Posts tagged Advice for Landlords
First-time buyers outnumbering buy-to-let purchasers by three to one – iConn Property Management, Canterbury0
Rosalind Renshaw from Property Industry Eye reveals the turn around with the sales market;
There were 311,700 mortgages issued to first-time buyers last year. While the figure was the same as 2014, the amount borrowed – £46.7bn – was the highest since 2007.
Home movers took out 365,800 loans for house purchase, down fractionally (0.2%) on 2014. Again, though, the amount, at £72.1bn, was the highest since 2007.
Buy-to-let lending rose by both volume (up by 28%) and by value (up 39%), and that too was at its highest since 2007.
Despite the rise in buy-to-let lending, last year first-time buyers outnumbered buy-to-let purchasers with mortgages by three to one.
Only 41% of buy-to-let mortgages were for house purchase, a total of £15.6bn. The bulk of buy-to-let lending was in the form of re-mortgaging – something which buy-to-let borrowers constantly do as they seek out better deals.
John Heron, managing director of Paragon Mortgages, said: “A common accusation levelled at buy-to-let landlords is that they have an unfair advantage over home-buyers.
“The data would suggest this is not the case, with buy-to-let purchases making up only 11.6% of all purchases.
“First-time buyers accounted for three times as many transactions as buy-to-let purchasers.”
Separately, the Office for National Statistics has said that average house prices ended last year at £301,000 in England, £175,000 in Wales, £193,000 in Scotland and £148,000 in Northern Ireland.
The highest average house price in England was in London at £536,000, and the lowest was in the north-east at £155,000.
The ONS puts annual house price inflation last year at 7.3% in England, 1.0% in Wales, -0.2% in Scotland and 1.5% in Northern Ireland.
Another relevant article from ARLA regarding the Government’s Right to Rent Scheme:
The Right to Rent scheme – which reguires landlords or agents to check ID of all prospective adult occupiers – is being rolled out across England from 1 February 2016. Where an adult occupier has a time limited right to remain, landlords and letting agents will need to conduct follow up checks. These need to be made 12 months from the initial check or at the expiry of the individual’s right to be in the UK, whichever is the later.
ARLA have been part of the Landlord panel throughout development of Immigration Act 2014 and Immigration Bill 2015 and have delivered a series of events across England to support letting agents in complying with the legislation.
Right to Rent FAQ
We have worked with Home Office and UK Border Agency to answer the questions that are widely asked by landlords and letting agents.
What happens where I have a US citizen and her family moving to the UK? They are not visiting prior to arrival and need to agree a residential tenancy, ship their furniture and occupy on arrival?
Prior to any agreement for residential tenancy, the landlord or letting agent should conduct Right to Rent checks. In such a scenario as above, if the US citizen had a relevant visit visa and therefore a ‘limited’ right to reside in the UK (specifically in the implementation phased area), their visa will substantiate that. In practice, this will generally mean that the new tenancy agreement is subject to a condition that the Right to Rent checks are satisfied once the US citizen arrives in the UK.
I’m a law abiding agent organising a tenancy for a family moving from Australia in December. I meet all requirements of all legislation that I am asked to comply with. They will arrive at 7pm on a Friday evening. In reality, how do I deal with this?
As above. Prior to any agreement for residential tenancy, specifically in the implementation phased area, the landlord or letting agent should conduct right to rent checks before the prospective tenants are entitled to occupancy and the prospective tenants will be able to substantiate their right to reside through provision of their visas.
How should I carry out a check on someone who wears a headscarf or veil?
Individuals should be asked to show their face to check that it matches their facial image on their documents. Scarves which cover the hair need not be removed. Those conducting the check should offer the opportunity for the prospective tenant to show their face in a private area and/or in the presence of another female.
I have to use sub agents around the country to find my tenants and never see them face to face, how can I comply?
This is a very problematic area as the whole aim of the scheme is for a landlord or a delegated agent to do a quality face to face check. The 2014 Act only allows for a landlord to delegate to an agent. It does not allow for that agent then to delegate the checks and liability to yet another agent. The other alternative is that the first agent sets up a contractual relationship with the second agent in terms of the Right to Rent check. Contact the ARLA Legal Helpline 0330 124 1212 for advice.
What happens with company lets where we don’t know who the occupiers are? We let to the company who allow the current CEO etc to occupy on terms that are generally longer than three months?
In these circumstances, the agreement is with a corporate body and not directly with a ‘tenant’ (albeit the body can be a tenant). The body will have control over who may stay at the property, i.e. a form of licence and they will be the liable party. Employers already conduct right to work checks and are subject to civil penalties if it is found that they are employing illegal workers.
What happens if in Jan 2015 I take over responsibility for a property in the pilot area which is already let? If the landlord hasn’t got evidence of checks to pass to me, do I conduct checks at that point? And if he does pass evidence to me, I still won’t have seen the original myself.
It depends on whether the tenancy (letting) was agreed before or after the implementation date of 1 December. If after the implementation date, it will be the person who granted the residential tenancy who is liable for a penalty where checks were not carried out and an illegal immigrant is found living in the property. That is, the previous landlord in the circumstances set out above. Where the new landlord has no evidence that checks that should have been conducted ever were, they should conduct fresh checks on the sitting tenants/occupants.
What if I have student occupiers from overseas arriving on different dates?
A check needs to be carried out on each adult occupier. If tenants are arriving from abroad at a later date than other occupants, they will need to pass a Right to Rent check before taking up occupancy.
If I acquire a property with occupying tenants and the date that they took up their tenancy with the previous landlord precedes 1st December therefore no checks were needed, do I now need to carry out ID checks because I have acquired the property or do I need to obtain and retain evidence from them that their tenancy started prior to 1 December 2014?
No, you do not need to carry out retrospective checks on tenants. It would be best practice that you would obtain evidence and details of the existing tenancy that has been taken over.
What are the Home Office doing to inform landlords directly?
The Home Office have been working with a wide variety of partners to publicise the requirements of the scheme to landlords and tenants. Within the Minister’s implementation panel meetings ARLA has stressed the importance of raising awareness of the scheme with landlords, householders with lodgers and with tenants. The greater the number of tenants who expect checks, the easier it will be for agents to carry them out.
If I discover a prospective occupier with no right to rent in the UK and know their current address, an address that I am not responsible for, can I be liable for penalty if I do not make a report to the Home Office?
