled £13,594, with rental income making up £8,394 over the same period.

Rental yields have proven to be sturdy when faced by price increases. The gross yield on a rental property in England and Wales remains steady at 4.9% in January, as it was in December 2015. Annually, this was slightly less than the 5.0% seen in January 2015.

‘Picking up’

‘Buy-to-let returns are building and property prices are picking up-as the housing shortage across the UK intensifies,’ observes Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘Landlords’ balance sheets are looking healthier than at any point since 2014 and property investors are looking at an excellent rate of return from their portfolios. With house prices rising rapidly into the New Year, this acceleration will be a welcome addition to the wealth of landlords on paper, while solid rental yields are underpinning total returns pushing well into the double digits.’[1]

Buy-to-Let returns highest for 14 months

Buy-to-Let returns highest for 14 months

‘Stamp duty premiums on new buy-to-let purchases are the rhino in the room-everyone is talking about the 1st April deadline and the extra purchase costs are perceived by some commentators as potentially hazardous. But this is a little simplistic. Landlords are long-term investors and generally take good advice before making a new purchase, while the real changes will come when some landlords see gradual changes to their tax relief on mortgage interest. The rules around UK property are changing-but there is no bull in the buy-to-let china shop,’ he continued.[1]

Shifts

Mr Gill believes that, ‘in 2016, the big shift is likely to be in favour of existing landlords, potentially at the expense of those planning to start up as a landlord for the first time or expand their portfolio.’ He said that as a result, ‘it will be interesting to see how the rental market responds if there is a disruption to investment in supply.’[1]

Concluding, Gill said that, ‘this is likely to be a short-term effect. Over the longer term there is a consistent and developing lack of housing across all tenures, for a spiralling population. Owners and renters alike will see the cost of somewhere to live continue to rise, whether expressed in rents or prices. Stamp duty surcharges could funnel more money from the industry to the Treasury, but ultimately will not change the level of demand from tenants

[1] http://www.propertyreporter.co.uk/landlords/best-buy-to-let-returns-since-2014.html

 

The Court Case That Could Weaken Right To Rent

Published On: February 18, 2016 at 11:30 am

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A recent court case ruling could affect the way that landlords and letting agents are penalised under the Right to Rent scheme.

Since 1st February, landlords or their letting agents have been obliged to conduct immigration checks on all prospective tenants.

However, the court case in question did not involve landlords or letting agents – it regarded the budget airline Ryanair. The outcome of the case suggests that the Government may be open to legal challenges from landlords or agents under the private rental sector Right to Rent scheme.

The Home Office has claimed that it will not penalise a landlord or agent that has been caught out by well-forged documents.

In the case, Ryanair was appealing against Home Office fines imposed for carrying two illegal immigrants into the UK.

Judge Damien Lochrane noted that even trained immigration officers find it difficult to spot forgeries.

He ruled that Ryanair should not have been fined for flying the Albanian couple from Majorca to Edinburgh in May 2015.

The pair had already passed through checks by Spanish border police and Ryanair, before UK border control officers at Edinburgh airport picked up their false documents.

The judge insisted that the way the regime for airlines to check passports is operated by the Home Office “offends the basic concepts of justice and indeed rule of law”1.

The Court Case That Could Weaken Right To Rent

The Court Case That Could Weaken Right To Rent

He added that airline staff could not be expected to spot well-forged documents that even trained immigration officers could not detect.

The Policy Director at the Residential Landlords Association (RLA), David Smith, points out the ruling is not binding on other courts.

However, he says the case does raise the prospect that under Right to Rent, a landlord or agent that has been tricked by a well-forged document could be successful in an appeal against any action taken against them by the Home Office.

The Government has previously stated that it will not go after landlords and agents that have been duped by false documentation, but it has not been clear on the details.

It has emphasised that it will target landlords and letting agents that fail to conduct checks and who are persistent offenders.

The Ryanair ruling arrives as the new Immigration Bill makes its way through Parliament. If passed, it will introduce criminal penalties for landlords and agents that do not carry out Right to Rent checks.

Smith states: “This court ruling vindicates what we have been saying all along, that landlords cannot and should not be expected to act as border police or to detect forgeries that trained and experienced airline staff and immigration officers might miss.

