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Prosecutions against Landlords Escalate

Tuesday, May 15th, 2012

As the demand for private rented accommodation continues to soar, landlords in Yorkshire are being warned to ensure they are operating within the law.

The warning comes after a leading Letting Agency in the county discovered that prosecutions and complaints against private landlords stand at an all time high and in some towns are an incredible five times higher than just 10 years ago. The letting agents Linley & Simpson believe the reason for the increase is partly because of the dramatic increase in the number of homes that are now ensconced in the private rental sector and also because of the increased use of litigation in every area of life in the UK, but say the main reason is that many landlords are not aware of the growing number of regulations they must conform to.

Linley & Simpson Director Will Linley said “Our research shows that the spiralling rise in demand for rental properties over the last decade is matched by an upsurge in complaints and prosecutions. This trend is in part down to the increasingly litigious society in which we live, and in part down to the increasing burden of red tape associated with being a landlord. Most landlords know they should get property insurance and fire certificates, but it is a lot more complex than that. The lesson to be learned from our research is that landlords should employ only an accredited agent – or make sure they are armed with all the necessary knowledge needed to let a property without exposing themselves to legal action and big fines.”

Freedom of information requests show that in Bradford complaints against landlords escalated from just 263 in the year 2000 to over 1,300 in 2010. The most common complaints that lead to legal action against the landlord stem from failing to license HMOs; lack of adherence to health and safety regulations; illegal evictions and failure to manage tenant deposits in a legal fashion.

Tags: Bradford, Legal action, private landlords, Regulations, tenants, Yorkshire
Posted in Law, Property Insurance, Rental Market | No Comments »

Tenants Prefer the Personal Touch

Friday, May 4th, 2012

A survey conducted by a leading online letting agency will provide food for thought for many property investors with an interest in landlord insurance.

The survey suggests private landlords should conduct preliminary viewings of their properties with tenants themselves rather than leave it to agents. Online letting experts Upad questioned almost 400 tenants in private accommodation across the UK and found the assumption that tenants preferred to view their potential new home with a professional agent totally wrong. The survey revealed only 15% actively preferred an agent to a landlord while 53% stated a preference for the landlord.

It has long been thought that agents handled viewings better than landlords but the survey does suggest landlords looking for full occupancy in their portfolio may be better off finding time to conduct viewings personally.

James Davis, speaking for Upad, said “From our research, it appears that honesty and obtaining direct answers is of the utmost importance to potential tenants so it makes perfect sense for landlords to self-manage and hold viewings themselves. Landlords who are not doing this are simply missing out. The data speaks for itself and it’s important that UK landlords listen to what tenants want. By cutting out the middle man and dealing directly with tenants, landlords have full control, enabling them to build trust and secure long-lasting relationships with their tenants.”

Feedback from a number of tenants certainly suggests this to be the case with one saying: “Agents are probably more objective about the property they are showing but it is the landlord’s property and therefore he or she is more likely to know the finer details about the house rather than the agent who is simply there to do a job.” Another asserted: “I don’t believe agents are always truthful and because agents only care about the money I believe landlords are better – they actually care about keeping good tenants.”

Tags: House Viewings, Letting agents, private landlords, tenants, Upad
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Minister Believes Private Sector Will Benefit from More Regulation

Tuesday, May 1st, 2012

Landlords and tenants alike will welcome the news that the Government is considering drawing up an official charter of requirements that will govern the private rented housing sector for the years to come.

Grant Shapps, the communities minister, has long championed the private housing sector and believes the expected growth of private accommodation will benefit from a more robust regulatory scheme. It will certainly suit professional landlords who are well accustomed to the paperwork and regulations that are inherent with providing a competent service to tenants. However, the so called accidental landlords who are renting their properties out because they can’t sell them or afford to live in them may find it more difficult to comply. As well as demanding appropriate property insurance the new charter may require more exacting standards, and it may certainly compromise the home owner who lets part of his home out to a lodger.

In Parliament earlier this week MP for Torbay, Adrian Saunders, asked Mr Shapps: “One way of reducing the regulatory burden on landlords but also improving the safety and security for tenants, would be to provide a central, standardised document, containing all landlord and tenant responsibilities from fire safety to anti-social behaviour. The planning system has benefited from a process of simplification. Can you do likewise with the private rented housing sector?”

Mr Shapps answered in the affirmative saying he believed such a scheme would benefit both sides of a private rental agreement and that he would look into the possibilities of making such a scheme reality. He said: “It sounds like it might be something comparative to a template lease and is something worth further consideration.”

Tags: government, Landlord Responsibility, Private Rented Sector, tenancy agreement, Tenant Responsibility
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Landlord Organisation Forecasts Housing Crisis for Benefit Claimants

Tuesday, April 24th, 2012

A report from a major landlord association shows that tenants on benefits are struggling to find decent accommodation as Government cuts in Housing Allowance take effect.