No, you would not be subject to a civil penalty for not making a report to the Home Office against an individual you have not rented to. You would only be liable for a civil penalty if you rent to a tenant where they have no right to rent in the UK (in the implementation phased area) and you knowingly did so.
How does this affect existing Housing Law? What are the implications for existing housing law in reality?
Landlords and lettings agents may wish to consider reviewing and amending the stock of contracts, terms and conditions that they use in day to day business. When updating your landlord Terms of Business don’t forget to include Right to Rent checks.
What if the landlord wants to discriminate against a prospective tenant?
Whether or not a person needs and has permission to stay in the UK and has a right to rent is a matter of fact that can be verified. Only the listed documents should be used to reach a decision. Checks should be performed without regard to race, religion or other protected characteristics or equality.
How do I know that the Home Office reference number that I have been given relates to the person in front of me? Can you give me a copy of the photo ID for the person that is the subject of the Home Office appeal?
The reference number will relate to an individual known to the Home Office and checks will be conducted against the details held on that individual. All positive results will be recorded and monitored so as to identify any instances where we suspect fraudulent activity.
If a guarantor’s visa expires mid tenancy does a check on renewal status still apply?
If the guarantor does not live in the property there is no stipulation from the Landlords Scheme perspective for the landlord to carry out a repeat check when their visa is due to expire. Though of course from a commercial angle they may want to do this – but that is your choice to mitigate against any risk. Of course if the guarantor lived in the property they would be subject to a repeat check just prior to their visa expiring.
Here at iConn we secure our tenancy deposits with the Tenancy Deposit Scheme (TDS). ARLA gives us a brief overview of the various deposit protection services available and the necessary links for more information:
The Tenancy Deposit Scheme (TDS)
The Tenancy Deposit Scheme (TDS) is an Insurance-based scheme run by an organisation called The Dispute Service and was established back in 2003 to provide independent dispute resolution and complaints handling for the lettings industry. It has been running a voluntary tenancy deposit scheme for use by regulated agents since that time and is backed by the three professional bodies for letting agents in the residential property sector, ARLA, NAEA and RICS. For more information visit the website www.tds.gb.com or call 0845 226 7837.
Tenancy Deposit Solutions Ltd (TDSL)
Tenancy Deposit Solutions Ltd (TDSL) is an Insurance-based scheme; it is a new company set up as a partnership between the National Landlords Association and Hamilton Fraser insurance brokers. For more information visit the website www.mydeposits.co.uk
The Deposit Protection Service (DPS)
The Deposit Protection Service (DPS) is the sole Custodial scheme – the running costs of this scheme are funded entirely from the interest earned on all the deposits held by the scheme. The Custodial scheme is run by Computershare who have administered similar schemes for some years in other parts of the world, particularly Australia and New Zealand. For more information visit the website www.depositprotection.com.
Countdown to Right to Rent as Home Office updates Code of Practice – iConn Property Management, Canterbury0
Rosalind Renshaw keeps us all updated with her article for Property Industry Eye;
With landlords and letting agents faced with getting to grips with Right to Rent less than a month away, the Government yesterday updated its statutory Code of Practice.
In doing so, there is still a certain amount of muddle, as the Code suggests there will not be a big bang introduction, but one that will be phased in geographically.
The Code says that the scheme will be implemented “on a phased geographical basis, and will apply to residential tenancy agreements entered on or after the date of implementation for that area”.
However, users are then directed to the Right to Rent website where it says that for tenancies starting on or after February 1, “landlords of properties throughout England should check that someone has the right to rent before letting them a property”.
This morning, a Home Office spokesperson confirmed that the reference in the Code to a phased geographical implementation is both a reference to the pilot scheme in the west midlands, where landlords – or agents acting on their behalf – have had to carry out Right to Rent checks for just over a year and also to the UK-wide roll-out. However, the spokesperson confirmed that Right to Rent goes live throughout the whole of England on February 1.
The Code also clarifies its own legal status, saying: “This is a statutory Code. This means it has been approved by the Secretary of State and laid before Parliament. The Code does not impose any legal duties on landlords, nor is it an authoritative statement of the law; only the courts can provide that.
“However, the Code can be used as evidence in legal proceedings and courts must take account of any part of the Code which may be relevant.
“Home Office officials will also have regard to this Code in administering civil penalties to landlords and their agents under the Immigration Act 2014.”
The Code is here
Yet another useful article courtesy of Property Industry Eye, detailing the various identification documents required for all new tenants:
Under Right to Rent, landlords or their agents should check identity documents for all new tenants, and take copies.
The documents include:
- a UK passport
- a European Economic Area passport or identity card
- a permanent residence card or travel document showing indefinite leave to remain
- a Home Office immigration status document
- a certificate of registration or naturalisation as a British citizen
A full list of documents is available here
Agents should bear in mind that the checks should be carried out on all, not just some, new tenants.
There are codes of practice to be followed, including guidance on avoiding unlawful discrimination which was drawn up with the assistance of the Human Rights Commission.
There are four steps involved in making a Right to Rent check:
- Check which adult tenants will live in the property as their only or main home
- Ask tenants for the original documents that show they have the right to be in the UK
- Check the documents are valid with the tenant present
- Make and keep copies of the documents and record the date you made the check
If a potential tenant has an outstanding immigration application or appeal with the Home Office, you can conduct a check on that person’s ‘right to rent’ via the Landlords Checking Service.
Landlords and agents in the pilot area (Birmingham, Dudley, Sandwell, Walsall and Wolverhampton) should continue to make the checks as they have been doing since December 1, 2014.
NEWS FLASH: Right to Rent being extended across England from February 1 – iConn Property Management, Canterbury0
Rosalind Renshaw from Property Industry Eye reveals all:
The Home Office has announced that from February 1, 2016, the Right to Rent scheme will be extended across England. This means all private landlords, or their agents, in England, including those subletting or taking in lodgers, will have to check new tenants have the right to be in the UK before renting out their property.
The scheme is being extended following an evaluation of the first phase in the West Midlands and has received the continued input of a panel of industry experts, housing and homeless charities and local authorities.
Right to Rent is one part of the government’s ongoing reforms to the immigration system to make it harder for people to live in the UK illegally.
As of February 1, anyone who rents out private property in England will need to see and make a copy of evidence that any new adult tenant has the right to rent in the UK (for example a passport or a biometric residence permit).