“In light of this case, and to save the Government money from losing similar actions brought by landlords, we call on the Government to provide better information to landlords about document forgeries and to offer more clarity as to the legal responsibility of landlords and agents duped by forged identity documents.”1

1 https://www.lettingagenttoday.co.uk/breaking-news/2016/2/industry-body-says-court-case-may-weaken-right-to-rent-enforcement

Landlords Do Not Need to Report Illegal Immigrants Under Right to Rent

Published On: February 16, 2016 at 9:31 am

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A landlord or letting agent that conducts immigration checks on prospective tenants do not need to report individuals if they are found to be illegal immigrants, as long as they do not allow that person to rent a property.

The wording of this rule arrives in a new House of Commons briefing paper on the Right to Rent scheme.

Landlords Do Not Need to Report Illegal Immigrants Under Right to Rent

Landlords Do Not Need to Report Illegal Immigrants Under Right to Rent

The scheme, which was rolled out across England on 1st February, currently carries civil penalties. However, the new Immigration Bill seeks to impose criminal penalties with large fines and possible jail sentences for landlords and letting agents.

The Right to Rent scheme is part of a Government plan to deter illegal immigrants.

However, judging by the new ruling, illegal immigrants will be free to go from one landlord or letting agent to another, without any previous checks being made known to those in the lettings industry or the Home Office.

The briefing paper states: “With regards to new tenants, landlords are under no obligation to report an applicant with no right to rent to the Home Office, provided they do not allow them to occupy the property.”

Although the statement relates to landlords, under the scheme, landlords can pass their legal responsibility onto their letting agent if it is confirmed in writing.

The new briefing paper also discusses the pilot Right to Rent scheme in the West Midlands. It says: “14 of 55 letting agents had received complaints from landlords or potential tenants, most frequently mentioning discrimination and delayed tenancy starts due to checks. 52% of respondent landlords say they had concerns about the scheme. The majority of landlords and letting agents saw no benefit to the scheme.”

Yesterday, we reported that a huge 72% of landlords alarmingly do not understand their legal obligations under the Right to Rent scheme.

The Government’s advice on conducting the checks can be found here: https://www.gov.uk/check-tenant-right-to-rent-documents/who-to-check

The new Immigration Bill, currently going through Parliament, introduces four new offences, aimed at “those rogue landlords and agents who deliberately and repeatedly fail to comply with the Right to Rent scheme or fail to evict individuals who they know or have reasonable cause to believe are disqualified from renting as a result of their immigration status”.

The new briefing paper can be found here: http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN07025#fullreport

For all of the latest changes to landlord law and guidance on complying with private rental sector regulations, check back to LandlordNews.co.uk.

Carry out mid-term inspections now, urges AIIC

Published On: February 13, 2016 at 10:01 am

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Landlords are being advised that now is the perfect time to carry out a mid-term inspection of their rental property.

The Association of Independent Inventory Clerks (AIIC) is calling for prompt inspections as many homes could be suffering from mould, generally caused by condensation issues.

Prevention

In order to prevent the problem from escalating, the AIIC urges landlords to carry out these checks on properties in the next few weeks.

‘Mould can be caused by a lack of ventilation or incorrect drying of wet washing-even if just one tenant is living in the property,’ noted Patricia Barber, Chair of the AIIC. ‘It can also be caused by on-going leaks both inside and outside the property, blocked gutters and missing roof tiles.’[1]

If mould is found to be present in a property, the AIIC advises that landlords should ensure that this is not due to external factors, lack of ventilation or any other issue that they can easily solve themselves.

Carry out mid-term inspections now, urges AIIC

Carry out mid-term inspections now, urges AIIC

Instructions

On the other hand, if a build up of mould is being caused by substandard living conditions, the landlord should inform their tenants of actions required in writing.