The report issued by the National Landlords Association (NLA) shows that thousands of landlords are becoming ever more reluctant to let their properties to benefit claimants and are turning to tenants who are not on benefits to ensure they keep their business healthy. The survey of members showed that over 50% of the respondents said they no longer consider tenants on benefits because the cut in Local Housing Allowance meant that few could afford to pay the rent required by landlords and they were not prepared to be pressured by local authorities to bring their rents down. The outlook for benefit claiming under 35s is even worse. With the Government now only paying benefits based on the cost of renting a room in a house very few private landlords will now even think of letting a home to an unemployed young person. Although landlords can purchase cover for non payment of rent via their property insurance many now see benefit claimants as just too risky.

Chairman of the NLA, David Salusbury, said “It’s concerning that so many landlords appear to be planning to withdraw from the LHA market within just three years, as they can no longer afford to let their properties to tenants at the reduced benefit rate. In view of the pressures on housing, the private-rented sector will inevitably play an increasingly important role in providing housing to LHA tenants, particularly those aged under 35, who aren’t able to access other housing. It is vital that local authorities work with landlords to provide the support services needed to help this demographic, as many are forced to move into shared accommodation.”

Tags: housing benefit, Local Housing Allowance, National Landlord Association, Rent Prices, tenants
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Has the Buy to Let Boom Finished?

Thursday, April 5th, 2012

As mortgages rise and rental income drops, a report from a high profile online letting agency suggests landlords may have seen the peak of the boom that has enveloped the sector for the last couple of years.

According to LSL Property Services the average monthly rent dropped to £707 in February. Still way above the average of two years ago but significantly lower than the £719 being achieved at the back end of 2011. At the same time as income has dropped landlords are finding their mortgage payments going up for the first time in ages. Santander and the Leeds Building Society, both big players in the buy-to-let market, have upped the rates on mortgages targeted by landlords, and other lenders are expected to follow.

The drop in rental achievement accompanied with higher loan repayments will certainly make some landlords think twice before they go ahead and buy more properties but insurance companies who specialise in landlord insurance say they are still experiencing high demand for their products.

David Newnes, speaking on behalf of LSL, said it is too early to say the boom is over just yet explaining: “There are already indications that mortgage lending is falling back, and that mortgage rates are beginning to climb, which will limit the number of prospective homebuyers leaving the rental sector. Given the growing number of households, the pressure will remain on the private rented sector.”

Certainly government experts expect house prices to fall slightly this coming year, the big question may be who will have the easiest access to funds, landlords or first time buyers.

Tags: buy to let loans, landlords, Rent income, rental demand
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Olympic Hopes Looking Tarnished as Landlords Ask for Too Much

Tuesday, April 3rd, 2012

Property investors expecting to make golden profits during the 2012 London Olympics are stumbling at the final hurdle due to greed according to several letting agencies in the capital.

When the announcement came that London was to be the venue for the 2012 Olympics, private landlords anticipated making a small fortune over the summer months, but it seems that many have set their aims too high and are pricing themselves out of the market. With only a few months to go now before the Olympic flame is lit in the capital many investors are seeing their hopes go out like a damp squib.

Landlords in the area have found themselves in competition with local homeowners who have seen the chance to make money by renting their own homes out just for the duration of the games, and between them they have swamped the market. With many pricing their homes at over ten times the going rate for a month’s rent in the capital prospective visitors are ignoring the opportunities.

Gary Clark, Director of London 2012, said “First of all private home owners should remember they will need specialised property insurance if they rent their homes out. The guide is that you can expect to get around three, four times normal rental rates. People are trying for seven, eight times that amount. If you are going to ask £3,000 for a small two-bed which is not great in terms of décor, you’re a bit out of your depth. I keep saying: Look, there’s money to be made here, but you’re not going to retire on a week’s rental.” Some landlords in Stratford have been offering properties at 20 times their normal rental value, the Estates Gazette reported last week.

A search on Gumtree will find many homes in the Stratford area advertised for £4,000 a week during the Olympic period but there are not many people around who can say they have already rented their homes for anything like such amounts, and unless there is a last minute rush many prospective landlords will have missed out by being too greedy.

Tags: landlords, London Olympics, Rent Prices, Rental Properties
Posted in Property Insurance, Rental Market, tenants | No Comments »

Barratt Offer Unique Deal to Southampton Landlords

Friday, February 24th, 2012

A developer has offered any potential landlord the chance to own a new Southampton home which comes with a rental income that is guaranteed for six months. Barratt are offering landlords the chance to own a two-bedroom apartment for £155,000 with a promise that they will then immediately rent it back from the landlord for £650 per month.

Barratt feel investors are starting to return to the local property market and believe the area has not seen this level of demand from buyers outside of London since the credit crunch of 2007. Landlords will appreciate the scheme as it will give them time to source a suitable tenant and affordable landlord insurance. The landlord will also benefit from the Barratt guarantee that will see the developer keep the property in pristine condition as they are the only major house builder who offers a five year internal fixtures and fittings guarantee.

Rents in Hampshire are rising rapidly and are expected to carry on increasing in the coming years. This means that rental homes are increasingly in demand from landlords who take the view that the direction of prices means they should expect to be sitting on a profit in four or five years’ time. Having a minimum six-month agreement with Barratt means they can get off to a good start with the apartment.