The process is simple, according to the Government which says many organisations in the private rented sector already check the immigration status of tenants.
In most cases, it says, checks can be carried out without contacting the Home Office. However, if a tenant has an outstanding immigration application or appeal with the Home Office, landlords can request a Home Office Right to Rent check. A yes or no answer will be provided within two working days.
Landlords who don’t make the checks could face a civil penalty of up to £3,000 per tenant if they are found to be renting out a property to someone who is in the UK illegally.
The Government is also making it easier for landlords to evict illegal migrants as part of the Immigration Bill.
Here Rightmove advise on the dos and don’ts of being a landlord:
Managing a residential lettings property means covering all the bases – a combination of common sense, practical organisation and using a letting agent who signs up to the standards of a professional body such as ARLA (Association of Residential Letting Agents).
Alongside this there are a range of basic do’s and don’ts; ARLA President, Peter Savage, highlights these below.
Notify your mortgage and insurance providers
Speak to your lender about your mortgage terms. Letting a property requires a different form of mortgage to owner-occupation and the same applies to insurance so discuss the change with your provider as buildings and contents may not be covered. It is also worth taking out insurance to protect against a tenant defaulting on rent.
Sign up to Deposit Protection
It has been a legal requirement for Assured Shorthold Tenancy deposits to be protected by a government backed scheme since 2007. For more information, visit our page Deposit Protection or go to the Communities and Local Government website.
The pros and cons of furnishings
A furnished property can be let at a higher monthly rental however if the furnishings are second-hand or ‘leftover’ it can deter prospective tenants. You also need to consider whether everything meets Furniture and Furnishing Regulations.
Pipework, appliances and flues must be maintained in safe condition. Gas appliances should be serviced in accordance with the manufacturer’s instructions. If these are not available it is recommended that they are serviced annually unless advised otherwise by a Gas Safe registered engineer.
There are also regulations governing the installation of electrical equipmentin rental properties – ensure that these are being followed and that any equipment in the property is regularly tested, as you will need to prove your property is safe.
Enlisting a managing agent to oversee the property can help you to overcome all of these hurdles, especially if you are moving away from the area. At the very least work with a lettings agent to find your tenant as this helps to make the process smoother and can ensure that your tenants have undergone checks. Select the agent carefully, always use a professional agent (such as ARLA members) to ensure client money protection thereby securing both your money – and that of your tenants’ – and access to a redress scheme should it be required.
Finally, when making decisions about letting out your home, try to remember that you are handing it over and hopefully creating an income stream. It may have been your home or that of someone else in the family but you now need to allow someone else to make their home in it me for someone else and, hopefully, an income stream for you. The chances are that accidental damage or wear-and-tearwillhappen, and tenantswillcomplain – so try and keep a clear, detached head when dealing with those kinds of issues, and don’t take it personally.
‘Letting Agent Today’ have released this informative article concerning tougher sentencing and guidelines for rogue landlords and agents:
A body representing over 370 local councils in England and Wales wants more powers to control the private rental sector, letting agents and landlords – and says magistrates should have the right to jail the worst offenders.
The Local Government Association claims that all too often the sector has been, in its words, “ripping off tenants” and says that councils’ own licensing schemes have not rooted out rogue landlords who then “have shrugged off paltry fines” when taken to court.
The LGA now wants tougher sentencing guidelines for magistrates and a wider range of penalties. It also says it backs the government’s call for a blacklist of rogue operators – but wants to know how this will be funded.
The association has put forward a series of recommendations including:
– the introduction of sentencing guidelines on housing offences as a priority to ensure consistent and appropriate fines. It also says the Housing Act could be amended to bring in a new range of penalties from a fine up to a community order or custodial sentence;
– a blacklist of persistent offenders would be useful to councils to support the issuing of licenses to landlords and other enforcement work, as long as the administrative burden and cost of compiling a list does not fall on local authorities;
– the ‘fit and proper person’ test for landlords should be strengthened to provide a clear framework to remove the uncertainty for councils and landlords and to provide a robust basis for accepting or refusing a license;
– the government should amend the notice period and compensation arrangements for Article 4 planning powers so that councils can respond effectively to local concerns over concentrations of houses in multiple occupation;
– councils should be given ‘power to direct’ surplus public land to improve the quality of the private rented sector through large scale investment.
With ten working days to go, our Property Manager Paul Lang has a very important message for all Landlords on behalf of ‘Landlord Zone':
As announced recently by Housing Minister Brandon Lewis, from October 2015 Landlords will be required by law to ensure working smoke and carbon monoxide alarms are installed in rental properties in England. The information below is intended to help you understand your responsibilities in relation to the new legislation.
Why have these changes been made?
This legislation has been proposed to address the imbalance between protection levels for private tenants in contrast to residents classed as owner occupiers, or social housing occupants.
It is estimated that the national percentage of all households with a working smoke alarm currently stands at over 90% compared with 83% in rental properties. Although a seven percent difference between the level of protection in rental properties and the national average may seem relatively minor, the numbers are much more compelling when qualified in terms of casualties. Between April 2013 and March 2014, 97 people died and 1900 were injured in domestic fires affecting properties where no smoke alarm was present.
Why do you need to install a CO detector?
The Royal Society for the Prevention of Accidents reports that there are approximately 50 deaths per year and over 1100 hospital admissions annually as a result of carbon monoxide poisoning in the UK. Carbon monoxide (CO) is a tasteless, colourless and odourless gas that is produced by incomplete combustion. A common source of CO in a domestic property would be a faulty appliance such as a boiler.
Statistics show that residents of privately rented accommodation account for a much greater proportion of annual carbon monoxide incidents than could be expected. A report by the Gas Safety Trust into carbon monoxide risks per housing sector showed that the likelihood of an incident in privately rented accommodation was significantly higher than that associated with any other housing sector. According to statistics gathered since 1998 residents of rental properties are on average three times more likely to suffer a CO related incident.
Although landlords are already obliged to have a yearly check carried out on any gas appliances, this alone cannot guarantee protection from carbon monoxide. The installation of a CO detector is quick, easy and cheap, and ensures your tenants are protected from what is often referred to as the ‘silent killer’.
Current advice from the Health and Safety Executive already states that a CO detector should be installed in rental properties, but this has always been down to the discretion of each landlord or letting agent. From October 2015 it will become law that that any high risk room, i.e. those containing a heating appliance, must have a CO detector installed.