These should include:

  • reference to ventilating the property
  • wiping down walls and windows
  • using extractor fans
  • not putting damp washing on radiators or heaters
  • rubbing down and mould spores as soon as they are noticed

Barber concluded by saying, ‘if mould is not dealt with on a regular basis the resulting damage could cause both tenant and landlord a lot of money at the end of a tenancy.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/2/landlords-urged-to-carry-out-mid-tenancy-inspections

 

How to Rent Leaflet Updated

Published On: February 2, 2016 at 9:17 am

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How to Rent Leaflet Updated

How to Rent Leaflet Updated

The Department for Communities and Local Government has released an updated version of its How to Rent leaflet to take into account the Right to Rent scheme, which was introduced across England yesterday.

Landlords or their letting agents must give a copy of the leaflet to tenants before the start of a tenancy.

The updated copy informs prospective tenants that landlords and agents must now confirm their immigration status.

It explains that checks must be conducted on all people living in the property that are aged 18 or over.

Landlords and agents must make copies of identification documents and return the originals.

The leaflet states that tenants cannot rent the property if they do not provide evidence of their right to rent and that landlords must not discriminate.

The guide also provides a useful checklist for anyone searching for a rental home, offering advice for every stage of the renting process.

It includes detailed information on the following:

  • What to look out for before renting.
  • Living in a rental property.
  • What happens at the end of a tenancy.
  • What to do if things go wrong.

Tenants are reminded that landlords or agents must provide them with a copy of the How to Rent guide. It can be delivered either through a link or as a hard copy. The leaflet is here: https://www.gov.uk/government/publications/how-to-rent

REMEMBER: Right to Rent Launches on Monday

Published On: January 29, 2016 at 9:24 am

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Categories: Law News

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From Monday (1st February), all landlords and letting agents in England must conduct immigration checks on prospective tenants under the Right to Rent scheme.

The Managing Director of the Association of Residential Letting Agents (ARLA), David Cox, warns that landlords or agents that have already agreed contracts or agree some over the weekend for tenancies starting on or after Monday must comply with the rules.

Although landlords can pass the responsibility onto letting agents, this must be agreed in writing and agents should add a clause into their contracts stating that they will conduct Right to Rent checks.

Cox also reminds that referencing agents cannot undertake the checks: “All they can do is check the documents are genuine. All identification checks need to be done by the letting agent.

“Also, remember it’s not just tenants who need to be checked. It’s all adult occupiers in the property.”1

REMEMBER: Right to Rent Launches on Monday

REMEMBER: Right to Rent Launches on Monday

The checks must be made within 28 days before the start of a new tenancy agreement, meaning that landlords and agents should have already conducted immigration checks if a tenancy is to start on Monday.

Landlords and agents must remember that they are not just legally obliged to check their prospective tenants’ immigration status, but to copy identification documents, such as passports, and keep the copy throughout the tenancy and for one year afterwards.

Those that do not comply with the Right to Rent scheme can be fined up to £3,000 under the Immigration Act 2014.

However, the new Immigration Bill 2015 – which is currently going through the House of Lords – will bring in criminal penalties for landlords and agents.

Several peers have expressed concern.

Conservative peer Lord Howard of Rising believes: “I find it a bit rich that landlords should risk imprisonment for housing an illegal immigrant when it is the Government’s failure in their duty to protect the borders of this country that has resulted in the illegal immigrant being here in the first place.

“I fully understand the difficulties in controlling our borders, which will inevitably lead to errors, but should the person responsible for the error go to prison? If those responsible for allowing illegal immigration should not go to jail, why should a landlord?”

He continues: “It is not unreasonable for landlords to play their part in helping with the problem of illegal immigration, but what they are asked to do should be reasonable and proportionate.

“Landlords being subject to imprisonment for something over which, in practical terms, they can have little or no control is not reasonable.

“I point out that the people most affected by this will be that huge army of small landlords who do not have agents to act for them.”1

Another Conservative peer, Lord Deben, adds: “There is a fundamental concern about this legislation.”

He calls for a delay to Monday’s launch, saying that there should be a pilot scheme, which should be independently evaluated and “shown to have a real effect on illegal immigration”1.

Government advice on the Right to Rent scheme can be found here: https://www.gov.uk/check-tenant-right-to-rent-documents

For all of the latest landlord updates and advice, check back on LandlordNews.co.uk. 

1 http://www.propertyindustryeye.com/important-reminder-all-landlords-and-letting-agents-in-england-to-make-right-to-rent-checks-from-monday/