Barratt senior sales manager, Zak Long, said “At the moment they are being used as sales offices. This represents a fantastic opportunity for someone to invest and then we will rent it back for more than they are likely to receive if they rent it privately. The apartment will continue to be used as a sales office until all of the properties are sold at Hollybrook Lodge. The lucky buyer will receive a guaranteed income on their new investment and we believe it’s an offer that cannot be matched.”

Tags: Hampshire, landlord insurance, property, Rental Market, Southampton
Posted in Property Market, Rental Market, landlord insurance | No Comments »

Poor to be hit hardest by size criteria scheme

Friday, December 16th, 2011

Poor families living in social housing that is protected by landlord insurance look set to be penalised for staying in a property that the Government deems too large for their needs. The Coalition had previously claimed that the families would lose an average of £620 but now that is set to rise to £1400 a year.

The new “size criteria” scheme has come under attack by the NHF (National Housing Federation) who are worried for the huge number of families who are going to struggle with the cuts. Based on cuts of up to 25% of a family’s housing benefit that the Coalition plan to introduce in 2013, a household who are classed to be under occupying a three-bedroom home in the UK will face losing up to £22 a week. The household would then be forced to choose between finding the money from elsewhere in their benefit budget or moving out of their home. The problem will be even worse in London where a family under occupying a three-bedroom property would have their housing benefit docked by £1385 a year, which will be the biggest penalty of any region throughout Britain. Separated parents will also be penalised for keeping a bedroom for when their children visit.

David Orr, chief executive of the Federation, said “We have been deeply concerned about this bedroom tax for some time but these new figures show the damage will be far worse than previously thought. Thousands of hard-up families face penalties of up to £1400 a year simply because the Government have deemed their homes are suddenly too big for their needs. This will have disastrous implications for huge numbers of people already struggling to make ends meet in the tough economic climate, including foster carers, grandparents, disabled people and smaller families.”

The NHF is calling on the Coalition to make the rules more flexible and allow one additional bedroom above that permitted by the criteria, saying the present rules could damage the fabric of home life for many disadvantaged families.

Tags: landlord insurance, national housing federation, NHF, property insurance, Size criteria scheme
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New housing may bring new problems

Friday, November 25th, 2011

Nantwich is to get twenty one new homes despite serious concerns being raised regarding flooding. The area does need more housing but locals believe it will cause problems for residents who have suffered with flooding in recent years.

East Cheshire Council’s planning committee has approved the developer’s (Arley Homes) blueprints for the new estate. The plans include five-bed, four-bed, three-bed and two-bed properties and there will also be six affordable homes for local residents. Landlords who already have a portfolio of properties have also shown an interest in adding another home and protecting it with property insurance.

Alfred Palin has lived close to the site of the new development for twenty five years and has warned councillors that new housing will make the existing flooding problem much worse. He is just one of the thirty residents to oppose the plans with others having concerns about overdevelopment and increased traffic congestion.

Mr Palin said: “My home has flooded twice in the last two years and I believe this is down to the five developments that have taken place in the surrounding area. My wife and I are both pensioners, I’m in poor health and I could do without the worry of flooding for a third time.”

Mr Palin’s view is completely different to the drainage strategy report that found that the development site is in an area of low risk on the flood map. The council have asked for a guarantee that residents will not experience any flooding after the homes have been built and while the Environment Agency says the site is not prone to flooding, it does not say anything about the peripheral impact. United Utilities and the Environment Agency will continue to monitor the area and details of a viable drainage system will be included in the plans. Arley Homes have also promised to pay at least £15,000 towards a new children’s play area.

Tags: landlord insurance, New housing, property insurance
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More of the same for booming landlord sector

Thursday, November 17th, 2011

The prospects for property investors with an interest in landlord insurance continue to improve according to the latest report to emanate from the housing industry.

The Halifax Bank, the UK’s largest mortgage provider, says that house prices have risen by just over 1% in the last 12 months to an average value of £163,311. The increase may not seem much, but for private landlords who have seen their rental income soar over this period, knowing that their investment is also increasing in value is the icing on the cake.

At the moment private residential landlords are having things very much their own way, young couples and families are still finding it very tough to find the huge deposits required by the banks leaving property investors the choice of the field, at a price they can usually dictate. As demand grows for property the Halifax report suggests that over four million homes in the UK are now in the private rental sector.

It is not just London where landlords can pull in big rental profits, according to industry reports areas like the North West, traditionally a place of meagre rental yields, are experiencing rental rate rises of around 20%. This is reflected almost everywhere in the UK and led to Ray Withers, an expert in property investment, to say “With demand outstripping supply in the Buy-to-Let market, those with enough capital to invest in the growing Buy-to-Let arena are benefiting from some of the highest monthly returns on record.

“Big rental returns from UK property have alerted overseas investors to the UK, attracted not only to a solid market from which to reap weighty returns, but also a safe and reliable place to invest.”

Tags: Buy to let market, landlord insurance, Landlord sector
Posted in Advice, Property Market, Rental Market, landlord insurance | No Comments »