What happens if you don’t act on these changes?
Failing to comply with the legislation planned to come into force from the 10th of October 2015 will leave you open to a penalty of up to £5000.
What does this mean for you?
As a private landlord, a professional landlord, or a letting agent, you must consider the effect this legislation will have on your portfolio.
Building regulations already require that properties constructed after June 1992 have a mains powered, interconnected smoke alarm system installed to BS5839-6 2013 Grade D. Therefore, many landlords may find their smoke alarm provision already meets the new requirements.
There has previously been no legislation requiring landlords of properties let to single family units and built prior to 1992 to have smoke alarms. However, these properties will now be subject to the new legislation, meaning smoke alarms will need to be installed by October.
HMO’s are already subject to tighter legislation in accordance to The Housing Act 2004, and the Regulatory Reform (Fire Safety) Order 2005.
It is likely, however, that Landlords of all of the above property types will need to consider their carbon monoxide detector provision in light of the new regulations.
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Another interesting read concerning the question of tenants working from home:
Agents and residential landlords have long been concerned about tenants who work from home.
There has always been a worry that by permitting the operation of a business the landlord will inadvertently create a tenancy under the provisions of the Landlord and Tenant Act 1954 and the tenant will then gain the automatic right of renewal provided by Part II of that Act.
The Government has reacted to this concern by passing Section 35 of the Small Business, Enterprise and Employment Act 2015 [http://www.legislation.gov.uk/ukpga/2015/26/section/35/enacted].
This creates a new definition of a “Home Business Tenancy”.
This is any tenancy under which the tenant is required to occupy the rented property as a home and is also permitted to run a home business from the property.
A home business is defined as any business which can reasonably be run from home but specifically excludes any business for the sale or supply of alcohol.
Where a tenancy is a Home Business Tenancy it will automatically be excluded from the Landlord and Tenant Act 1954 and will count as a tenancy of a single dwelling for the purposes of the Housing Act 1988.
The Housing Act 1988 already permitted some home working as long as the tenancy was substantially for the purpose of providing the tenant with a home. As a result, all forms of home working will now be possible and those tenancies will fall within the Housing Act 1988.
However, that does not mean that everything is now okay.
While there may now be no issue from the landlord’s perspective in relation to home working, there are other parties to consider.
Mortgages, superior leases in flats, and insurance policies all routinely have clauses requiring home use only and prohibiting business use of the property.
Depending on how these are worded, permitting business use by the tenant, even as a home business, may not in fact be an option for landlords.
The changes also do not apply to any tenancy which exists before the new provisions come into force, which they have yet to do, or which are renewals of tenancies which existed before the provisions came into force.
Therefore, while this is a sensible change which is welcome, it will be of no effect unless it is taken up by notoriously conservative mortgage lenders and insurers. Hopefully, the Government will take steps to encourage changes in their terms to allow this in future.
* There is an interview with David Smith on the Property Tribes website in which he spells out some current concerns for the private rented sector.
Source: Rosalind Renshaw, Property Industry Eye: http://www.propertyindustryeye.com/essential-advice-is-it-okay-for-tenants-to-work-from-home/
Rosalind Renshaw from Property Industry Eye reveals all:
The Right to Rent scheme – by which landlords or their agents must check the immigration status of tenants and evict any tenant who does not have right to live in the UK – is likely to go live nationally by next April, and possibly much sooner.
There could be a phased roll-out across England from this autumn onwards.
Landlords – and presumably their agents – who do not comply face fines or prison sentences of up to five years.
The eviction of illegal tenants will be abrupt, and without having to go through court.
It would follow the issuing of a notice by the Home Office when an asylum application fails, confirming that the tenant no longer has the right to rent.
The Government is expected to enact new criminal offences as early as next month. Normally, measures enacted in September come into force the following April. However, in view of the crisis in Calais, sources say there is speculation that ministers could decide to bring implementation sharply forward.
Greg Clark, the communities secretary, said the legislation will also create a blacklist of persistent rogue landlords and letting agents to allow councils to know where to concentrate their enforcement action.
“We are determined to crack down on rogue landlords,” said Clark.
There will also be measures to prevent the letting out of sub-standard properties.
The new measure looks to be controversial.
The pilot scheme in the West Midlands has been running only since December and awaits evaluation.
In the pilot, there is no criminal penalty, with civil sanctions of up to £3,000.
Also in the pilot, landlords are able to assign Right to Rent responsibilities to their agents, and it is thought that this same system will continue in the national scheme.
The new clampdown is already raising fears that landlords and agents will simply discriminate against certain types of prospective tenants – including those with a right to live in the UK.
The Joint Council for the Welfare of Immigrants said that the pilot has shown serious shortcomings, with British people who have foreign accents finding it difficult to find somewhere to rent.
Lawyer and policy director of the Residential Landlords Asociation David Smith told the BBC’s World at One that there was evidence that landlords in the pilot were reluctant to let their properties to anyone without a valid passport.
He said: “This means that huge segments of the population, including genuine UK national who do not have passports – of whom there are many – are being excluded.”
There are also accusations that the Government is guilty of a knee-jerk reaction to the Calais crisis.
However, David Cox, managing director of ARLA, said: “ARLA believes that the measures announced by the Government today are a good first step and we welcome the proposals in principle.
“The plans will help to weed out the minority of rogue landlords who exploit vulnerable immigrants for their own financial gain and, with the introduction of a new five year imprisonment penalty, will help to deter other such unscrupulous individuals from entering the private rented sector.
“The proposals also build upon the Right to Rent checks as imposed by the Immigration Act 2014.
“We will be organising training sessions for our members to ensure they are fully prepared and understand the new rules and we urge all letting agents to ensure they are ready for the impending roll out.”
What will rising interest rates mean for the housing market? – iConn Property Management, Canterbury0
Another interesting read from Property Industry Eye:
So what will happen when interest rates rise, as Bank of England Governor Mark Carney has suggested, at around the turn of the year?
Well, putting aside that Carney has said this sort of thing before and it hasn’t happened, the effect could be imminent woe, death and destruction – or not.
The Guardian is fairly confident that the end of the world is nigh.
The housing market could collapse and “it is estate agents who have most to fear”, it says.
