Dos and don’ts of being a landlord

Author: JoeOT - Date: 9th October 2015

Dosanddonts

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.

Gas Safety

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.

Electrical Equipment

There are also regulations governing the installation of electrical equipment in 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.

Hands-on

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.

Step back

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.


Mortgage Product of the Week

Author: JoeOT - Date: 5th October 2015

First Time Buyer First Time Landlord purchase:-

NatWest, 2yr Fixed, 2.29%, £1995 arrangement fee, 75% loan to value,

USP’s:- One of the few options available to First Time Buyers buying a Buy to Let

Please see below criteria Mortgage

Tip of the Week

We are happy to consider buy-to-let mortgage applications from customers who are first-time buyers or have no existing residential mortgage.

Applicants who do not have a mortgage on a residential property – will need to comply first with the residential affordability (proof of income will be required).

Rental cover calculation is 125% x 5.5% up to 75% LTV on established properties and 65% LTV on new build. The customer must have a minimum income of £25,000 (sole applicant).


Mortgage Product of the week

Author: JoeOT - Date: 2nd October 2015

Mortgage Product of the Week

Clydesdale Bank – 90% loan to value:-

2yr Fixed 2.89%, £999 arrangement fee

Residential purchase only

USPs:-

Will accept Retained Profits for self employed Directors of Limited Companies

Manual credit checks NOT computer says no credit score

 

Mortgage Tip of the Week

With international living commonplace, you may have several customers who are foreign nationals residing in the UK and wanting to buy a property here.

- If the applicant has permanent right to reside in the UK or has a Tier 1 visa, they can borrow up to a maximum 90% LTV

- If the applicant does not have permanent right to reside or a Tier 1 visa, LTV is restricted to a maximum of 85%

- For joint applications, where only one party has the right to reside, we can treat as if both applicants have residency rights o We only require 6 months’ track record of living and working in the UK and not 3 year’s address history as might be presumed

 

Private Client Finance Ltd is an appointed representative of Sesame Ltd which is authorised and regulated by the Financial Conduct Authority. Registered Office: Ramillies House, 2 Ramillies Street, London. W1F 7LN Registered in England No.8385500


Top questions to ask yourself when considering buy-to-let investment

Author: JoeOT - Date: 30th September 2015

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The world of buy-to-let can be both confusing and overwhelming.

If you are thinking of purchasing a buy-to-let property, here are a few thoughts and helpful resources to make the process less daunting…..

Motivations

If you are thinking about investing in property it is important to think about why you are doing it, and most importantly, whether you want a regular monthly income, now or in the future.

If now, it is important to know what sort of yield a property might produce. This is calculated by dividing the annual rent you will receive by the value of the property.

For example for a property worth £100,000 that you let for £5,000 per year the gross yield would be 5%.

If however, you’re looking for an increase in the value of your investment over the longer term, ensure you keep an eye on how general house prices change over time. In addition to this, ask yourself whether there are any demographic factors or investment plans for the area which may have an impact on values.

Do your research

Tap into a local agent’s expertise on their local market and ask:

•What is happening in your area?

•What types of property are popular with tenants?

•What is rental demand like and how quickly are properties being let?

•What is the average rent?

By gathering answers to all of these questions you will gain a strong indication of the types of returns you can expect.

You should also ask whether there any plans which give the potential for future house price inflation, for example new transport links, infrastructure or large employers moving to an area which may impact on desirability as somewhere to live.

Types of property

What type of property are you thinking of buying?

Are you planning on buying a property that needs some work? If so will you be doing the work or employing someone to do it?

Renovation or refurbishment projects tend to be popular as there is the potential to add value to the property by doing some work at the outset. Auctions can be a good source for this type of property.

Alternatively, many people who are pressed for time opt for a new build property as they are ready to move into, relatively maintenance free and come with a 10 year warranty.

Who will rent your property?

Are you looking to rent to a group of students, or professionals or perhaps target the holiday let market?

Again talking to agents will help you understand what these tenants expect in terms of property and whether you are better letting furnished or unfurnished.

We hope this quick guide is useful and wish you luck in your search for a property.


Supply of houses for rent drops but demand increases

Author: JoeOT - Date: 22nd September 2015

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The mismatch between supply and demand in the rental market was particularly felt in London, says ARLA. 