The paper reasons that it won’t be so much about mortgages and affordability, but about confidence.
It also predicts that lenders won’t wait until base rates rise early next year, but will start repricing their mortgages “almost immediately”.
As for borrowers, one third will struggle if interest rates rise, consumer spending will fall and there’ll be repossessions.
It all sounds like a terrifying vision of doomsday about which all of us should do something very quickly indeed – such as hand back our keys if we’re borrowers, or go into recession survival mode if we’re agents.
But here’s a mortgage broker with a more reassuring view.
Simon Tyler said rates may not rise for all borrowers, even if the base rate does increase.
“If we see a rate rise next year, those on tracker loans will be hit straight away but many other people may not be affected – at least initially.
“Competition in the mortgage sector is so intense, with so many new entrants vying for market share, that we may find that the first rate rise is hardly passed on at all by many lenders.
“Remember, most lenders’ standard variable rates are already at over 4%, which is miles above the level of the base rate at just 0.5%.
“So we may not see much movement at all, even after a rate rise.”
Long-term, Tyler is not quite so sanguine: “However, if a rate hike is passed on it is going to hurt. Household debt is so high, with so many people stretching to repay their mortgages and other credit, that any rate hike is going to be very painful and have a disproportionate impact.
“Remember, wages have barely been rising for years but many people have stretched to get on the housing ladder, often only with the aid of government assistance.
“These people may find a rate hike hard to cope with.
“House prices are unlikely to be hit very hard given that demand is still so high, but it could dampen the market a little and slow price growth in some areas.
“First-time buyers may find some areas where prices drop back a little which will help them, but at the same time they are likely to find that higher rates mean they won’t qualify for the mortgage that they want.
“As rates begin to rise you could even see a rush of people coming to buy because they fear they will miss the boat if rates increase too far, and that could even push house prices up in the short term.
“In short, raising rates will have to be a very delicate process in order not to derail the economic recovery which is actually paper thin. If they rise too fast too soon it will take away the feel good effect that people are starting to get with rising wages and push the economy backwards. Business borrowing could be hit and that would hit employment.
“The fact is that any big increase in rates is still some years away and competition among lenders should ensure that there are fantastic value deals still around for several years from now.”
And what did Carney actually say? That rate rises will be “limited and gradual” and “proceed slowly” rising to a “level in the medium terms that is perhaps half as high as historic averages”.
We suspect that most estate agents will be telling the public: “There has never been a better time to sell – or buy.”
Rightmove have published this little article giving you a few tips on protecting your property against theft during the summer months;
According to Halifax Home Insurance, opportunistic thieves ramp up their activity during spring and summer, resulting in a 10% increase in domestic burglaries and a 40% increase in outdoor thefts. One of the reasons for this is because more of us leave windows and doors open while we are out in the garden, or while we nip to the park to enjoy the sunshine.
There is also a marked increase in thefts due to larger numbers of us going on holiday and leaving our houses empty, unsecure and unguarded. We also start bringing out valuables such as bicycles and lawn furniture, and leave them outside, which then tempts would-be criminals.
To protect your property against thieves this summer, the home security specialists at Yale recommend that you try to avoid leaving expensive outdoor equipment such as barbeques lying around your garden. Wherever possible, ensure they are kept in a shed or garage, secured with a sturdy weatherproof padlock when not in use.
Love your shed
Many of us believe our garden shed contains nothing but old junk, but astonishingly, a quarter of people with a shed said it would cost more than £750 to replace the items stored in them, according to a YouGov survey commissioned by Yale.
Even more surprising then, is that the research showed that 1 in 6 people with sheds do not bother to secure them, even though it may contain high value items such as bicycles, lawnmowers and power tools.
It’s worth securing these types of items using additional padlocks or anchors and cables, which can be looped through bike wheels or lawnmower handles to provide an extra level of security if an intruder does manage to gain entry.
Bicycles are a great way to get around during the summer months. They are convenient and great exercise, but unfortunately thieves are quite fond of them too! In fact, according to the Crime in England and Wales Survey, performed by The Home Office, 53% of bicycles are stolen from a semi-private area such as a garden, garage or shed.
So to avoid becoming a victim of cycle theft always lock your bicycle to something immovable, even when it is at home in your garage or shed. Fix your bicycle to an object that it can’t be lifted over, and something that cannot be broken, cut or removed. For maximum protection use two locks of different types (a D-lock and robust chain and padlock is ideal).
Keep an eye out
The majority of garden thefts occur at night, as opportunistic burglars operate under the cover of darkness. To deter shady burglars, invest in good security lights at the front, back and side of your property.
For added protection, CCTV systems allow you to keep a careful eye on your home and its boundaries while you are away. Recorded footage can also be stored on a PC, or supplied to the police in the event of a break-in.
These few simple steps can help you to enjoy the summer months, safe in the knowledge that your home and valued possessions have been left protected.
Another relevant article courtesy of Property Industry Eye;
A new online tool has been launched, aimed at making rented homes safe and legally compliant.
The ‘safe and secure’ toolkit, which features a clickable house icon, has been launched by the Residential Landlords Association.
Advice includes how best to ensure gas, electrical and fire safety, as well as information on how to prevent damp and mould, improving the energy efficiency of a property and how to prevent trips and falls around the house.
Each part of the house, when clicked on, provides details of the legal requirements for a landlord and information on the likely cost of fitting safety features such as window safety locks, carbon monoxide detectors, and fire alarms.
It also includes a simple, easy to understand checklist about features a landlord should check regularly.
According to the most recent English Housing Survey, 16% of private rented sector properties have at least one hazard that means the home fails the minimum safety standards expected of them.
Alan Ward, chairman of the RLA, said: “Providing a safe, legal and secure home should be the first duty of any landlord to their tenant.
“Whilst the vast majority of homes to rent meet the legal standards required of them, we must do all we can to support landlords to address hazards quickly when they arise.
“The reality is that there are a large number of legal requirements expected of rented homes.
“The problem is not a lack of law but of enforcing these requirements and ensuring landlords understand the complexities of renting homes out.”
The toolkit is here
Property Industry Eye explains why traditional agents are the best:
A property search agent has strongly advised people against trying to sell their own homes via one of the ‘passive intermediary’ sites on the internet.
David Brooke-Smith, of Stacks Property Search, also said that while online agents offer a better chance of success, there is still potential for failure.
He said: “Traditional agents tend to charge somewhere between 1% and 2.5% of the selling price, plus marketing costs, plus VAT. So it’s no great surprise that people are tempted to do the job themselves.
“A plethora of TV programmes has produced a nation of property experts, and there is now a range of options available to the would-be DIY seller. But I would encourage caution.
“If you are in a position to know the true ‘value’ of your property, if you know how to present it at its best, if you have a significant level of IT and SEO skills, if you have strong negotiating and diplomatic skills, if you have endless patience, and if you’re prepared to put in full-time effort and place your life on hold for several months, you may stand a chance.
“In our experience, those that try to go down the DIY route often find it’s simply not working and revert to more traditional methods.
“The greater chance of success comes from using an online agent that offers help with photography, floor plans, and crucially, listing on the main portals such as Rightmove and Zoopla.
“But even with all this help, there’s still a great deal of potential for failure.
“Valuing is the first hurdle to overcome. Vendors may find it difficult to recognise the weaknesses in their own property and will consequently overvalue and discourage enquiries.
“The owner will of course be required to conduct viewings, and whether or not this is a process they embrace, they will have to fall in with potential buyers’ timings, and adopt a non-emotional technique, not always easy when it’s the family home.
“If a vendor should succeed in overcoming these hurdles, potential failure still lurks at the negotiating and conveyancing stage.
“A good estate agent does a great deal of behind-the-scenes work holding a deal together and ensuring it reaches a successful conclusion. It’s often difficult to maintain a professional approach to tense negotiations, and sentiment can be the greatest saboteur of a property transaction.
“The problem with this journey, apart from not achieving a sale, is that you will have incurred substantial non-refundable expenses.
“Selling online requires upfront fees, so if you revert to selling through an agent, you will be duplicating a fair proportion of the cost.”
Source: Property Industry Eye http://www.propertyindustryeye.com/use-a-traditional-agent-property-search-man-tells-sellers/
Here Endsleigh offer some pointers with regards to tenant landlord relationships:
In our recent research into the private rented sector, we discovered that more than a third of UK landlords have given their tenant a welcome or farewell gift. Having surveyed more than 2,600 UK landlords and tenants, we found that 34% have presented their tenant with a gift such as a bottle of wine, while 30% of tenants have received an act of kindness, such as help with DIY or a break from paying rent.
The research is part of our 2015 ‘Better Relations’ campaign, which aims to encourage stress-free lettings for both tenants and landlords. So what sorts of gifts have been given by landlords?
- Sarah, a tenant in Berkshire: “My landlord offered to decorate when we were expecting our baby.”
- Anna, a landlord in Kent: “I provided starter kits of cutlery, pots, glasses, mugs, tea and biscuits and some cleaning things.”
- Derek, a landlord in Perth and Kinross: “I collected the tenant from the airport when they flew in from Australia.”
- Wanda, a landlord in Fife: “I put credit on the electricity meter to get the new tenants started when they first moved in.”
- Tom, a landlord in Oxfordshire: “I gave my tenant a rent holiday during a period of unemployment.”
- Alison, a tenant in London: “My landlord gave us a bottle of wine when we moved in, as well as a roll of toilet paper in the bathroom.”
- Pam, a tenant in Cumbria: “My landlord paid for half of our Sky connection.”
The results of the survey demonstrate that the giving of gifts has an impact on the relationship between a landlord and a tenant. In fact, nearly three quarters of tenants who had received an act of kindness from their landlord said this positively changed their perception of them. A positive relationship seems to have an impact on the length of tenancy too; 70% of tenants who have received an act of kindness stay in their property for 24 months or more, compared to just 53% who haven’t. For more information on how you can foster a better relationship with your tenant, which can lead to longer, happier tenancies, keep your eyes peeled for useful tips and insight on Talk Lettings.
Source: Endsleigh Insurance Services Ltd https://www.endsleigh.co.uk/talk-lettings/better-relations/2015-mar/how-to-build-a-better-relationship-with-your-tenant/
Gov.uk have posted an article regarding potential changes to installing smoke and carbon monoxide alarms within their rented properties:
Landlords will be required by law to install working smoke and carbon monoxide alarms in their properties, under measures announced by Housing Minister Brandon Lewis today (11 March 2015).
The move will help prevent up to 26 deaths and 670 injuries a year.
The measure is expected to take effect from October 2015, and comes with strong support after a consultation on property condition in the private rented sector.
England’s 46 fire and rescue authorities are expected to support private landlords in their own areas to meet their new responsibilities with the provision of free alarms, with grant funding from government.
This is part of wider government moves to ensure there are sufficient measures in place to protect public safety, while at the same time avoiding regulation which would push up rents and restrict the supply of homes, limiting choice for tenants.
Housing Minister Brandon Lewis said:
In 1988 just 8% of homes had a smoke alarm installed – now it’s over 90%.
The vast majority of landlords offer a good service and have installed smoke alarms in their homes, but I’m changing the law to ensure every tenant can be given this important protection.
But with working smoke alarms providing the vital seconds needed to escape a fire, I urge all tenants to make sure they regularly test their alarms to ensure they work when it counts. Testing regularly remains the tenant’s responsibility.
Communities Minister Stephen Williams said:
We’re determined to create a bigger, better and safer private rented sector – a key part of that is to ensure the safety of tenants with fire prevention and carbon monoxide warning.
People are at least 4 times more likely to die in a fire in the home if there’s no working smoke alarm.
That’s why we are proposing changes to the law that would require landlords to install working smoke alarms in their properties so tenants can give their families and those they care about a better chance of escaping a fire.
Ensuring the safety of tenants
Other measures to support the private rented sector include investing £1 billion in building newly-built homes specifically for private rent, giving tenants support against rogue landlords and publishing a How to rent guide so tenants and landlords alike are aware of their rights and responsibilities.
The proposed changes to the law would require landlords to install smoke alarms on every floor of their property, and test them at the start of every tenancy.
Landlords would also need to install carbon monoxide alarms in high risk rooms – such as those where a solid fuel heating system is installed.
Those who fail to install smoke and carbon monoxide alarms would face sanctions and could face up to a £5,000 civil penalty.
This would bring private rented properties into line with existing building regulations that already require newly-built homes to have hard-wired smoke alarms installed.
And it’s in line with other measures the government has taken to improve standards in the private rented sector, without wrapping the industry up in red tape.