Demand for properties for rent continued to increase in August, but the rate at which rents are rising slowed, research showed today.

Letting agents reported having an average of 36 potential tenants on their books during the month, up from 35 in July.

But the number of homes available to rent fell back following a spike the previous month, according to the Association of Residential Letting Agents (ARLA).

Agents said they were managing a total of 178 properties per branch in August, down from 189 in July.

The mismatch between supply and demand was particularly acute in London, where the stock of properties registered per branch dwindled to 110, compared with 117 in July.

But on a brighter note, there was a fall in the number of letting agents who reported rent increases in August for the first time this year.

Only a third of agents said rents were continuing to rise, down from 37 per cent in July and the lowest level since April.

Demand for properties for rent is on the rise. David Cox, managing director of ARLA, said: “Our findings this month are good news for the majority of tenants, as less are experiencing rent hikes.

“However, a third of agents are still seeing landlords pushing rents up, which reflects the sorry state of affairs in the market.

“With increasing pressure on the dwindling supply of housing, and the number of house hunters growing, rent increases are unfortunately very common - as one in three tenants are experiencing.”

He warned that although there had been a fall in the number of agents reporting rent rises during August, the trend was likely to be reversed in the month ahead, with landlords hiking rents again.

Rent increases were slowest in the north west, where just 12 per cent of agents reported an increase. But not all regions followed this trend, with 42 per cent of agents in the south west saying the cost of letting a property was continuing to rise, followed by 36 per cent in Wales, more than triple the 11 per cent who saw rises in July.

Today’s research is in line with figures from the Royal Institution of Chartered Surveyors (RICS), which said demand from potential tenants had increased for the eighth consecutive month in August, outstripping a modest rise in the number of new properties that were available to rent.

The shortage of supply led a third of agents to predict rents would rise in the coming three months.

A combination of high house prices, the large deposits needed to get the most competitive mortgage rates and a shortage of homes for sale is thought to be behind the ongoing increase in demand for rental properties.


Mortgage lending hits eight-year high

Author: JoeOT - Date: 22nd September 2015

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Up to £20bn of mortgages was advanced during August as the housing market continued to improve, according to the CML.

Mortgage lending hit an eight-year high in August as the housing market continued to recover, figures showed today.

A total of £20bn was advanced during the month, the highest total for August since 2007, and 12 per cent above the amount lent in the same month of 2014, according to the Council of Mortgage Lenders (CML).

But there was a slight dip in lending levels compared with the previous month, when £21.7bn was advanced, as the market experienced its traditional August lull.

Bob Pannell, CML chief economist, said: “Mortgage lending is currently enjoying its best spell since 2008, on the back of a pick-up in house purchase and remortgage activity over the summer months.

“August’s lending of £20bn marks the third month in a row of strong year-on-year growth and is the highest August figure since 2007.

“We expect further modest growth for the rest of the year, although affordability pressures are likely to limit gains for first-time buyers and home movers.”

The mortgage market is currently enjoying a boost from the return of both buyers and existing homeowners who are remortgaging.

Many potential buyers, who sat on their hands due to the uncertainty caused in the run up to May’s General Election, have since returned to the market.

At the same time, there has been a surge in the number of people remortgaging following warnings by Bank of England Governor Mark Carney that interest rates could start rising at the turn of the year.

Figures released by the CML earlier in the week showed a 34 per cent year-on-year jump in the number of people switching loans as homeowners look to lock into the current competitive rates on offer.

The group pointed out that remortgage and buy-to-let lending was improving more strongly than advances to people buying their own home.

A recovery in sales levels is being constrained by a shortage of homes on the market, which is continuing to put upward pressure on prices.

The Royal Institution of Chartered Surveyors (RICS) recently warned that while new buyer enquiries increased for the fifth month in a row in August, the number of homes being put up for sale remained at record low levels.

Affordability pressures are also likely to be having an impact on transaction volumes.

The average UK home currently costs 5.34 times average earnings, according to mortgage lender Halifax.

This is the highest level since March 2008, shortly after the housing market correction began.


Top 5 Colourful Kitchen Ideas

Author: JoeOT - Date: 16th September 2015

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Kitchens typically come in bright whites, earthy browns and classic creams, but for those looking for a more adventurous design our top 5 colourful kitchens are sure to inspire.