New regulations will be laid in Parliament to require landlords to install smoke and carbon monoxide alarms in their properties, and are expected to come into force, subject to Parliamentary approval, on 10 October 2015.
The allocation of funding to fire and rescue authorities to offer free smoke and carbon monoxide alarms to local landlords will be announced shortly.
The government’s Fire Kills campaign will be encouraging people to test their smoke alarms when they change their clocks to British Summer Time. The ‘Tick Tock Test’ campaign will run on radio, online and in the press from 16 to 29 March 2015.
See Fire Minister Penny Mourdant’s speech to the Local Government Association fire conference.
The office of iConn will be closed for the May Bank Holiday.
The office will be closed on Monday 4th May 2015 but will re-open on Tuesday 5th May 2015 from 9am.
As usual we have arranged an emergency call out service for all our managed properties. Please note; for tenant find properties, please contact your Landlord directly as normal.
For managed properties; faults should be reported as follows:
For Plumbing, Heating/ Electrics and Security faults please contact One Call Property Services on 07515369200
For locks and keys please contact Acme Locks on 01227 785551
Please also refer to our website for emergency details under the Tenant/Student Tab for when
the office is closed. http://www.iconnproperties.co.uk./emergency_contact.php
Please note that if you have a British Gas Homecare service contract in place, you should call them in
the first instance on 0800 365100
Agent shut down whilst fears are aired regarding missing money – iConn Property Management, Canterbury0
Here is an interesting article written by Rosalind Renshaw on behalf of Property Industry Eye. This article gives you all the more reasons for using an ARLA qualified Letting agent like iConn Property Management. We are an affiliated agent with the relevant and essential ‘client money protection Insurance’ in place, providing our Landlords and Tenants peace of mind;
Landlords and tenants are feared to have lost thousands of pounds after the sudden closure of a property firm.
Sweet Property Services has shut down with a Notice of Forfeiture on the door saying that the landlord of the building in High Street, Rochester, Kent, has re-entered the premises.
As a consequence, says the notice, the lease has been forfeited and the premises secured. The firm is said to have entered liquidation, although details are unclear.
Landlords have told their local paper that rent has not been passed on, with concerns that tenants’ deposits may not have been protected.
A spokesperson with The Deposit Protection Service told Eye: “I can confirm that Sweet Property Service have never protected a deposit with The Deposit Protection Service.”
The Property Ombudsman confirmed to Eye it has received a number of complaints about the agency, run by Richard Sweet and which was more recently known as My Sweet Property.
A TPO spokesperson said: “The TPO has been informed that the agent has gone out of business and is in possession of the administrator details. It is assisting complainants in progressing their complaints.”
Had deposits been lodged with the Deposit Protection Service they would have been safe.
The spokesperson said: “Problems such as insolvency proceedings affecting letting agencies are relatively rare, but we of course sympathise with anyone experiencing complications.
“We can reassure both tenants and landlords that our custodial scheme offers the best protection against issues arising from insolvency proceedings. With the funds directly held by the DPS as an independent custodian, the deposit remains protected, notwithstanding such proceedings.
“Under both our insured and custodial schemes deposits remain protected and responsibility for these deposits can be transferred to the appropriate party.
“As a result, a tenant’s access to a deposit that he or she is entitled to at the end of a tenancy is unaffected.”
According to the local paper, one tenant said she had been trying to contact Mr Sweet and his daughter Courteney for over a month without success.
She said: “I, like other tenants, have been emailing these agents for confirmation that my deposit has been lodged with the Deposit Protection Scheme (DPS) and to question why some of my rent has not been paid to my landlord and about the sudden name change.
“Every time I was answered with ‘everything is fine and the paperwork is in the post’.
“It now looks as though Sweet is offering a new online service and this needs to be looked into. Firms should not simply be able to set up shop again.”
Her landlord claims he is £5,000 out of pocket. David Newton said the property had been rented out because his father had dementia and had gone into care: he had needed to rent out the family home to pay for his care.
Mr Newton said: “I have been left distraught and am owed at least four months’ rent.”
Source: Property Industry Eye http://www.propertyindustryeye.com/fears-over-missing-money-as-yet-another-agent-shuts-down/
Rosalind Renshaw from Property Industry Eye highlights Labours intentions regarding letting agent fees together with longer tenancy terms…..
Labour’s manifesto, published yesterday, has confirmed that the party will ban letting agent fees if it wins the election.
The manifesto also confirms that it will legislate to make three-year tenancies the norm and introduce rent caps.
The manifesto says: “For the 11 million people who rent privately, we will legislate to make three-year tenancies the norm, with a ceiling on excessive rent rises.
“A ban on unfair letting agent fees will save renters over £600.
“We will drive standards up by creasing a national register of private landlords.”
The manifesto also says that Labour will build at least 200,000 homes a year by 2020. Under Labour, a “new generation of garden cities” would also be built.
In a further confirmation of plans previously announced, the Labour manifesto says a mansion tax will be introduced to help fund improvements to the NHS.
Meanwhile, Eye’s story yesterday alerting agents in Walthamstow, London, that Stella Creasy and her supporters were due to embark on a mystery shopping exercise of their fees was highlighted by her on Twitter.
She tweeted: “amazing @alexhilton – letting agents upset walthamstow campaigners wanted to see if transparent about their fees….#saysitall”
Thirteen minutes later, she tweeted: “Want to know why Walthamstow needs Labour Govt? Local letting agents upset asking about fees – lab would ban them!”
Here at iConn we’re proud to say that we are an ARLA agent. Here ARLA explain the importance of staying gas safe in this useful article:
What set’s ARLA agents apart from the competition is their high standards, professionalism and credibility. Gas Safety is a crucial thing for agents and landlords to get right if you’re to protect your tenants, avoid a PR disaster and worse, a potentially fatal accident.
Annual gas safety checks need to be carried out every 12 months by a Gas Safe registered engineer. Landlords or their agent must keep a record of the safety check for two years and issue a copy to each tenant within 28 days of the check being completed and issue a copy to any new tenants before they move in.
As part of their contracts with letting agents, many landlords will assign responsibility to their agent to fulfil the gas safety obligations of the contract, so it’s vitally important that you have a good grasp on when each of your properties anniversary falls. It is a criminal offence if you don’t comply with your legal duties under the Gas Safety (Installation and Use) Regulations 1998 and the HSE can issue a formal caution or decide to prosecute.
Help is here
One way for agents and landlords to dramatically minimise the risk of forgetting to schedule a gas safety visit or boiler check is to sign up to Gas Safe Register’s free reminder service. They will they email or text you when it’s time to get your appliances checked. This is a FREE service for landlords, agents or tenants to service their boilers on a yearly basis.
Gas Safe even provide a service for lettings agents or landlords with multiple properties, which allows you to do bulk uploads of properties. Once you’ve uploaded them once with basic details including the month which a check is due, they will do the rest! All you need to worry about is choosing a Gas Safe registered engineer of your choice when the time comes to complete the work!
So what are you waiting for – STAY SAFE and take a load of your mind and make – get proactive and !
If you’re not sure of your obligations under the Gas Safety (Installation and Use) Regulations 1998, HSE has free leaflets and a free Gas Safety Advice Line offering telephone help – 0800 300 363.
They also offer some great advice here: http://www.hse.gov.uk/gas/domestic/faqtenant.htm
See link for the gas map tool and reminder service:- http://www.staygassafe.co.uk
Congratulations to Amy in lettings for passing her fourth and final unit in NFOPP Technical Award in Residential Letting and Property Management.
Amy has now obtained the industry recognised ARLA membership, meaning that five members of staff here at iConn are now ARLA qualified.
Congratulations to Nadine in lettings for passing her fourth and final unit in NFOPP Technical Award in Residential Letting and Property Management, and of course to Paul in maintenance for passing unit one!
Nadine has now obtained the industry recognised ARLA membership, meaning that four members of staff here at iConn are now ARLA qualified.
Rosalind Renshaw, on behalf of Property Industry Eye, writes about this interesting case that will see changes being made in property inspections by agents on behalf of landords:
An important new case has major implications for letting agents who manage properties and for landlords.
It may also have implications for insurance.
In the case of Edwards v Kumarasamy, the tenant tripped on a path outside the block of flats where he lived on the second floor, injuring his knee.
The landlord did not own the path and did not own the block. However, the landlord did own a flat within the block and the path was the essential means of access to the block.
Until now, it has always been assumed that repairing obligations only apply to what the landlord actually rents out to the tenant, and also that the landlord cannot be held liable if they have not been notified of the need for a repair.
However, in this case, the tenant took a disrepair claim under Section 111 of the Landlord and Tenant Act 1985 and, at the Court of Appeal, won his case.
Solicitor David Smith, of Anthony Gold, says this is “a big deal” for agents and landlords, and will have “serious consequences”.
Smith warns that as a result of the case, any landlord can now be sued for disrepair to areas serving their property, irrespective of ownership.
It also means that agents doing property inspections should look not just at the property itself but also at areas over which the landlord has rights, such as paths and drives.
There is, says Smith, no obligation on the tenant to report disrepair, so it is up to the landlord or agent to identify it and resolve it.
This particular case also raises another question, although one not dealt with by the Court of Appeal: paving stones that are merely uneven, rather than being in a state of disrepair.
The full case is reported here
David Smith’s commentary is here
Rightmove have printed this relevant article taken from The Muney Advice Service, reminding Landlords to complete their tax return before the end of the month:
There’s more to being a landlord than collecting rental payments and deposits. Paying your tax is one job you really need to be on top of – and the clock is ticking.
You must complete the online tax return by 31 January (if you’ve not paid in another way by 31 October 2014) having registered for self-assessment by 5 October.
All landlords need to keep HMRC in the loop
You must inform HMRC as soon as you start renting out a property, even if you’ve not yet made any income from it. Once you have earned £2,500 in rental income, you may be liable to pay tax on it. Landlords whose properties generate more than this amount in rent each year must complete a Self-Assessment Tax Return.
How you can reduce or avoid a tax bill
The amount of tax you pay depends on the type of property you are renting out and your personal circumstances. The tax obligations are different for each of the three categories – residential properties, furnished holiday lets and commercial property.
As a buy-to-let landlord you – or your company – pay tax on any profit you make from renting your property to residential tenants. This means you don’t pay income tax on what are known as allowable expenses – and there are plenty of these to get your teeth into. For example, you can claim back letting agents and accountant’s fees. Maintenance and repairs are also covered, as are buildings and contents insurance premiums.
Keep a record of your property-related outgoings
There are plenty of elements to renting out property that you need to keep a record of, including Council Tax bills, any utility bills you pay on the rented property and other direct costs like advertising and phone calls to tenants. Even so, it’s probably best to seek professional advice when calculating tax obligations and allowance expenses. The HMRC Self-Assessment helpline can be reached on 0300 200 3310 if required.
What you can’t claim for
You can’t claim for capital expenses such as buying the place or renovating it, but can lodge a claim for wear and tear. Be aware through that excessive claims will be scrutinised, so don’t think the tax office will automatically claim for the cost of a new bathroom suite or a plush kitchen. HMRC allows you to claim up to 10 per cent of the net rent as a wear and tear allowance if you provide a furnished flat or house, but make sure you have the receipts to hand.
Cheap rentals and HMRC
Even if you don’t earn £2,500 a year from your tenants – after considering all the costs you can claim to reduce tax – you still need to keep HMRC in the picture. They will be able to help ensure you tick all the right boxes as a landlord. You can also visit the Money Advice Service’s guide on your responsibilities as a buy to let landlord for more information.
Source: Rightmove, on behalf of Money Advice Service http://www.rightmove.co.uk/news/articles/buy-to-let-landlord-dont-forget-your-january-tax-return
As usual we have arranged an emergency call-out service for the Christmas & New Year period. The service will operate between the following:
1pm Wednesday 24th December to
9am Saturday 27th December
1pm Wednesday 31st December to
9am Friday 2nd January
During this period, faults should be reported as follows:
Plumbing / Gas Heating / Electrics /Security – One Call 07515369200
Please also refer to our website for emergency details under the Tenant/Student Tab for when the office is closed.
Please note that if you have a British Gas Homecare service contract in place, you should call them in the first instance. 0800 365100
Best wishes from everyone at iConn Property Management
Our offices will be closed from 1pm for a staff training afternoon tomorrow; if you have any emergencies please contact One Call Property Services on 07515369200.
For more information visit our website: http://www.iconnproperties.co.uk/emergency_contact.php