1. This cool blue kitchen's glossy units give the room a summery feel and make it the perfect spot for whipping up some delicious treats. The fridge, freezer, oven and hob have all been built into the kitchen making it ready to move into right away.

2. This modern sky blue kitchen is offset with white worktops and floor tiles that balance the room out. There is plenty of room in this kitchen to get the whole family involved with the cooking

3. The plum units and bold accessories make this kitchen homely, while the silver integrated oven, hob and extractor give the room a modern touch. There is also plenty of room for a table and French doors that lead out into the garden.

4. This deep navy kitchen gives the room a luxurious feel along with its quartz stone work tops. Additional treats include a pop up television, a wine cooler and a coffee machine.

5. The combination of red and black in this kitchen stops the bold colour from being overwhelming. This kitchen is also a fantastic example of how traditional features like the Aga and butler sink can be given a modern makeover.


Hampstead Heath - Ideal location to be on this sunny Friday afternoon

Author: JoeOT - Date: 11th September 2015

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First time buyers in London are nearly £1,000 better off than if they were renting

Author: JoeOT - Date: 3rd September 2015

The Halifax Buying vs. Renting Review found that Londoners who bought property this year pay average monthly costs of £1,338, while the average monthly rental price is £1,419, representing a saving of £81 a month or £973 a year for new homeowners.

This is the biggest gap in the UK as a whole, where the average monthly costs associated with buying a three-bedroom house was £666, £56 lower than the typical rent for the same property type (£722 per month).

The figures show a significant reversal from the situation during the financial crisis in June 2009, when buying cost an average of £1,154 more than renting.

This switch in the relative costs of buying and renting is despite the average price of a first time buyer home increasing 25 per cent in the past six years and can be attributed to the proliferation of cheap mortgages in recent years.

The average mortgage rate has fallen from 4.92 per cent in 2009 to 2.91 per cent this year, while average rents have grown by 23 per cent in the same period.

However, there were nine per cent fewer first time buyers in the first six months of this year compared with the same period in 2014, although the number is still significantly higher than at the height of the economic crisis.

Craig McKinlay, Mortgage Director, Halifax said: “Looking at monthly costs, the combination of lower mortgage rates and declining rental value over the past six years has made it cheaper to buy than to rent.

“While numbers of first-time buyers getting on to the housing ladder in the first six months of both 2014 and 2015 has been over 135,000 – almost double the lows seen in 2009 – the issue of building more new homes in the right places needs to be addressed if we are to see sustainable growth.”


How do you attract a corporate tenant?

Author: JoeOT - Date: 3rd September 2015

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Many landlords consider a corporate tenant to be the Holy Grail. But what are they exactly and how do you get one?

Corporate tenants are tenants who work for a firm which has agreed to cover the costs of the rental accommodation for their employees, usually when members of staff are relocating to London. Rather than renting through the company trading name, increasingly companies are paying employees an "accommodation allowance" and sending them to a reputable estate agent to handle the arrangements themselves. These corporate tenants are particularly favourable to landlords as they offer the security of regular rental payments from a reliable source and a reduced risk of failed rental payments and disputes.

Olivers have set up a dedicated corporate services department, providing the necessary calibre of service required by such tenants. These tenants are often unfamiliar with London and frequently unable to visit properties due to not arriving in the country until such time as their new role begins. Consequently an additional level of service is required making it essential that you use an agent with a dedicated corporate services department.

Additionally, corporate tenants tend to be high quality with regards to appropriate budgets for the London rental market and are able to commit to fixed terms of two to three years, in line with their posting/contract length which is why landlords clamour to attract such tenants.

So, what are these tenants looking for?

They have certain expectations and will look for a well maintained property, in good condition, with modern and neutral décor. Families relocating from overseas will be interested in local & international schools, shops and amenities while preferring professionally managed properties.

Fully managed properties are first choice as the expectations of professional tenants have increased. The reassurance of a dedicated property manager, a 24/7 service and knowing issues will be dealt with quickly and professionally have become essential to the corporate tenant with limited time.

So, how do you attract one of these corporate tenants? It isn't just about being near to a tube station, an international school or how your property looks, landlords need to ensure service is of the highest quality. We find that landlords investing in managed properties are able to attract desirable corporate tenants and more importantly, retain them for future tenancies.

Find out more about our Property Management service, or speak to one of our Corporate Services team contact us now.


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